M&A leadership – the importance of balancing people and culture.

During an M&A, leaders need to inspire team members by creating clarity about the new relationship and communicating about the integration process with enthusiasm.

Leaders should be honest and not leave employees in the dark about the deal.

To the extent possible given legal and other restrictions, they should keep employees updated about next steps and how their work might be impacted by those next steps.

Beyond clarity and communication, however, leaders should inspire people via coalition building.

Leaders from all the companies involved in the deal should set an example by reaching out, forming strong bonds, and showing a united front to everyone, not just a select few at the top.

By doing so, they will signal to employees that the success of the relationship hinges on teamwork.

They will also nurture a sense of belonging. When people feel like they are part of the new culture, they will be more likely to mobilize and complete their work enthusiastically.

As they inspire employees, leaders should also deliberately create an approachable environment where employees feel psychologically safe.

When employees feel like they are free to express their thoughts without judgment and know that the feedback leaders give them in return is constructive, they will be more comfortable pitching ideas that might give the newly merged companies a competitive edge.

Approachability can be demonstrated through words and body language, so authenticity is key for leaders who are leading people through a disruptive change process.

Lack of approachability increases skepticism and flight risk.

When companies merge or get acquired, employees might feel in limbo about their professional futures.

They might wonder what their place is at the new organization—or even if they’ll continue to have a place at all.

Granted, there are sometimes tough staffing decisions that must be made during the M&A process.

It is important that leaders handle such decisions with empathy and grace and help these employees find their next opportunities to the extent that they can.

As for the employees who remain, leaders should prioritize coaching and mentoring, which help employees feel supported and connected to the new organization.

Without it, they might start to grow weary and begin looking elsewhere for employment.

Through a robust mentorship and coaching program, companies that have undergone a merger or acquisition can grow the next generation of leadership that will drive the new company forward.

From my experience, leaders who are not proficient with these fundamental competencies and are focused on the collective results of their teams have proven to be less effective at achieving desired outcomes during these types of transitions.

Understanding the interdependency of people, culture, and effective leadership is critical to a transaction’s success.