Building Trust and Paving the Way to a Successful Merger or Acquisition

When it comes to stress and uncertainty, there aren’t many scenarios quite as disruptive as a company merger or acquisition. It’s not just disruption at the corporate level, either. Individuals throughout both companies are affected, often experiencing doubt about what their future might hold within the changed organization.

Moving beyond the individual impacts and taking a wider look at these activities, organizations face significant challenges to make a merger or acquisition successful. These range from cultural, intangible implications to very specific legal and due diligence concerns.

As we recently experienced our own acquisition with the addition of Ringtail, I wanted to reflect for a moment on a few of the challenges we faced as a company and lessons we learned along the way. After all, due diligence and preparing for an acquisition or merger is never easy or straightforward. You’ll need to ask enough questions and examine the data available to you to gain enough visibility into the business, cultural, and leadership elements to enable a successful transition and onboarding.

Trust as a Foundation

Successful mergers and acquisitions require one key thing—trust—and they require a lot of it to really work. Trust involves communicating, acting, and operating in good faith with the other organization, from its leaders down to everyone on the ‘front lines.’

There’s no getting around the fact that betraying trust during a merger or acquisition can turn a potentially strong relationship into an incredibly negative experience or, even worse, sabotaging the whole thing entirely. Every merger or acquisition has a set of rules you need to abide by legally, for an assortment of reasons to mitigate as many risks as possible.

Know the Information

Merging companies together in any manner also means merging their documents and information but doing so in a manner that doesn’t violate the terms of the merger or acquisition agreement. On a related topic, it also requires you to incorporate the appropriate business records and systems into your own operations, which can take a significant amount of time and energy.

This is closest to our own existence as a company. Nuix is often used in an information governance and discovery capacity during a merger or acquisition to help companies identify and remediate information quickly, accurately, and comprehensively. Consider this pharmaceutical divestiture use case and the seven-step process the company used, with our help, to make fact-based decisions and comply with the rules and regulations governing its divestiture activity.

Making a Good First Impression

When you’re ready to announce the merger or acquisition internally, the initial communications and engagement activities carry the utmost importance. They introduce the brand and culture of the new company and its leaders; based on people’s perceptions, this is the time where a misstep can create a fight or flight response for the new team members.

To avoid this pitfall, it’s imperative that you are organized and have a detailed, transparent plan with a multitude of high-frequency communications and events to ensure a smooth new start. Employ a variety of communications and events, including the voices of senior leaders on both sides, functional leaders, and key stakeholders responsible for seeing the merger or acquisition through.

While you’re at it, including some culture-building events like lunches or get-togethers and handing out some company swag won’t hurt either.

Dispel the Disruption

Mergers and acquisitions happen for many reasons, but when the dust settles everyone has a job to do and customers to serve. Building trust as quickly as possible is paramount to the success of your new organization. It’s incumbent on everyone within the organization to do their part, but it starts at the very top.

Focus on dispelling the disruption, mistrust, and uncertainty that a merger or acquisition can foster. Approach the situation with integrity, understand and use the information at your disposal, and communicate clearly to all involved. If you do it right, the actual transition and onboarding will enable you to take the next steps of integration relatively smoothly and allow the business to continue to grow to greater heights.

Information Governance
Posted on December 17, 2018 by Megan Farrell