How to Successfully Merge Cultures When Acquiring a Company
December 18, 2023
Leadership Lessons – Jerry Weidmann of Wolter, Inc.
Jerry Weidmann has had a very exciting and varied career. He’s been involved in work within and outside the material handling industry and has experienced joining a family business.
In 1998, Weidmann was appointed senior vice president of business development and fleet management at Wolter Inc. Shortly after this, in 2000, he was promoted to chief operating officer. He became the company’s president in 2007. Weidmann discussed with The MHEDA Journal what he’s learned about maintaining the culture after a merger. Are you struggling to meet every employee’s needs following an acquisition? Read on for advice from Weidmann.
TMJ: What are some of the biggest challenges when combining teams after an acquisition?
Weidmann: Post-acquisition integration challenges can be viewed from the perspective of change, culture, people, processes, products and services.
• Change. The day an acquisition occurs, the world changes for all the acquired company’s employees. They become part of a different company with a different vision and scope of products and services. Everything constant in their work life now comes subject to the momentum of the acquisition. The goal is to provide continuous support through the transition, to leverage what the acquired company did well and to transition into what it will do differently. Ultimately, the change is not as significant as employees will view it at the onset.
• Culture. We are a family business. The businesses we acquire are family businesses. At the core, the cultures are typically not that dissimilar. However, when you come from a smaller company that is self-contained for all elements of operations and becomes part of a bigger enterprise, the nature of the culture changes. We aim to leverage the family culture before the acquisition into the new, larger family environment. The more interaction we can foster between the team of the acquired business with our staff, the more the cultural process will move forward positively. They will discover very quickly that the individuals on our team have the same background and generally the same philosophies of the business that they have.
• People. The biggest concern we see at the time of acquisition is a concern on the part of the acquired company’s staff about their personal situation. Do they have a job? Will their pay, benefits, vacation and job responsibilities be the same? What is going to happen to them with this change? These topics are the primary focus of our initial meetings with the team. We provide assurances that they are valued. Their position is continuing. Their pay, benefits, vacation days and seniority will all continue as they join our company. If an employee’s responsibilities are going to change, we spend time working with them to determine how to utilize all they have to offer fully. We are very proud that one year after our acquisitions, generally over 95% of the staff of the acquired company stay with us.
• Processes. The biggest change that takes place in our acquisitions is process change. We run all our operations with one ERP, CRM, phone system, field service management system and common workflow management systems to support our sales efforts. We transitioned acquired businesses from whatever their systems were to our business systems on closing. This change generally means that every system they use becomes obsolete at closing. It is the same as simultaneously changing your ERP, CRM, phone system and other business processes. It is challenging, but if we provide sufficient support in the first six months, the acquired business will operate on our systems and be self-sustaining with our corporate staff’s guidance.
• Products and services. We introduce our product and service offerings to the acquired business early. We may eliminate suppliers they have and transition them over to our products. This change is done with meetings, discussions and training to ensure a smooth transition.
TMJ: What are a few strategies to help two different company cultures blend seamlessly after an acquisition or merger?
Weidmann: Our strategy to blend the companies necessarily addresses all the issues identified in response to the prior question. The integration of two businesses and the harmonization of culture is all about the people. People want to feel they are part of the new business, that their expertise and services are highly valued and that their voice will be heard. To successfully change the organizational design, processes and products and services, you must communicate and train the individuals to be fully competent on the new processes. They must be introduced to and work with individuals from our business so that they know who to call when they have a question. They need to know there is a support system they can reach out to at any time and feel valued as the training process evolves. To accomplish this, we use some of the following techniques.
• Communication. We will meet with the entire staff and assure them their positions are safe and their pay and benefits will be the same or better. We offer access to discuss individual concerns on how the transition will affect them personally. I establish a personal relationship with the former owner of the selling business. We keep the former owner on staff for as long as they wish to stay. The former owner becomes our eyes and ears to the transition. Employees will go to their former owners before the new owners. Through the relationship with the former owner, we can determine if issues need addressing, and if they do, we do so immediately. Nothing is worse than allowing a negative perception to persist. Our leadership team will visit the acquired business regularly after the acquisition to assist, identify issues and take actions to assist in the integration.
• Mentoring. Immediately following closing, a team of experts from each department meets, trains and supports the individuals in the acquired business. They build relationships that connect the new team member to the broader whole. There are individuals from the regional operations and corporate operations they just joined. We want a personal relationship that will provide a supportive, friendly interface to manage the transition.
• Training. Over the following months, we have our teams mentor the new employees to ensure everyone is on the same page. This is done with the assistance of our software-based standard operating procedure system. The culture is built by our people working with the new people from the acquired team. Cultural assimilation will occur naturally, and strong relationships will be established with our team if they are properly supported. Culture cannot be taught; it must be experienced.
TMJ: What encouragement can you give managers experiencing growing pains or conflict following the joining of company cultures?
Weidmann: A culture is built and sustained daily by the leaders and employees of a business who demonstrate common values and behaviors in how they interact with each other, customers and suppliers. Values are built over time and must be nurtured and sustained by a company’s leadership. Every new employee is joining the culture without prior experience to understand what it means and how it affects the relationships and actions of the team.
Existing team members will pass along the company’s culture by embracing and supporting new team members. The new employees’ leader or manager should model and lead based on the organization’s cultural values. An acquisition is unique in that at the time of the acquisition, an entire business operation is essentially hired simultaneously. Cultural assimilation across an entire business operating unit requires the acquired business’s leaders, managers and team members to experience the acquired business’s cultural values.
This assimilation can only happen if the acquired and acquired businesses’s interactions are managed consistently with the cultural values. The way the assimilation takes place is experience-based. Each customer or staff issue that arises after an acquisition will be managed under the cultural norms of the acquiring business. If it is managed well, assimilation of cultural norms will come with each interaction. Some examples are below:
• We provide flexibility to our team members when they have family situations that require support and time. If the issues arise, we conform to that cultural norm, and the team member and the manager at the acquired business will see the expectations on how we treat employees.
• We honor the seniority of the employees from an acquired business the same as those who have worked for us for the same number of years. The message is simple. You are part of the team. You have been part of the team since you joined the company we acquired. We hold your experience in high regard and want you to continue your seniority in our company.
• We acquired a business with a used truck process faster and better than our own. We listened and modified our processes to incorporate the value of the process of the acquired business. It made our business better. Every business employee saw that we value their opinion, are open to change and want them to tell us what we can do better.
Culture is based on behaviors that exhibit your values over time. Everything we do after we acquire a business will communicate our culture. It will take time. It will take consistency. It requires patience. Celebrate your wins. Learn from your losses. Hold yourself and your team accountable to your values. Employees should be able to come to their manager and express concern if the company’s values are not being honored.
TMJ: Is there anything else you would like to add?
Weidmann: There is no magic. There is no silver bullet. Culture is about relationships handled in a consistent way modeled in every behavior of the team and leadership. Cultural assimilation is guaranteed if you over-communicate and stay true to your values.