9 ways your digital workplace can support a seamless merger or acquisition
Mergers and acquisitions are an excellent opportunity for growth and innovation, offering the chance to take businesses to the next level. Growth comes with no guarantee though; KPMG research found 83% of merger deals fail. In times of change, an intranet can become a critical tool for restoring order and providing clarity. In this article we take an in-depth look at how companies have used digital workplaces to successfully navigate mergers and how your business can do the same.
Orchestrating seamless mergers and acquisitions with a digital workplace
Mergers and acquisitions (M&As) can be the move that elevates a successful company to one that dominates its market, but they are by no means straightforward. Organizational change is never simple, especially at this level. Orchestrating a successful transition between two companies is difficult, but there are steps that you can take to ensure the process is as easy to manage and execute as possible. Digital workplace technology is increasingly being looked to to support companies undergoing major merger scenarios, since it lends itself well to centralizing data, communications, tools and knowledge.
During M&As processes are scrutinized, strategies reviewed, and hierarchies restructured in the name of business growth, all of which takes considerable planning, time and effort. Leadership will understandably focus more on the financial components of a deal, but considerations must be made for integration, knowledge transfer and the cultural impact on both companies.
While every deal is different and the path to success will always be unique, this article will look at some of the major challenges involved in M&As, key pieces of advice for navigating the minefield of M&A activities and features of a digital workplace that can make any merger or acquisition as smooth as possible.
The challenges of mergers and acquisitions
For employees there is possibly no greater time of uncertainty than during a merger or acquisition. The mere mention of M&As puts staff on high alert; 1 in 5 employees voluntarily resign following merger announcements. This exodus can threaten the efficacy of a deal, so proactively addressing these issues is key to successful M&As. Some of the challenges facing organizations during M&As include:
With focus zeroed in on the future, it is all too easy not to give the proper care and attention to the present. The uncertainty of mergers and acquisitions breeds unrest, speculation, confusion and increased staff turnover. Considering the turmoil M&As put employees through is key to keeping morale stable, but when so much else is changing this can often be ignored.
#2. Culture clash
Merging two cultures requires a nuanced approach. Without a unified company culture, tensions can lead to an “us vs. them” mentality between merging firms. This dynamic can produce animosity among staff and create business silos within your organization, where employees willfully withhold valuable work-related information.
#3. Loss of tools and knowledge
Merger rationale is predicated on financial analysis, but knowledge transfer and integration planning are an equally important aspect of successful M&As. Both entities will bring with them a catalog of tools, processes and even duplicate intranets that require integrating for operations to continue without disruption. Additionally, if 20% of staff elect to leave a company following merger announcements, they threaten to take a significant amount of knowledge and expertise with them, so integration requires a rapid rate of knowledge transfer.
One of the greatest challenges facing any company during M&As is high employee turnover. An influx of new–often globally dispersed–employees is met with a mass departure of existing ones. Following an acquisition the average acquired firm loses 40% of its managers during the first 24 months.
An AON Hewett study found that after M&As organizations can expect a 23% increase in “actively disengaged employees” and for the number of engaged employees to be halved. Only after 3 years will engagement return to pre-merger levels.
#6. Merger syndrome
Upcoming changes must be communicated to employees, as without a clear idea of the future employees are at risk of “Merger Syndrome.” The best way to explain “Merger Syndrome” is to imagine the stress employees are put through when, whilst already worried about job security, their access to an app they use every day was suddenly denied without explanation.
Despite these challenges employees should be excited about new opportunities on the horizon. Throughout times of change, an intranet can be the constant that restores order to even the most chaotic of organizations. Below we will look at some of the key aspects of M&As that digital workplaces are best equipped to assist with.
The role of a digital workplace in M&As
The key to a successful deal is to support organizational change, minimize impact on staff and operations and make the transitional period of M&As as smooth as possible. But how can you know in advance which steps will help and which may cause further disruption for employees? This is where a robust and adaptable intranet platform can be a powerful tool for seamlessly navigating M&As.
How a digital workplace can support your merger or acquisition
#1. Two-way communication
Following a merger announcement you can expect a mixed emotional reaction from your workforce; somewhere between apprehension and excitement. Without a centralized channel for two-way communication between employees and management you can’t expect staff to stay engaged with the cultural shift of your organization.
Allowing employees to voice concerns without fear of repercussion is also essential. Monitored forums and social channels that let employees openly ask questions help alleviate anxieties and preserve engagement. Additionally, staff communities on social networks can support each other through the transition, contribute insight and bring the added value of their expertise to M&A activities.
