Traditional M&A (Mergers & Acquisitions) is the stuff of financial analysts, with few, if any, technology experts as active participants. As enterprises continue to digitize their value streams and business models, they cannot expect to maximize M&A value while treating their employees like passengers who just go along for the ride. Business and technology leaders should apply employee digital experience best practices to their M&A programs to drive increased long-term value from their deals.
Traditional M&A can be like setting employees off on a journey without telling them where they are headed. Unclear communication and uncertain destinations cause delays. Unexpected roadblocks without tools and support to help employees overcome the hurdles leads to few people making it to the point where the deal delivers business value.
An “employee experience” approach to M&A entails:
Early exploration and planning of multiple paths.
Making quick decisions based on employee needs.
Empowering people with digital tools to overcome the obstacles they encounter along the way.
This approach reduces risk and accelerates integration of the deal’s net value. Incidentally, your digital agility will improve by merely practicing the employee experience approach. There is no reason to risk failure in M&A when you can avoid it by adopting this alternative strategy.
Experienced leaders realize that organizational change management is crucial for successful M&A. But too often in past M&A events, businesses railroaded employees rather than giving them free rein to adapt on their own terms.
Integrating effective employee digital experience into your M&A program transforms individual contributors and front-line managers into change agents, which in turn:
Reduces risk. “People issues” are the top reasons why M&A fail. Investing in good experiences for employees reduces the risks from losing skilled workers, low adoption rates of new business processes, and culture clashes. Good experiences increase the odds that the deal will be executed successfully.
Accelerates value gain. Unplanned integrations create churn and technical debt that eat away at financial investments and cause delays. Clear communication, early buy-in, and employees who can solve their own problems during the integration reduce friction and fatigue. Everyone gets to the destination faster when they know where they’re headed and can power their own voyage.
Improves digital agility. M&A are times of change, so use the opportunity to teach people how to be adaptive in this “crunch time” so they can continue to be a part of the innovative organization after the M&A. Don’t let a good crisis go to waste: the next digital transformation initiative will come soon enough.
For empathetic companies, it may seem obvious to apply organizational change management and employee experience design methods during M&A, but combining them can be a challenge. Organizational change management facilitates communication about the “why” and makes sure everyone is on board for the journey. Digital employee experience design helps build empathy, explore solutions that address user needs, and iteratively evaluate progress.
In the end, the business must buy into an employee-focused orientation—employees will know if management is “faking it.” Below are some tips for how to approach employee experience-centered M&A.
Tell stories early and often to visualize the journeys. Stories—not data—motivate people. Start creating employee-focused stories early, such as while evaluating targets during due diligence, so that you can distribute them when the deal is announced. Communicate stories about the “why” and “what” and “how” of the integration. Collect and amplify stories from employees as they progress through their individual change journeys, from awareness to knowledge to ability.
Frame employee journeys to minimize uncertainty. It’s human nature to expect the worst. When people anticipate a better workplace in their future, their uncertainty lessens, and everyone is more productive. Still, there will be stress and complaints—be honest and transparent. This includes being immediately clear about the paths for individuals who are being let go and the departments that will disappear once the transition is completed. If employees can be confident that they will survive the transition, they are more likely to collaborate during the entire journey.
Have your maps ready to make quick decisions. Maps and models help you make quick but informed decisions. These take many forms, such as end-user personas, enterprise architecture frameworks, application dependencies, and skill assessment mappings. Update your maps as you discover hidden roadblocks and create new roads.
Scout several routes to build momentum. Your business objectives will look great on paper, but you will need trailblazers taking steps right away to explore the actual landscape. Engage early adopters, who will know digital shortcuts and take unexpected trails. Get them to your anticipated destination and have them report back on what they see. Your scouts can tell stories about their journey, suggest digital solutions, and tell you what to avoid so you can update your maps. As guides, they can lead the waves of employees who set out on their own journeys.
Staff adequately to deliver on the promise of good experiences. Making M&A everyone’s part-time job is a recipe for disaster. Your experts at organizational change management and user experience design should focus their skills solely on M&A during the transition period. Create IT help desks so that when breakdowns happen (and they will), you can fix them right away. Assign experienced digital “pilots” and “captains” to navigate and stand by to help at every step of the journey. People remember the competent aide with a quick solution more than they remember the problem.
Schedule the travel to avoid fatigue. Change fatigue is real. Different people can handle change at different rates. With modern tools, IT can often make a lot of changes, faster than employees can adopt them. Stage the simpler changes into reasonable chunks first and build up to bigger changes later, making sure you always satisfy the transitional service agreement. Constantly evaluate employee digital experiences and spread the biggest hurdles out to avoid exhaustion.
Empower people to clear their own roadblocks. Don’t send your people off unarmed to combat treacherous terrain, stormy weather, and unfriendly inhabitants. Give them digital tools to overcome obstacles on their own. With digital transformation, that can mean access to IT tools such as low-code platforms and training in areas like data analytics. Necessity is the mother of invention: encourage and enable innovative solutions.
Celebrate the end results to get ready for the next trip. Recognize and toast everyone’s hard work at the end of this M&A journey. Spotlight the change agents and early adopters who helped their colleagues through rough times. This is not the end of the digital agility trek, but the beginning of the next leg.
Mergers and acquisitions are significant business events. They are also important milestones for the employees involved. To reduce risks, increase value, and enable long-term transformation, business leaders need to integrate digital employee experience best practices to foster the changes they require from the M&A.
Keith Instone has been practicing user experience for over 30 years, spanning academia (studying the science of human interaction with technology), industry (with IBM), and as a consultant (to startups, Fortune 100 companies, and in between).