Man in a black hat
For success after an acquisition, the CEO should reset the company culture. PHOTO: Clem Onojeghuo

2015 was a record year for mergers and acquisitions.

Dell acquired EMC, Vista Equity Partners acquired Marketo and a host of other mergers and acquisitions were closed, totaling into the billions.

This all means a great deal of restructuring, repositioning and in some cases, even rebranding, is about to take place. And the weight of these decisions fall ultimately on the CEO.

The CEO has to carefully consider the shape of the newly formed company, including the kind of culture the company will live by.

Culture Sets the Tone

Research shows building a strong company culture is no small venture. It sets the tone for the entire organization, from how the C-suite makes business decisions to how employees interact with customers and each other.

It also has a direct impact on employee satisfaction  and growth, which can in turn affect the quality of a business’s products and services as well as its ability to innovate. And make no mistake, this is not referring to the kind of “work perk” culture that has been popularized by Silicon Valley tech startups.

Ping pong tables and catered lunches are great for talent acquisition, but they do not inform the day to day behaviors and attitudes that make a successful company. And letting the culture conversation end there is not only be a mistake but a wasted opportunity on the part of the CEO during this crucial period of change.

For success post shakeup, the CEO should take the time to reset the company culture. Here's how to do it.

Identifying a Weak Culture

Running a company with a weak or fragmented culture can have dire consequences in the long term, including interdepartmental confusion and friction between executives.

It is normal to expect at least a bit of fragmentation after a merger or acquisition as two completely separate businesses are being brought together under one entity. But it is critical to look out for it and address it promptly.

One of the biggest clues that the CEO needs to hit the pause button and reassess the new company’s culture is employee apathy. When employees have stopped caring about their professional development, their projects or their customer relationships either out of displeasure with the merger or belief that they may soon be let go, they have stopped trying.

They may be punching in to work every day, but without a strong culture to keep them on the right path they may start to wander or get lost — causing the business as a whole to suffer.

People innately desire purpose. Why did they come in to work today? How is what they are doing making a difference? Every employee and executive should be able to answer these questions. If not, it’s a sure sign that something is broken.

(Re)Defining the Culture

Culture is a business’s North Star. It should be intentional, well thought out, easy for everyone in the organization to understand and, ideally, written down.

After a merger or acquisition the C-Suite will likely revisit the company’s mission statement, which lays out its core values and purpose. Similarly, the company’s culture should also be reevaluated.

To make a company culture work, it should be defined in general enough terms that it can be applied to a multitude of business situations.

Often it will take shape as a set of principles, for example, a culture of  “putting customers first” or “continuous learning” or “humility.” These principles provide a compass for employees to exercise sound judgement that is consistent with the values of the business.  

It is also important that these principals be able to stand the test of time and grow with an organization as it continues to get bigger perhaps with further acquisitions down the line.

Living the Culture

After a CEO has put so much time and effort into reshaping every aspect of the company, including culture, deciding not to truly live by it sends a signal to employees that the C-suite may not be invested in the company.

As such it is important for not only the CEO, but the entire executive team to exemplify the way it expects employees to conduct themselves at work and with customers.

Whether by being transparent about a challenging business decision or boldly taking risks with products, when employees see their leaders living the company’s values, they will do the same.

Recognizing behaviors that exemplify the culture and calling out those that detract in day to day interactions, performance reviews and reward systems helps reinforce that the culture is not just words on a website but behaviors that are actively recognized, promoted and rewarded.

While there is no doubt that mergers and acquisitions can be both exciting and unsettling for everyone involved, they also create great opportunities to refocus the company’s culture — arguably the single most important element to longterm success.