4 ways leaders can guide teams through the acquisition process

November 14, 2023 2:23 PM

Colleagues shaking hands across the conference room table.

Acquisitions can spark public excitement as recognizable brands are bought by recognizable companies, shifting the competitive landscape for their particular industry. But for the workers caught in the middle, acquisitions can be synonymous with anxiety.

Layoffs are often the assumed first step: The acquired company may make some cuts to their workforce, at least to ensure there aren't redundant roles — there usually aren't two HR departments, for example. In one of the more notable acquisitions of 2023, software company Splunk cut 7% of its workforce, or a total of 560 jobs, ahead of being acquired by Cisco.

If the worker keeps their job, they're now under added pressure to accomplish competitive business goals; a seemingly impossible task given that approximately 70% to 90% of acquisitions fail to achieve their expected value, as cited by Harvard Business Review.

In order for an acquisition to strengthen and further a company's mission and revenue, workers need to have a clear understanding of the motivation behind it and have some agency, despite the change happening around them, underlines Vannessa Gennarelli, author of "Surviving Change at Work" and principal of Fortuna, a change management and consulting firm.

"There is going to be just this mountain of uncertainty happening," says Gennarelli. "I really encourage leaders to equip folks with the tools to career plan in parallel whatever bigger decisions are being made."

For Gennarelli, communication and transparency (as much as the acquisition contract allows for) are key to a successful transition, meaning buy-in from employees who will be responsible for reaching new, challenging goals. She shares her four best practices for leaders embarking on this big change with their company.

Recognize organizational grief

Even without major layoffs, an acquisition ends the stability employees once associated with their work, notes Gennarelli. Their responsibilities, goals and management will likely change to some degree, and the workplace culture may become momentarily disrupted, if not reconfigured, to reflect the new owner. Gennarelli advises leaders to hold space for employees to feel frustrated, confused or saddened by the new changes. Everyone, including leaders, will need time to adjust.

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"There are pieces of an acquisition that are really going to shake up employees at an emotional level," she says. "Employees probably appreciated the consistency they had in their day. There has to be an understanding that there will be organizational grief when you share the goals of the acquisition."

Communicate and articulate

As soon as leaders can legally begin to share news of the acquisition, it's imperative that they are prepared to share the company's updated goals and mission with their workforce. But Gennarelli advises leaders to not only lay out what the company needs to accomplish to make the acquisition successful, but why the company is being acquired and what opportunities workers have for career changes and growth.

"It's really important to articulate the goals of the acquisition — maybe it's because your company's products complement the other company's fuller suite, or maybe the acquiring company had an eye on a particular market segment," says Gennarelli. "Maybe it's about addressing competition. Whatever the motivation is, make it clear to employees that there is an opportunity here."

Implement change management

Gennarelli emphasizes that leaders have the power to manage how employees experience change. She encourages leaders to make incremental changes to employee's routines and responsibilities while continuing to communicate with employees about how the changes are impacting them. Ultimately, employees are the ones who perform the tasks and projects that need to get done, so they know whether the changes are likely to be damaging or beneficial to larger company goals — leaders should know how to take advantage of that, says Gennarelli.

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"If you already shared your goals, then really tap into your employees' expertise and implement their [feedback]," she says. "This will also help folks feel way more comfortable with the change they are investing in."

Allow for agency

Despite the acquisition itself being out of employees' control, they should be treated as active participants who can decide how specific changes are implemented, their place in the new company and whether the company is headed in the right direction for them, Gennarelli explains. This means using the above practices with the intention of empowering employees to question the company's new identity and who they are within it. Some employees, whether by their choice or the company's, won't stay, but they should have at least some insight or guidance to think it through, advises Gennarelli.

"When leaders are working more on the strategy part of the integration, there's usually this communication vacuum for employees," she says. "Use this time to empower employees to think critically about their careers and where they see themselves in the next iteration of the company."