Regardless of industry, all mergers are complex initiatives. Understandably, all parties are laser-focused on financial and operational matters. While these are all critical issues, the opportunities presented by acquisition can be squandered if leaders lose sight of the human part of the equation. For both sides of the transaction, it is wise to initiate both a human capital and a cultural audit before proceeding too far down the acquisition trail. Learn more about these best practices in this article.

1. Human Resources
The Melding of Cultures During & After a Merger
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I D E A S T O H E L P
G R O W Y O U R
B U S I N E S S
GROWTHBIZS T R A T E G I E S
BY JAY MESCHKE
R
egardless of industry, all mergers are complex
initiatives. Understandably, all parties are laser-
focused on financial and operational matters. Teams
are deployed to address issues related to clients, systems,
service line congruencies, litigation matters, synergistic
opportunities, tax issues and the like. These are all critical
management issues, yet the opportunities presented by
acquisition can be squandered if leaders lose sight of the
human part of the equation.
For both sides of the transaction, it is wise to
initiate both a human capital and a cultural audit before
proceeding too far down the acquisition trail. Typically, the
human capital audit is routine as a subset of due diligence;
however, a cultural audit is often overlooked.
What is a cultural audit?
A cultural audit is simply a formal inspection
and assessment of business philosophies (e.g.,
entrepreneurial versus corporate or traditional), decision-
making styles, employee engagement similarities or
differences, and philanthropic/community mindedness.
Employee attitudes regarding compensation and benefits,
training, and performance recognition should also be
surveyed and considered.
Often, a senior executive of the acquirer is tapped
to survey these issues and produce a report suggesting
cultural pros and cons of the combination of the
two entities. Although subjective in many respects,
assumptions derived from this cultural assessment will
assist in formulating areas of emphasis from a people
perspective after the merger is agreed to, recognizing that
the assumptions might change once the two organizations
are exposed to one another.
Communication is critical on several levels.
Organizations must carefully consider the impact of the
deal on the workforce as they announce transactions and
integrate companies. Communication is vital to success
Our business is growing yours
and should be executed through and after a post-merger
announcement. Merging organizations are advised to
outline a human capital strategy early in the process,
subject to typical contractual limitations. At a minimum,
the top HR professionals should get acquainted to develop
common ground and open lines of communication.
Although it is rare that there is truly a “merger of equals,”
let’s assume such an audit is a two-way street whereby
both parties conduct senior executive exchanges in a
nonthreatening and constructive manner.
Reaching agreement on a communication plan
supported by senior leadership of both organizations will
be a key aspect of this discussion. The goals: to combat
the natural rumor mill and to be as open and honest with
employees as possible.
©Copyright2017.CBIZ,Inc.NYSEListed:CBZ.Allrightsreserved.
Article reprinted from Winter 2017

2. GROWTHBIZS T R A T E G I E S
JAY MESCHKE
EFL Associates, a CBIZ, Inc. company
Kansas City, MO • 816.945.5401
jmeschke@eflassociates.com • @jay_meschke
Human capital matters.
As we all know, the merged organizations want to
retain the best and brightest from both entities. Articulating
what happens to people who might lose their jobs is the
most awkward topic, but it is better not to leave this to
chance; have a plan in place.
The use of retention bonuses, career transition
services and similar tools can ease the burden on
employees’ minds. People remember how they were
treated on the way out. It is wise not to risk the long-term,
detrimental effects of public relations fallout.
There are implications beyond the obvious.
Business culture affects decision-making and
leadership style, as well as how people work together.
It is a key factor influencing management decisions and
business functions. While a transaction is not likely to be
stopped for reasons of business culture, those managing
the deal should recognize and direct the impact of culture
to support their desired goals.
Many progressive acquisitions and mergers employ
outside third parties to assist with such deliberations and
communication. This may be a wise investment under
certain merger scenarios.
The bottom line: Recognize that business culture
is a key component of both due diligence and change
management in the acquisition merger process. Do
everything possible to become aware of and harness
culture to promote a successful integration.