Cultural integration – Do you measure/track the employee satisfaction?

This topic contains 18 replies, has 19 voices, and was last updated by  Millie Manning 4 days, 19 hours ago.

Viewing 15 posts - 1 through 15 (of 19 total)
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  • #118831

    Matthias Arnet
    Participant

    What are your experiences with the post-merger employee satisfaction and the cultural integration? Do you try to measure it and track how it develops over time?

    #119058

    Best practice is to do exactly that. Unfortunately, too many do not or are ineffective at it. The work of integration tends to revolve around the transactional and not the tactical/strategic when it comes to human capital and culture integration. In other words, the actions of integrating benefit programs, compensation programs, organizational reporting structures, and resource allocation. This is not to say that no attention is paid to cultural integration, just that too little tends to be. There are many studies over the last 15+ years by Mercer, Deloitte, Towers Watson, and many other consulting firms that reflect the leading causes of transaction failure within the 1 – 3 year window post-transaction close are largely due to human capital & cultural issues. The root cause of this is unsatisfactory human capital due diligence pre-close. Talent was not appropriately assessed, the wrong talent retained or released, ineffective retention strategies implemented, the social/emotional well being of the employees between all merging entities ineffectively (if at all) attended to, all of which led to loss of key talent post-integration and with it the institutional knowledge and intellectual property that fueled the original transaction thesis. What talent remains tend to be less engaged, less effective, or worse, actively resistant. So much attention is paid to the very tangible financials – does the transaction make financial sense, will there be increased shareholder value in some way – and not enough attention paid to the intangible human and cultural components of the merger.

    As a good example from the recent past, take the merger of Newell Rubbermaid and Jarden Corporation. 2 very different business models – one a centralized, process driven, operating model company and the other a decentralized, opportunistic, holding company model, very much the essence of Private Equity loosely connected. While Newell Rubbermaid had been, 7 years prior, where Jarden was at the time of the merger discussions in 2015, they either had a very different experience through their transition or forgot all the lessons they learned. When Jarden (actually the larger volume company at the time) was acquired by Newell Rubbermaid, not enough attention was paid to the cultural integration. It was more “my way or the highway” and less a methodical process of gaining buy-in. Too much was planned out and implemented post-integration that should have been examined more closely pre-transaction execution. The human capital due-diligence stage (if it was ever really performed ahead of time) was rushed and the result was disgruntlement by Legacy Jarden leadership that led to lawsuits and eventually spinoff of most of the Legacy Jarden divisions just 2 years later – Rawlings Sporting Goods, Process Solutions (LIFOAM, Jarden Zinc, Jarden Process Solutions, etc.), Waddington Group, USPC, Pure Fishing, and others. The company went from a high of $16B annual sales post-merger to under $9B just 2 years later when spinning off those brands. Leadership changed, share price stagnated and then fell… it was a mess.

    The importance of effective Human Capital Due Diligence cannot be overstated. This includes examination of all human resource functions, culture elements, and the development of effective integration strategies for human resources that addresses the intangible, social/emotional well being of the people, and strategically targets the appropriate key talent to retain or release. Prompt execution of the human capital plan should be aligned with the integrated entities new strategic plan and followed with frequent and persistent measurements of the engagement, tracking of retention, and adjustments made to keep the ship right-sized, level-set, and propelling growth.

    #119191

    NILTON YONEZAVA
    Participant

    In the company that I work for, we have KPIs ranging from engagement (Trust Index from GPTW, Pulse Surveys, employees NPS). Still, also we track the attrition considering the demographic of the acquired company.

    #121325

    Hanen Dada
    Participant

    For a full integration, i believe measuring employees’ satisfaction is key for the overall success of the deal with the intention to improve satisfaction over time. unfortunately management seems to be focusing on other aspect of the integration and forgetting the human capital aspect in the integration.

    #121375

    Meshal Alshammari
    Participant

    this is a very interesting metric to measure that is usually overlooked. in our previous M&A deals, we have conducted a similar study but not entirely focused on the cultural integration side. I believe we should defiantly monitor such peramteters

    #121738


    Participant

    Employee satisfaction is crucial as this will determine their engagement with customers and quality of work produced. Employee surveys to understand how they perceive the company and how to better improve the organisation would serve as “free” consultancy advice from people on the ground, who is closest person to understand what they are doing, the impediments in the roles and how to remove inefficiencies in the workflow.

    Last but not least, unhappy employees may not voice their unhappiness out, they may instead sabotage work efforts in subtle manners to “prove” that M&A should not have been done in the first place.

    #121750

    Elizabeth Perlak
    Participant

    Its a best practice for organizations to track/measure employee engagement at any time. Ideally if you already have a regular practice in this area you can implement supplemental “pulse” surveys to take a temperature as you progress through integration that can help provide information about the specific moves you are making. I think its important to remember a couple things though in terms of company culture – you want to make sure the measurements and messages around what the enduring company culture is are clear and widely communicated. Everyone should understand and be engaged in building that culture. While satisfaction is part of what you are looking for, its also important to accept, particularly if there is a shift in culture, that some people will opt out. Be careful to distinguish the negative comments into those where you have missed the mark but agree with the direction and those who are not happy with the entire direction. Rather than diluting the culture you are building by catering to those who are dissatisfied with the direction, help them evaluate if they are onboard with where you are going. Its extremely important to understand where you are trying to go and not get pulled in directions by the loudest voices complaining.

    #121790


    Participant

    Yes! We developed short, simple survey’s during the integration timeframe and also follow ups after key change events. Pulse surveys are part of our culture broadly, so it’s part of our operational nature. Also, depending on the workstream (ex: Technology), there may be other surveys. We’ve found them to be informative and we’ve learned lessons that have informed our approaches in future integrations.

    #121796

    FAHAD ALQAHTANI
    Participant

    I believe measuring / tracking employee satisfaction post merger is important as it can bring values to the new company. It is not possible to bring to cultures in one environment and expect harmony from day 1. Genuine employee satisfaction can help and in some cases can drive cost reduction and revenue generation as well as enhance the company culture and environment.

    #122159

    Joaquin Blanco Diez
    Participant

    I have been involved in a case whereby one of the companies had a quite solid employee engagement process and metrics. It was directly incorporated into the target and at least for the acquirer it allowed very easily at least to assess the impact compared to pre-deal figures. Not seem yet a specific a process to be set up just as a consequence of the deal.

    #122216

    Mohammad Alageeli
    Participant

    I think this is an important activity that must be consider to ensure that the integration process is moving towards the desired results.

    #122324

    Evgeny Gorbunov
    Participant

    There is a confidential score sheets sent internally to employees to assess the employees satisfaction. Typically, employees are reluctant to answer honestly due to the fear of disclosure the personal data.

    #122643

    yes absolutely, most employees satisfaction tools allow to track at a detailed level for teams above a certain size, per geography, function and business even if confidential. Answers are not always truthful as employees can fear that the confidentiality is not real, but in general the trend if not the absolute results can be a useful indicator.

    #122668

    Sumit Ram Bani
    Participant

    I believe it is important to track employee satisfaction through some company surveys for at least 1-2 years after integration.

    #122710

    Jesslyn Zeng
    Participant

    Yes, we should certainly consider, measure and track employee satisfaction levels because employees form the backbone of an organisation and are one of the most important stakeholders to any organisation. Measuring and tracking employee satisfaction would allow for success in cultural integration and the overall success of an acquisition.

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