In our last blog post, we discussed the importance of integrating “best practices” during mergers and acquisitions to maximize efficiency and reduce costs. But that’s only part of the story in an integration; in this blog, we will tackle the issue of culture integration.
When any acquisition is announced, the press release invariably extols the virtues of the acquisition and rarely fails to mention how well the company cultures mesh. However, in too many cases, that is the end of the culture discussion as the essential process and data integration takes precedence and dominates the work effort.
“Intentionally addressing culture can be challenging and time consuming. Putting off culture concerns until later may seem like no big deal, but you will pay for it eventually,” said Tom McGill, Profit Resources Director of Customer Experience. “Investing in culture from the beginning will reap valuable dividends in the end and will help the process run smoother along the way.”
Aggressively taking on the cultural reconciliation is imperative to a successful M&A integration and is driven by a communication strategy that begins as soon as permissible and continues well past the actual data conversion. Simply sharing core values, mission statements and the like will not cut it. Great cultures are built and shared through stories, also known as “reasons to believe.”
“This is the perfect time to create strong reasons to believe by using real-life examples of how someone in the FI delivered upon the core values,” McGill said. “Tell those stories early and often throughout the integration period.”
Other tips to integrate and strengthen a combined culture include:
- Communicate openly and honestly with employees from the purchased institution regarding their future. If leadership does a poor or misleading job of communicating with those who may be displaced, they will have lost all credibility with those they wish to remain.
- Where possible, assign ambassadors to new employees. Choose those ambassadors well. A good ambassador is one who not only knows how the bank operates, but also why the bank does what it does.
- Actively celebrate milestones as they are achieved. Look for ways to create reasons to celebrate.
- Utilize social media to have bank leadership tell their stories and share broadly. Private YouTube-type videos and even podcasts can be very effective.
- If possible, use those same channels to interview customers and have them tell their stories, focusing on how the institution helped achieve their goals.
In summary, an FI should attack the cultural reconciliation as aggressively as it attacks the data processing efforts. Share the FI’s story through words and visuals to bring the core values and mission statement to life. And, most importantly, be forthright and timely in your communication to those who will be displaced.
Profit Resources specializes in identifying profitability improvement areas for financial institutions through revenue growth, cost control, streamlining processes, and effective use of technology. Contact us to learn more about our personalized approach to propel growth and improve profitability.