Jessie Brown, a middle-aged matronly figure was a well-respected senior HR leader in Dew Pharma, a mid-sized company based out of Prince William County, Virginia. Jessie had been with the company for ten years at the time of acquisition and she was considered one of the most knowledgeable amongst the HR team about their company. So, when Dew Pharma decided to acquire Boston-based, Smith Boss laboratories (SBL), one of the upcoming stars in the pharmaceutical research and development sector, Jessie’s name was right at the top to lead the cultural integration.
Jessie was known for her exceptional empathy and ability to build strong relationships with people from all backgrounds. And she thought it was going to be a walk in the park. But every story has to have a wicked angle. And this story is no exception.
Let’s get back to Jessie.
Just a couple of days post the announcement, Jessie was asked by the M&A lead to visit SBL and start with the cultural integration. Jessie on her part was thrilled to put her business suit on and walk into the plush office of SBL compared to the semi-urban setting of her company in Virginia.
With her charm and confidence, in no time, Jessie was able to build relationships with the head of HR at SBL and several other senior leaders. To Jessie, they seemed like an amicable bunch. It would be easy to work with these people and achieve successful integration.
But as days went by, Jessie started to feel that something was working. Despite her best effort, Jessie was not able to get the teams to adopt the cultural standards that she had laid out.
While everybody agreed on the importance of a dedicated cultural integration effort when it came to actually supporting or acting on various related tasks, people would find excuses not to do it. In the initial days, she took the excuses at face value and accommodated them. But as time passed by, she realized that it was not a one-off event but there was a systemic lack of support from the leadership.
It was not that those leaders were paying lip service or they had a sinister objective, it was that they were focused on other priorities. Somehow cultural integration was never their top priority.
Despite trying out various measures, when they did not elicit the results, Jessie decided to act upon them. She called on her good friend, Anirvan Sen, a senior business strategy advisor.
“Anirvan, I’m running this cultural integration program for our recent acquisition. While the leadership is quite vocal about the need for cultural integration but they fall short of taking action”, Jessie asked in a Zoom call.
“Interesting Jessie” paused Anirvan, “but it is not unusual. In fact, it is quite common in M&A integration that cultural integration meets this sort of fate”
“So, let me ask you this. Why did your company acquire SBL?” continued Anirvan
“To access new products and operating models,” replied Jessie.
“And what are the objectives of cultural integration?”
“To drive motivation amongst employees, to prevent unwanted attrition and to make people come together to collaborate”.
“Do you have a specific list of items or areas where your company wants to collaborate?”
“Well. I would say our company would like people in sales teams to work together, maybe in marketing, maybe product development. We definitely are trying to work together in HR, of course.”
“You have used the word maybe a couple of times”
“Yes because none of it has been formalized. It has been left to the functional leaders to initiate them and get it done”
“How does your sales team get their performance measured?”
“Profitability and revenue generation”
“And product development?”
“Efficacy of products, trial results, market adoption, risks.”
“So, how specifically are these organizational objectives aligned to the need for motivation, prevention of unwanted attrition, and collaboration?”, asked Anirvan
“Well, they are not directly linked. But you cannot say that it is not an organizational objective to drive motivation?” said Jessie excitedly.
“Is it? Why does a business exist?” continued Anirvan
“Its primary reason of existence is not motivation, of course. It exists because it produces something of value for a customer. When the customer consumes the value, it exchanges money for value. This money drives revenue and profitability. The main purpose why a business exists is because they have something of value which others want and will pay for. The main business objective is revenue generation, profitability, etc.”
“What you must realize Jessie, is that every other activity or initiative in a business must be subordinated to these business objectives” continued Anirvan, “Every subordinated activity either must contribute directly to the revenue generation or must be linked with producing value or is acted upon by a support function.”
“Why am I sharing this?,” Anirvan continued after scribbling something on his notepad, “Most organizations get it wrong when they approach cultural integration in an M&A. Culture must not and should not be treated in isolation. You need to start with what you want to achieve through cultural integration.”
“Remember empathy, motivation, prevention of unwanted attrition and collaboration are all means to achieve a business objective but they are not objectives in themselves. That is why you need to go back and tie the activities of your cultural integration program to a specific business outcome. Your efforts must align with specific business objectives”, Anirvan concluded.
After much reflection, Jessie realized that her empathy efforts were not aligned with specific growth and synergies targets. While her focus on building relationships was important, it wasn’t enough to drive the business forward. She realized that she needed to approach the integration process with a more strategic mindset, taking into account the specific goals of the company and the needs of the newly acquired employees.
With this newfound perspective, Jessie got to work. She organized meetings with key stakeholders to determine the exact growth and synergies targets and began to develop a plan to align her empathy efforts with these goals. She also made sure to communicate these targets clearly to all parties involved, ensuring that everyone was working towards the same goal.
It wasn’t an easy process, but Jessie’s hard work paid off. The company began to see a noticeable increase in growth and synergies, and the newly acquired employees felt valued and heard. Jessie’s empathy had created a positive atmosphere, but her strategic approach had been what truly drove the company forward.
From that day on, Jessie was known as the Head of Cultural Integration who was able to combine her empathy skills with a strategic mindset, delivering the best results for the company and its employees.