How to Guide Your Team Through Change After Acquisition

Acquisitions are often followed by low morale, lost productivity, and conflict between teams due to the fear and anxiety of employees.  The speed of successful integrations of newly acquired or merged businesses turns directly on how leaders manage these problems.

Keeping your employees and team members engaged and working efficiently during times of change requires a recognition that substantial changes to the operational policies and procedures of a team typically cannot be undertaken at one time without hurting the organization, employee productivity, and morale. Effective leaders can obtain greater employee engagement during transitional periods by using a measured incremental approach to change.  However, certain changes after an acquisition must be rapid and decisive.  In those cases, successful leaders should use a dynamic process to achieve rapid change.

Incremental Change Through Consensus

The use of incremental change requires a leader to make decisions by building consensus through collaboration.  A leader’s use of persuasive information and opinions of experts to obtain a team consensus is a benchmark of incremental change.  This type of change, by definition, cannot be forced or mandated unilaterally by someone in a position of power within the organization.

During post-acquisition integration, you can encourage incremental change through open discussion and dialogue.  Ideally, from these discussions you can help the team reach a consensus for changes to its operations and workflow.  This collaboration allows employees to feel empowered and appreciated, which reduces the fear and anxiety that commonly exists during post-acquisition integrations.  Incremental change requires that leaders keep teams engaged by making the members feel safe in the transitional process. Once an employee’s duties have been established, small gestures such as allowing the employee to suggest their job title will keep your team engaged.

Implementing Rapid Change

Incremental change can be compelling over the long term, but acquisitions that demand rapid or transformational change require decisive action that is not compatible with the slower process of collaboration necessary for incremental change.  For rapid change to be successful, incremental modifications are often replaced with quick decisions and speedy execution.  In these instances decisions are typically made unilaterally at the top and are imposed and mandated on employees. 

Rapid change dramatically increases fear and anxiety among employees.  Since employees are typically not involved in the decision-making process in these instances, they are substantially more concerned about losing their jobs, changes in their compensation or changes in their job duties.  Moreover, decisions that personally impact employees under these circumstances generally do not take an employee’s finances or family circumstances into account.

If you have to make rapid changes, such as swift cuts in headcount, a dynamic approach helps ease this painful process. The “hangen” game, described by Harvard professor David Garvin in his publication entitled “Learning in Action: A Guide to Putting the Learning Organization to Work”, is one method by which you can obtain rapid change by utilizing a dynamic process.  The process was first instituted by Toshio Okuno of Higashimaru Shoya, a Japanese soy sauce manufacturer.  The hangen game combines drastic cuts with experimentation within teams, drawing out the creativity, knowledge, and experience already held by team members.

Using the hangen game Okuno repeatedly cut work groups in half, then after each cut he asked those observing the process, including members of the team themselves, to identify unnecessary or non-critical tasks that could be eliminated.  Based on this feedback, Okuno was able to quickly redesign workflow, reduce headcount, maximize productivity, and increase efficiency.  The hangen game applies pressure to encourage creative problem-solving.  As a result of this process teams often find entirely new methods of tackling old problems.  Okuno stated that under normal conditions “there simply is not enough pressure to allow creative thinking to occur,” and as a result, rapid change would not be possible. 

This method of rapid dynamic change requires extensive feedback and participation, but during transitional periods employees are often less rather than more likely to speak up. Job anxiety during uncertain times might make them reluctant to test the waters. However, an employee’s opportunity to provide feedback and give recommendations regarding additional steps that can be taken to increase efficiency will increase morale during this difficult period.  Once sufficient cuts have been made to improve efficiency, employees should be informed that their jobs are safe as long as they participate in your dynamic process.

Maintain Employee Engagement

Whether you implement incremental or rapid dynamic change, you must listen to your team. You also have to participate in the process, using your judgment to decide when change isn't needed or workable.  Creating change through an incremental process is more desirable than forcing rapid change in organizations.  Incremental change empowers employees, leading to increased morale.  If you must make rapid changes, using a dynamic approach, such as the hangen game, helps keep people balanced and minimizes low morale. In the worst circumstances when you cannot guarantee people's jobs even after the initial cuts or layoffs, make sure your team knows that you personally value them. 

In the end, whether you achieve change incrementally or through a rapid dynamic approach, it is critical to remember that you need employees to be engaged to for a successful integration after an acquisition.

Keyvan Samini is currently the CEO of Pitchtime and has served on the board of directors of various software and hardware technology companies. He received his master's in finance from Harvard University, his MBA from the University of Southern California, and his J.D. from the Ohio State University, where he served as law review editor.