70-90% of acquisitions fail globally — and often, it’s because the acquirer and acquired company can’t get along with each other. Buyers should learn about the culture and values of the company they’re planning to purchase from the get-go to understand whether there’s cultural compatibility — and figure out how any friction could be reduced.
Last year, secondhand fashion marketplace Vinted acquired its Dutch competitor United Wardrobe. In our Startup Life newsletter, we asked Kinda Dalla, Vinted’s M&A integration manager, for her top tips on aligning teams and cultures post-acquisition.
Understand what drives the company you’re buying
Arrange conversations with the leadership of the company you’re buying and ask: What is the company’s overall aim and raison d'être? Where does it see itself in the next five years? How does it see itself working within the structure of a larger company? What will be its aims post-acquisition? You can then use this analysis to create a plan for how to integrate the team into your company — who will work with who and on what team or project — based on its areas of expertise and interest.
Learn about the company’s culture too. And do it as early as possible in the process. Ask the company how they define their culture, what common qualities their employees have, and what aspects of their culture must be preserved post-acquisition. (This could be anything from weekly team meetings with the CEO to bi-annual offsites.) These bits of information will help you understand which aspects of your culture align and which parts may cause friction.
Make friends with the person (or people!) leading the company you’re buying
Long-term success in M&A starts with two teams developing a future vision of the company together — and you need buy-in from the company’s founders to do that. Early on in the discovery conversations, get the founders of both companies to meet and get to know each other, without a load of other voices in the room. Involve the acquired company’s founders in all workshops and discussions of the new team mission, organisation design and the approach to the integration to ensure they have input throughout the process. This will help to build trust from the get-go.
Announce the news to the acquired company in person, at their office
Both companies leaders should announce the news together and share what’s coming next after joining forces — as well as the plans they have for the business going forward. Of course, announcements to the buyer’s team should also be planned as well in a similar fashion.
Introduce teams to each other ASAP
Generally, before an acquisition is complete, confidentiality restrictions limit your ability to tell your company about the deal. Once the deal is complete, however, bring teams and/or departments together. At Vinted, we plan a mix of live and remote onboarding and introduction sessions to offer a warm welcome to the new teams. We also assign every new colleague a buddy — someone they can vent concerns or pose questions to. We also facilitate company/department/function level events and invite the acquired company’s teams to Vinted’s celebrations such as our annual summer party, company birthday party and Christmas celebrations. These give employees opportunities to get to know each other on a personal level in a less formal setting.
Plan a big celebration
In the end, cultural integration is about both sides adapting to a new situation, getting to know new team members and celebrating a new culture. Once the deal is completed, plan a whole company party with your new colleagues to communicate a positive message about the acquisition and create a feeling of togetherness. It might also be worth planning offsites for individual teams so that they can spend time together away from the office. The format could include educational, strategic planning or knowledge sharing sessions and of course, some social events like drinks and dinners too.
On the subject of... integrating a new team
👉 Don’t make these mistakes. M&As frequently fail because key people leave, teams can’t get along, or the acquired company becomes demotivated. Here’s how to avoid those pitfalls.
📖 Do your cultural diligence. That means understanding cultural differences between your own company and the one you’re acquiring before a deal happens, to try to iron out any difficulties.
📣 Take a stand. Founders of the acquired company should be clear on what aspects of their culture and the product they worked so hard to build they want to remain intact post-acquisition.
🤝🏽 M&A integration 101. This article lays out what happens when two companies merge and who is responsible for managing the integration of teams and cultures.
🙋 Don’t neglect your team’s anxiety. Address all of the changes they will face during the integration.