MANAGING THE INTEGRATION OF BUSINESSES: MERGING COMPANIES, DISCIPLINES AND CULTURES Ella Minty
Integration of tangible assets, equipment, and operational parameters can often be streamlined and rather easily achieved – the hardest, most challenging task in business mergers and acquisitions is the integration of cultures, mind sets, behaviours and values.
• The milestones related to business integration and change management
• The way in which you, the PR practitioner, can influence and guide the change efforts
• The complex issues surrounding diverse cultures (societal and business)
Change rationale and sustainability of change efforts
Change – more often than not – is not easily embraced or understood, let alone inherently accepted. To change, at the most basic level of the concept, implies to restructure and approach differently known and established business conducts, principles, and operational styles.
Ever since the onset of globalisation – some would argue almost concomitantly with the end of the Cold War – the landscape of business competitiveness, customer value proposition, client services, and engagement has been agile, aggressive and ruthless.
Few businesses have ever been established with the purpose of doing good; the main purpose of their existence is that of making profits, having a good return on investment, growing and expanding on the marketplace. To exist, to create jobs, to invest in communities, to be environmentally friendly and socially responsible are add-ons.
According to McKinsey’s  latest research on strategic acquisitions, these fit into the following archetypes:
• Improving the performance of the target company
• Removing excess capacity from any industry
• Creating market access for products
• Acquiring skills or technologies quicker or at a lower cost than they could be built in-house
• Picking winners early and helping them develop their business
To make any merger or/and acquisition (M&A) sustainable, the status quo would need to change to accommodate newcomers, streamline the wider performance of the integrated business and ensure that, with an increased scope of services/range of products, competitiveness is retained and profits increased.
Change Management – from both an academic and practice viewpoint – should represent a relatively straightforward, easily embraced discipline for PR practitioners across the professional spectrum.
Leadership advice and support in navigating through uncertainty and emotional turmoil
Human Resources Management (HRM)  has a clearly defined role in M&A – these professionals ensure those impacted receive appropriate counselling, advice, relocation support and a substantial financial package in the case of voluntary/compulsory redundancies, while assessing and maximizing the employees’ potential to achieve the new business entity’s strategic objectives.
While HRM oversees the political and corporate compliance of, effectively, people movement, potential, and performance in times of change, the PR function should oversee:
• The complexities related to engaging, addressing and understanding people’s fears and emotions
• Making sense of what is happening
• Ensuring any inward or outward communication is clear, unambiguous and truthful
The literature on employee communication and engagement – in times of change – is abundant with working models, templates, and various recommendations. What it is hard, if not almost impossible to find, is the advice the Corporate PR function should offer the leadership during times of change, acting like a real partner of dialogue and sounding board for the obvious: “Have we done the right thing?”
Leaders are as fallible and human as employees are – they simply manage to hide their emotions, uncertainties and insecurities better. A leader cannot afford to appear weak, insecure and not fully appraised of what the short, mid and long term strategy is going to be for the newly acquired business or for the newly created entity.
That is when the PR practitioner comes in: he/she should be their trusted advisor and a highly regarded professional who can provide them with unbiased advice. It is the PR consultant who should be counselling the leaders/leadership team, allay their fears, provide them with “what if” scenarios and be there to listen.
It is the PR practitioner’s ethical and professional duty to tell them what they need to hear, not what they want to hear:
• Are the new employees not fitting in? Why? What should be done?
• Are there any language barriers that should be seamlessly overcome? How?
• Would a Muslim woman feel uncomfortable sharing an office with a Western man or vice versa?
• What are the pitfalls of having a young Executive in charge of individuals who could be his/her parents? Is the leadership ready to address them?
• Would the potential M&A have a negative reputational impact on the current business? What will you do about it?
• Will the stakeholders (the current internal ones as well as the external) understand the rationale that underpinned/will justify the M&A? What would you recommend?
• What will the competition’s reaction to the news be and what working scenarios have you prepared for this? What should the CEO/Board do and why?
• Will the markets (if you are working for a listed company) react and what would you recommend being said/done?
When worlds collide
If you are not familiar with the psychological principles underpinning Maslow’s Hierarchy of Needs , make sure you become so – and quickly. If you have never familiarised yourself with the concepts of power-plays, cross-cultural communication and negotiation techniques, all clearly explained and justified for business contexts by Prof Hofstede’s  seminal works, make sure you do – and even faster.
The collision of cultures – business, national, societal, personal – values and behaviours becomes poignant in M&A and business transactions. Not all people relate to the same things in the same way: some have a job because they need to meet their most basic needs of physiology and security, others because they want to be appreciated and respected by their peers and the very few because they wish to push their boundaries of knowledge and self-fulfilment.
The role of the PR practitioner is to make sure that the corporate messaging, engagement styles and communication techniques meet these categories’ level of interest and understanding. You cannot assume that, in times of change, those who are strictly concerned with having a roof over their head would like to hear their new boss talking to them about the preservation of the ozone layer.
Understanding the human dynamics at play – across genders, religions and nationalities – will provide you with an incredible competitive advantage not just with regard to the recognition of your added value to the business but, primarily, concerning your level of competency and knowledge. You will be that trusted and respected Leadership Advisor who:
• Can address complex human psychological challenges
• Can understand the relationship between structural and organic change
• Can provide advice on a variety of risks and opportunities associated with mergers and acquisition
• Can substantiate his/her recommendations with empirical evidence
• Can prove that public relations is a strategic management function
Ella Minty is a Founding Chartered Public Relations practitioner, with over 15 years of high level Government and international bodies expertise in corporate reputation, leadership and crisis management, specialising in communicating and engaging with key corporate stakeholders spanning across business disciplines and governments, including investment markets, lender organisations, national and international media, NGOs and project communities.