Merging two organizations into one takes effort and commitment

When Tvilum acquired Steens Group earlier this year, one could have thought that this marks the end of a process. However, this was only the beginning and the challenging work required to merge two companies into one, along with processes, procedures, ways of working and culture was about to start. What does it take to fuse two companies and two cultures into one, building on each other's strengths? We spoke with Ulla Nielsen, Integration Manager responsible for acting as a liaison between the two companies and making sure our integration efforts are on track and on point.

Ulla, from a theoretical perspective, what are the issues that need to be considered when setting out to integrate two companies and two cultures?

When it comes to M&A (mergers and acquisitions), the first step would be to do proper due diligence. That incorporates getting all the knowledge and knowledge possessed by the organization planned to be acquired out and documented to avoid any future surprises. At the same time, one must consider that at this stage the two companies are still competitors, and one must also consider that the acquisition might t still be put off. So, the insight and visibility at this stage are still limited. But the overall goal is to gain an understanding of what it is that is being acquired – is the leadership culture similar or different, is the company run on the same basic principles.

Once all the operational issues are settled and there is clarity and willingness on both sides to go ahead with the merger, the rest is very much about communication and culture. Even though, in this case, Steens Group was a competitor, and we had some idea of their culture and ways of working, the reality was not imminent before the deal was done. One must decide on the possible approach from the very beginning – should it be a “one company, one culture” approach or will everything continue as it is and will be kept separate. 

How should internal communication towards employees regarding the acquisition be handled?

It depends on the approach, but if a company is bought with the intention of having it continue its operations also under new ownership and management, then the people deserve some credit. Afterall – their contribution is the reason the company was an attractive acquisition target in the first place. Staying humble and respectful towards what the company and people have achieved is important. But also keeping up an open dialog and addressing the positive implications of the acquisition. Keeping the entire organization informed of future developments will foster understanding and benefit all parties involved.

What else should be considered in terms of communication and how do you see the integration managers' role in this?

If the top management of the merged companies is mostly involved in integrating the two businesses, from a business perspective, then it is the integration managers role to make sure we remember our people – because in the end of the day, it is the people that implement the changes and create the value. Treating our people well and making sure they understand the reasoning behind the changes throughout the integration process is of utmost importance.

Could you describe the contents of your toolbox in an integration such as this? Which theoretical concepts do you employ to ensure a smooth integration?

The toolbox is quite big, and I am happy that there are many theoretical approaches that we can choose from to ensure a smooth integration. Here are some I draw inspiration from (among others):
Kubler Ross change curve – initially developed to explain the emotional implications on people following a personal tragedy, the change curve has since been adapted to explain the impact of changes on people in their working environment and business in general. The change curve in the context of business helps one understand and deal with changes and personal transitions. It helps to predict how employees will react to change and how to support them throughout the change process.

Rick Maurer’s 3 levels of resistance – according to Maurer’s theory – levels of resistance can be divided into 3 groups – I don´t get it, I don´t like it, I don´t like you. The measures to tackle each level of resistance are different. In the first case, resistance can be alleviated by providing employees with information based on facts, figures, and ideas. To counteract Level 2 resistance, which mostly has to do with emotional reactions to change, one must deal with removing fear, creating excitement for the change and reassuring people that nothing bad will happen to them. Level 3 resistance is all about dislike and distrust of the person implementing the change. Reducing resistance on this level takes repairing past relationships and rebuilding trust.

Kurt Lewin Model of Change - Lewin proposed that the behavior of any individual in response to a proposed change is a function of group behavior. Lewin divided the change process into 3 parts, the current situation being the status quo. The 3 stages of his model include unfreeze, implement change, and refreeze. The unfreezing stage encompasses efforts to determine what needs to be changed, ensuring support from management, and creating the need for change. The change stage is where the actual changes are implemented – this involves communicating change throughout the organization and making sure proper support systems are in place. Stage 2 also requires leadership efforts to define the vision and ensure the motivation of the organization. Stage 2 is all about clearly communicating the benefits of change and encouraging employees to get involved. The final stage – also called the refreeze stage – is to sustain the change the organization has implemented. This stage consists of actions such as incorporating the latest changes into the culture, developing, and promoting ways to sustain the change in the long term and offering support and training to the employees so they can embrace the change that just happened. And one must not forget about celebrating the successful completion of the change process!

Regardless of which theory you base your assumptions and actions on, one could say that members of the organization can be divided into 3 groups: 20% will embrace the change and go along with it, 50% are hesitant and 30% will resist change no matter what.

How would you describe your role as Integration Manager in all of this?

The role of integration manager is to support the whole integration process – not from a business perspective which is the task for the functional leads, but from a Big Picture perspective – outlining the necessary, large-scale steps needed to be taken, highlighting different initiatives, and putting in place milestones to measure progress. And of course, constant follow-up. In many ways, the role of an integration manager is like that of a project manager – the methods are, to a significant extent, the same or similar.

How do we know that the integration process has been completed – what had to have happened?

We can call this a successful integration when the organizational structure is in place, everybody knows their role and position in the new setup and business has returned to its normal course. This time with new colleagues and a fresh look at the future. A setup where everybody is aligned in the direction we are heading as a company.