When it comes to company culture, few events have a bigger impact than a merger or acquisition. Combining companies means bringing together different cultures under one roof, requiring a delicate balance between preserving what’s unique about each company, while uniting under one, combined culture. Even more challenging? Bringing together a company that has an Employee Stock Ownership Plan (ESOP) and a company that does not.Combining companies means bringing together different cultures under one roof, requiring a delicate balance between preserving what’s unique about each company, while uniting under one, combined culture.Click To Tweet
For employee-owned organizations, ownership is an important part of the company culture. But how do you maintain that ownership mindset when going through a merger or acquisition? My colleague Sarah Kalhorn and I recently spoke at NCEO’s Employee Ownership Conference, where we shared learnings from our own company’s acquisition experience. Here are our top takeaways:
- Answer these three questions. Employees want to know three things: what’s happening, why is it happening, and what does it mean for me? Ownership falls under the third question – it’s important to make sure employees on both sides understand how this merger or acquisition adds values to the company and, therefore, the ESOP. Make sure you are using consistent language in communications to all employees.
- Educate employees about the ESOP. When CRT/tanaka was acquired by Padilla in 2013, I was one of many CRT/tanaka employees who had no idea what an ESOP even was. It’s important to start with the basics. At Padilla, every owner gets an ESOP Owners’ Manual, which provides company history, FAQs, expectations and more, all delivered in a binder with a convenient place to store annual statements.
- Celebrate! On our first day as a combined company, we brought each office together for a celebratory champagne toast via video conference, which also allowed us to start putting faces to names. During this celebration, we showed a video that unveiled our new, overall brand and featured interviews with employees from all offices. The celebration created a shared sense of unity, pride and excitement for the future.
- Create a shared vision, purpose and values. In addition to the combined brand, we also rolled out a shared vision, purpose and values. It’s especially important to include employees in the creation of the values – employees will help activate what they help create. Make sure the values also reflect the ownership mentality that’s a vital part of being an ESOP.
- Integrate the ownership mentality into everything. Once you’ve rolled out your vision, purpose and values, they need to be integrated into everything, from internal communications to awards and recognition and more. For example, at Padilla, we share financial updates at every staff meeting because we feel it’s important that our employee-owners have a transparent view of how the company is doing financially. We also revamped our annual recognition program to align with our new values.
- Respect the different cultures. Each company – and in some cases, each office – has its own unique culture and traditions. Find common ground, but also allow for some of that uniqueness to shine through. At Padilla, we found that both legacy companies felt strongly about community service; so, twice a year, employees in each office participate in a volunteer day. The activities and organizations differ from office to office, but we’re united by our commitment to giving back to the community.
- Create an ESOP Committee. Members of this committee, which should consist of employees from all different offices and business areas, serve as ambassadors for the ESOP. Their job is to help educate new employees about the ESOP and keep the ownership mentality top of mind for all employees. At Padilla, our ESOP committee hosts Lunch & Learns, posts ESOP information on our intranet, manages our recognition program, plans two company-wide ESOP celebrations each year, and more.
When you’re going through a merger or acquisition, it’s easy to get wrapped up in the housekeeping items and overlook the employee engagement piece. But companies who stay focused on maintaining a positive workplace culture will come out of the transition stronger than ever.