How to circumvent the Post Merger Integration culture shock

No matter the business segment or part of the world: M&A processes are always critical times of stress within a company. Although the organization charts and communication of the organization's new strategic drivers are quite clear, the synergy of informal networks can take much longer than the first 100 key days of integration, negatively impacting expected synergies.

What are informal work networks and how important are they in M&A?

Large organizations tend to be more varied in the composition of their staff and bring a cultural scene of different shades. Professionals trained in different areas establish communication flows in parallel (and sometimes opposite) to what formal organizational charts show. Are collaboration, energy and innovation networks that are created organically, giving the true pulse of an organization. Companies are essentially human relationship activities and hence the need to observe business integration in synergy with these networks.

Nourished by what was popularized in Brazil as “pawn radio”In addition to other factors, informal networks determine a company's success or tactical failure beyond strategic planning. It is at the moment of “decompression” of the work that bonds of trust are established, empathy leaders. This is where a naturally viralizing and mobilizing flow of information from the winning organizations is created. With this, it is possible to get an idea of how much these networks interfere - positively and negatively - in work routines and, consequently, in the results of an organization.

Of course, these informal networks do not overlap or replace the formal hierarchical relationships defined in the organization charts. Affinity groups and day-to-day needs form in parallel with departments and sectors. And a contemporary company, aware of the infinite possibilities that digital interconnectivity brings, can no longer ignore this scenario to which the porosity of internal and external limits is added, as well as the multifunctionality of its employees.

Informal Networks in M&A Processes

Now think about the influence that informal networks can have on a merger and acquisition process. Considered a fundamental part of the new organization that is being designed, these networks serve as an initial parameter for the consolidation of an organization chart that dialogues with the current scenario among the group, because that is precisely where the organization is created. synergy expected by shareholders. However, most companies continue to plan strictly formal fuels under the "command and control" model of the past century without considering the integration of what will bring the new organization to life: your work networks. The result is often a traumatic process: employees fearful of the uncertain future without the willingness to dedicate themselves to the success of the integration process. In the end, the biggest damage is to the new company, which at the moment when it needs the strength of the group of employees, sees its fragmented picture and the cultural shock giving rise to egos play, power struggle and general lack of spirit.

First of all, have patience. The speed with which human networks integrate may be much slower than expected and may never happen. Setting rules and limiting communication can get in the way the process further, as pre-existing work networks tend to remain after M&A. However, these and other variables can have their effects estimated and even managed when a mapping of informal networks prior to the merger.

The methodology used by Tree Intelligence proposes a analysis of these communicational flows before and after the merger between companies, establishing a management plan for human networks that reduces risks and increases the chances of creating synergy. This makes it possible to diagnose the peculiarities of relationships between colleagues from different sectors, identify informal leaders and then monitor the evolution of the new network that will be created from the merger.

These informal leaders are key actors at any turning point in organizations. They act as facilitators of integration processes, multipliers of the company's identity, bridging sectors that need to act in partnership, that is, they are the key agents promoting true cultural integration, the one that happens behind formal organization charts, but can also inspire them.

O prior knowledge of informal networks of a company enables the traditional redesign of physical space, mission, values, and above all hierarchical relationships to match what the organization will pulse in the future. Obviously, this depends on the culture the company aims to achieve after integration, whether more flexible, more horizontal, but always networked. Before that, however, the biggest challenge is that integration actually happens. Given the equal importance of bringing together informal networks rather than formalizing new leadership and management styles, the merger process is likely to be much more successful in a much shorter time than normal.

Formal and informal networks are two sides of the same coin and, by mapping both, calibrate each other toward common goals: creating synergies and the success of the new organization.

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