How To Right Time Your M&A Employee Surveys
Most M&A employee surveys fail during the process of integration. This failure takes place due to incorrect timing more than anything else, so, it is important to learn when is the right time for M&A employee surveys.
When is the right time to conduct an employee survey for a company that is being acquired?
A quick question about culture assessment best practices: Is right after close the best time to send out a survey to both acquiring and target companies? I imagine that pre close you had run into legal and privacy hurdles that would not allow the acquiring company to ask the target to complete the survey/questionnaire, right?
And during diligence, the acquiring company could use other methods (like observations from deal team meetings and any publicly available data) to get a sense of the other company’s culture.
RESPONSE POINT 1
It is absolutely the worst time to send surveys right after the close as people in both the companies are highly anxious!
RATIONALE
The problem is that most of the time people tend to get the timing wrong and thus, end up getting horrendously biased results which in turn creates new challenges for the organization.
Remember, in a typical acquisition, HR teams are allowed to only get involved after the closing-day and in some cases, after the announcement date. Prior to that, it is only a couple of specially dedicated HR personnel that may be involved during the due- diligence stage.
Once the closing is done, both HR and management teams are curious to get in-depth understanding of the employees of the acquired company. That is why, their natural reaction is to conduct an employee survey.
However, think of a typical employee survey. These surveys try to get employee input for productivity, attitude towards management, retention, career development, training opportunities and culture. Under stable operations, employees are likely to provide a more unbiased opinion.
When an announcement is made, most of the acquired company employees go through a level of anxiety, face uncertainties and many of them start questioning the rationale of acquisition. Due to limited amounts of available information coupled with their intrinsic anxiety, and lack of transparency by management, the employees start losing trust on management and become uncertain about their future with the organization.
So, if you conduct an employee survey of the acquired company, you are highly likely to get biased information on all aspects of a typical employee survey.
RESPONSE POINT 2
One should always do a survey about the same time as the Due Diligence (DD).
RATIONALE
This is the best time to conduct an employee survey for both acquired as well as acquiring company. At this stage, usually news about potential acquisition is still highly discrete. Moreover, companies prior to a binding offer of an acquisition, try to stabilize operations as much as possible. Thus, quality of received input is likely to be high quality.
RESPONSE POINT 3
To overcome privacy issues you either get the target company to conduct their own survey or should ask an independent company to conduct a survey.
RATIONALE
To conduct an employee survey around the DD stage can be conducted by the target company (company to be acquired). To prevent any privacy or competition issues, the target company can always provide a summary anonymized survey with the condition that all details of the survey results can be made available post the acquisition. Alternatively, companies can use 3rd party service providers who can conduct an independent survey and share only pre-agreed details to the acquirer (and the acquiring company in some cases).
RESPONSE POINT 4
The next time to conduct an employee survey would be at least 6 months to a year after the closing once the situation has stabilized.
RATIONALE
The first few months post-closing, are linked with initial excitement, anxiety and other organizational changes linked with an acquisition. Once the changes have been introduced and the organization has reached a certain stability, that is the earliest time when an employee survey can be conducted again.
Many companies want to understand the feelings and alignment of their employees once the process of acquisition is completed. This survey is conducted to compare-and-contrast with results obtained from prior employee surveys.
Any attempt to conduct another employee survey before a stable state is reached, will give biased results including showing mistrust towards the management, casting doubts about their career development and training, and throwing shadows on their loyalty to the company.
This article is written by Anirvan Sen.
It is edited and keyword optimized by Blanca Monni.