#2. Silence the rumors
During M&As rumors can run rampant. With so much speculation employees can understandably become confused as to what information should be trusted. Your organization must provide a reliable stream of information for staff to effectively stop the spread of misinformation and prevent disengagement.
Intranet software is the perfect location for this unified source of news, centralizing employee communications, news and updates into one easily accessible hub. When coupled with a broadcast center and push notifications an intranet can be a vital source of information for employees.
#3. Access to business-critical information
Providing access to vital resources and tools is crucial to a smooth transition. When two entities merge, or one acquires another, the messy business of pooling together all the relevant resources into one shared information architecture begins. This archive of combined knowledge can be uploaded to an intranet where it can be accessed with advanced search features.
Additionally, during M&As your organizational hierarchy will likely have drastically changed, so organizational charts housed on an intranet can be extremely helpful. Entire platforms can be instantly translated to accommodate global workforces with AI powered multilingual intranets. These features can also be easily applied to a mobile-friendly platform that desk-based and remote workers can access from anywhere in the world.
#4. Brand proliferation
During times of organizational change alleviating anxieties and harnessing the emotional commitment of employees is crucial. This is difficult to do when so much is in flux, but establishing new, consistent intranet branding helps employees engage with your re-envisioned brand identity.
Redesigning an intranet under a single vision can be a pivotal step in bringing your new unified brand to life, providing employees with the assurance of a singular user experience and the clarity of a corporate identity they can rally behind.
#5. Consolidate culture
A single intranet platform is perfectly suited for skillfully integrating cultures without disregarding existing brand personalities. It's even possible to bring together different languages within the same platform.
Your organization can leverage an intranet platform as an enabler of cultural engagement, eliminating ‘culture clash’ and mixed messaging with a unified digital experience.
#6. Simplify migration
The key to successful migration during M&As is integration. A robust framework with automated migration, like Unily Connect, allows legacy tools and applications to be seamlessly integrated into your new platform.
During integration, you can utilize the experience of staff with knowledge of the intricacies of each organization to completely circumnavigate large scale migration issues and ensure that your new intranet encompasses all the relevant content to meet the needs of every employee.
#7. Rapid reaction time
Although M&As are often a lengthy process, the swift reaction of your organization is paramount to maintain momentum and avoid stagnation. Things will change at a constant pace, so your intranet platform needs to keep up.
Intranet platforms are primed to streamline processes and increase the efficiency of Business Units. By bringing everything together onto one platform you can rely on a digital workplace to rapidly increase your organization’s reaction time.
#8. Flexibility for the future
A flexible digital workplace platform evolves to meet the demands of M&A activities. Dynamic user systems accommodate new additions to the workforce and adjust for those that leave, whilst directories and enterprise social features help employees navigate the shifting landscape of M&As.
#9. Business intelligence
Intranets provide your organization with insight and data to track your workforce, helping to build engagement profiles across departments and locations. These profiles allow organizations to react and adjust the approach to M&A activities in real-time to ensure optimal outcomes.
dormakaba: Navigating a global merger with a digital experience platform
In late 2015, Dorma and Kaba merged to become one entity, becoming dormakaba, one of the top three global security and access solution providers. The newly formed dormakaba faced a difficult transition involving 16,000 employees spread across over 50 countries.
With a long tradition of innovation instilled in both companies’ cultures, dormakaba required a platform that could automate migration and bring the infrastructure from their legacy system to their new platform. This included features such as active directory syncing and single sign-on setup. All of this needed to be delivered within a 60-day period to ensure rapid reaction times as they moved forward from the merger.
Unily’s digital experience platform was leveraged to provide remote access and a native mobile app to their newly expanded global workforce and was built to harness the power of AI powered one-click translation, a new feature at the time, custom built for dormakaba.
Additional features, such as a new social intranet named “Access to Innovation”, a custom CMS (content management system), bespoke workspace subsections for departments and a comprehensive success program were all built into the platform with room to evolve as the newly merged company continued to grow and develop.
"There are definitely amazing things on the horizon for this solution and we are excited to be a part of this journey and to see our intranet solution grow with it."
dormakaba — Nielsen Norman Best Intranet 2016
As winners of Nielsen Norman's Best Intranet 2016, dormakaba's social intranet solution has been recognized as a leading digital workplace platform. Find out how they launched an award-winning intranet to 16,000 employees in just 6 weeks by downloading our free case study.
Looking for help with your own merger or acquisition?
To find out how Unily can support your upcoming merger or acquisition, get a free demo with one of our M&A experts today!