Challenges accompany any merger or acquisition; there’s no getting around it. While the process is often frustrating for both parties involved, bridging the mind-gap between the companies is definitely achievable.
Expressing interest in the cultural aspects of an acquired company is a great way to establish respect and compliance among new employees. In fact, forming connections early on may ultimately determine the overall success of the merger.
Trailer Bridge President and CEO Mitch Luciano outlined the best practices for streamlining the merger and acquisition process with Emily Szink, FreightWaves’ Executive Vice President of Content, on this episode of M&A Update presented by Trailer Bridge.
First and foremost, Luciano urges buyer companies not to consider mergers simply from a financial standpoint. He asserted that 80% of mergers and acquisitions fall through due to failed expectations and declines in post-acquisition revenue.
“Yes, the finances get you results, but what drives those results? It’s simple – it’s employees’ attitudes and work ethic,” Luciano said.
He further explained that although conducting preliminary due diligence of a company’s finances, employee roster and customer base is important, taking time to consider the viewpoints of the acquired company is critical to ensure the success of a merger; it’s often a step most companies fail to perform.
It is not that acquiring companies disregard cultural exchange; the problem is they try to force their culture upon the company just acquired.
“Both companies have separate cultures. Typically, the acquiring company tries to force its culture on the other instead of merging the two together,” Luciano said. “There’s a way that you can look at both cultures, listen to each side and essentially create a new culture that allows both sides to thrive.”
Luciano suggested that simply lending an ear will strongly persuade workforces to adopt a company’s culture. The last thing that new employees want is to be given a handbook and a handshake without establishing mutual understanding.
“You have to make sure that you understand what their day-to-day operations are like so that when you integrate, you’re not shocking the system,” Luciano said. “Ask and listen for what they like and dislike about their current company. Figure out their main concerns so your team can improve those aspects to win them over.”
Even if your company does employ these methods, you shouldn’t expect the merger to happen any faster. In fact, successful integrations can take as little as three to six months to as much as two to three years to accomplish depending on the state of the company, Luciano explained.
Trailer Bridge considers cultural exchange its specialty. With each acquisition, Luciano detailed the company’s efforts to learn each other’s history. Newly acquired workforces are introduced to Trailer Bridge through an extensive six to eight month leadership development program as a means to establish an impression of what the company strives to achieve.
Trailer Bridge specializes in asset-based logistics providing ocean carriage, integrated logistics and trucking for the U.S., México, Puerto Rico, the Dominican Republic and the Virgin Islands. Its diverse workforce challenges the company to keep an ever-open mindset to new ideas and perspectives, thus creating an engaging environment for new individuals.
“We don’t just want to teach but show them what it means to be at Trailer Bridge,” Luciano said. “Companies need to do more of that. What’s the real meaning behind your organization? Not just your mission statement or company vision, but what are you truly standing for?