Last year saw 412 global adtech and martech deals and the first half of 2017 has seen record levels of merger and acquisition deals. As the tech industry moves towards consolidation and giants like Apple and Verizon put their cash to work, major deals like Oracle-Moat, Amazon’s acquisition of upscale grocer Whole Foods, and Adobe’s purchase of video demand-side platform TubeMogul will continue to be the norm.
However, for all the recommended M&A strategies that aim to improve performance or fill a gap in a product portfolio, there is little coverage on one of the most important components of a successful acquisition: blending company cultures.
The merging of processes, personalities, and projects can easily go awry if attention is not paid to even the most minute details. Contributors to the Harvard Business Review estimate the failure of mergers and acquisitions to be somewhere between 70% and 90%. From my experience in leading companies through acquisitions, the acquiring company has a responsibility to ensure employees from both sides feel a sincere sense of inclusion and engagement in the acquisition.
So, what can companies do to ensure the smoothest possible process of cultural integration during a merger?
Introduce yourselves – to each other and to the market
It seems obvious, but start with introductions. It is important to find ways for employees to meet each other and hear executives openly discuss what the acquisition means for the future of the business. Whether achieved through smaller meetings and meals or a larger event, they provide opportunities for employees of both companies to come together and lean into one another’s cultures. Alaska Airlines did this well, when it, upon announcing its merger with Virgin America, planned "Momentum," a day-long team-building experience for all employees across both companies.
In many cases, acquisitions may also create significant uncertainty for employees on both sides of the transaction. For the new employees, consider utilising a buddy system, matching them with employees who can show them the ropes.
Regardless of the forum and the message, it is important that acquired and existing employees hear from the acquiring company’s leadership team as soon as possible after the acquisition is announced publicly.
Recognise that learning goes both ways
The onboarding process is a vital aspect of the acquisition cycle when acquired employees meet their new colleagues and get a sense of their roles within the new ecosystem. A careful balance of immersion and patience should follow, especially for companies with complicated product infrastructure, like advertising technology. On our part, we created AppNexus University, a week of forums and classes where both sets of employees teach each other about their products and team culture to gain equivalent knowledge of products and processes.
The devil is in the details
Supporting an acquisition is a long game, stretching beyond the initial weeks and months. Acquiring companies must be aware of the structural details of the employee life cycle: employment agreements, promotion schedules, and compensation can all be affected. Even if it seems easier to standardise these processes immediately, companies must carefully consider which aspects of the review cycle to honour, in order to prevent employees feeling overlooked. This can mean bringing in HR M&A experts like Thomas Bouchez to conduct focus group sessions with a cross-section of employees, in order to identify key areas of their concern during the transition.
Additionally, if the acquired company turns into a satellite office, it’s worth putting a human resources manager on-site quickly, so new employees have a representative voice in the changeover process. Equally important is making sure that these offices have the same resources – from technology to office décor to snacks – as your existing ones.
Bring people together
Physical open spaces should be used to bring people together to meet and mingle. Bonding over food and drink helps break down monotonous work routines and foster a sense of community. These opportunities are especially important in advertising technology, where technical or engineering teams are not always as visible. To this end, we started a tradition of family lunch on Fridays, where employees stop work and all come together to eat lunch in our cafes. Other companies like Drumroll have weekly "fuel lunches" catered for their 50 employees, while Leo Burnett Chicago sets up a different pop-up restaurant as its Star Bar every day, giving staff the chance to sample different restaurants without leaving the office.
Lastly, never underestimate the power of swag. Offering company clothing and accessories to new employees is one of the easiest ways to make them feel that they belong. At AppNexus, we give our acquired employees a branded book bag just as we do our new employees.
Even though acquisitions take time and effort, it really is the little things that can make all the difference in shaping future success.
Nithya Das, is chief legal and people officer at AppNexus