A year ago, you were flying high as your bank completed a successful merger. It wasn’t easy. Months of planning, cross-functional team meetings, data conversions and quality assurance. But you did it.
Still, something’s not right.
Perhaps your new employees have started acting differently—they’ve started calling out of work more often, or their morale isn’t quite where it used to be. Maybe there is a charge of anxiety in the air that is hard to put your finger on, but impossible not to feel. Worst of all, the productivity is only a fraction of what you thought it’d be when you acquired your newest bank. They still talk about the “old way,” the “better” way of doing business.
Why haven’t these newly merged bank employees adopted your culture after the first year?
Culture Transfer Can Kill Merger Potential
Mergers fail for many reasons, but they never reach their fullest potential due to a cultural disconnect. The attention to detail that goes into technical conversions is rarely carried over to cultural considerations. Bank leaders often fail to consider the fullest scope of employees’ reactions and emotions. While it’s true that the purpose of the merger is the bottom line—to become more efficient through a combination of cutting costs and increasing profits—what causes a merger to fail is much more abstract.
Consider a merger from the perspective of an acquired, base-level employee. It’s shrouded in secrecy, discussed in closed-door board rooms and revealed one morning in a company email. What kind of precedent does this set? It’s understandable that employees from the branch to the operations facility might wonder what else could happen. Especially if leadership isn’t reinforcing the strategic direction of the bank well in advance of these “surprises.”
What is victory for the CEO or President is an arranged marriage for many other employees.
Merger Communication is Key to Success
What makes a merger work is often the same thing that makes a good marriage work: communication.
If you don’t keep your employees in the loop, they’ll seek out information on their own through toxic “water cooler” gossip or other undesirable means. Communication has to be free and open, and it must be genuine. It must address employee concerns like layoffs and office policy changes, as well as pensions, compensation and so on. This isn’t just good for employees. You’ll keep top-level talent that is crucial to your success. Make no mistake, uninformed employees get anxious and start seeking other opportunities, because they worry their career progression will stall. Not to mention, they’re good enough to land a comparable job somewhere else.
In many ways, leadership’s concerns are naturally right-brained. Bank leaders are occupied with legal and regulatory conversations, harmonization of expenses and reward structures, how staff will be distributed after restructuring and finding a power balance between the two merger partners. It’s useless to prescribe a way of doing these things that should fit every bank. That magic strategy doesn’t exist.
But what is true of any organization, is that leadership can create almost any type of philosophy or culture they want if they earn their employees’ trust. Employees must feel like bank leaders are in it for all of them, not just themselves. The lower layers of the pyramid can’t feel like the only reason they exist is to prop up the top piece.
All it takes is some basic consideration.
When possible, it’s wise to notify employees of the merger before they read about it in the news. Have a plan for integration, and put those measures in place beforehand. This can take the form of employee-management meetings, an internal merger newsletter or other efforts. Most importantly, enlist your new team members to critique your process before the merger takes place. Get them involved in committees that improve customer experiences online, in the branch and in the back offices. And don’t wait. An engaged employee who feels they are making a difference at day one will not only stick around, but will serve as an ambassador for your culture in new locations.
No matter what you do, some employees will leave—that’s just the fact of the matter. But you’ll lose a lot less human capital if you’re honest, consistent and engaged sooner rather than later.
The efforts you make to communicate with your employees is a direct sign of how much you care about them. Without it, your merger will fail.
Learn how Mabus Agency can help you transform a sleepy culture or deliver a communication plan that empowers employees and customers during a merger. Discover how we help banks.