4 Stages of Culture Integration
Change is scary. Whether you’re moving to a new area, starting a new job, or simply taking on more responsibilities. Just like people, companies experience change in a similar way. The only difference is that companies hold a heavier burden because so many lives are affected by a single decision.
You’ve probably heard of Elizabeth Kubler-Ross’ “five stages of grief”: denial, anger, bargaining, depression and acceptance. Kubler-Ross’ model illustrates the emotional stages people go through during times of change. This same idea can be used to describe the progress organizations go through when implementing changes, which we call the change curve. Especially with 44,000 merger and acquisition (M&A) transactions worldwide in 2015, it’s important that companies are able to provide support for their employees and help everyone through these changes. Failing to do so will result in the loss of employees, revenue, and perhaps, even your company.
It goes without saying that during an M&A integration, there are a lot of things changing within a company. Regardless of how similar the two merging organizations are, their individual cultures are something that cannot be mimicked. With one culture’s domination over the other, there’s bound to be some kind of hesitation when it comes to accepting these new changes.
So, what can you do to help your company make this transition smoother? We’ve listed below the four stages of the change curve and provided some suggestions that will help your company succeed.
Stage 1: Shock and Denial
During Stage 1 of the change curve, the reality of things changing kicks in. Performance tends to decrease during this phase because people are concerned about the changes that are going to be implemented. For this reason, they tend to become distracted and are unable to focus on their tasks.
Communication is crucial during this phase. People want to know how these changes are going to affect them and are in need of assurance. Because of this, it is extremely important that employees have a place or someone they can go to in order to get answers. If these questions aren’t answered, or if employees don’t feel supported through this transition period, things can turn south very quickly.
Stage 2: Anger and Fear
During Stage 2, fear and anger usually come into play. This is because they understand that the changes aren’t going away. Due to the uncertainty of the situation, or their anxiety about the changes, employees may lash out because they don’t know what else to do. At this stage, performance typically reaches its lowest point.
This is the stage where companies lose the most profit.
Listening to employee concerns at this point is extremely important. Your employees are looking for a way to express their frustrations with the situation. Some of them are afraid about possibly losing their position, gaining more responsibilities or simply having to adapt to a new work environment. Remind them that you’re all in this together, and you’re willing to help them through this transition.
You should also give them time to accept the changes. People are creatures of habit, and to throw people out of their routine can feel chaotic. So, be understanding and allow people to ask questions and voice their concerns.
Stage 3: Acceptance
In the third stage, people begin to adapt to the changes. Employees shift their focus from the losses they’ve sustained and focus more on current goals and the future. They begin to gain an understanding of the changes and feel comfortable getting involved with the organization once again.
Typically, in this stage, productivity also begins to slowly rise again.
In order to encourage this positivity to continue, reinforce goals and make people truly believe in the company again. Obtain feedback from your employees in order to solve any lingering conflicts before the new culture settles in. This is where your foundation is formed.
Stage 4: Rebuilding and Commitment
In the final stage, your company has emerged from all the changes and employees are now committed to the changes. While normality has been established within the company, you really start to see the profits and a developed culture during this phase. Productivity tends to increase or at least remain consistent by this point.
As illustrated, organizations change a lot when it comes to an M&A. While change in general is scary for an individual, change within a company creates even more pressure because other people’s lives are being affected. Because of this, it is crucial that you understand the change curve, how it will affect your organization, and how to make this transition smooth for everyone during an M&A.