CHAPTER 
Resilience Rx: Merger and Acquisition Adventures
Our client had acquired three competitors, tripled their headcount, and quintupled their revenue in a four-year period. Revenue had surged from $50 million to $250 million as they moved rapidly through two key inflection points (each inflection point resulted in essentially an entirely new company).
Though mergers and acquisitions (M&A) are an exciting and powerful path to rapid growth, they often bring tremendous stress, leading to Critter State behavior.
ASSESS: WHAT WE FOUND
The amount of change from the acquisitions had hurt employee retention due to three competing cultures. One culture was very conservative (ties every day in every role), one culture was very laid back (jeans, flip-flops, T-shirts), and one culture was middle of the road, like the parent company.
Since the cultures hadn’t been integrated into a single cohesive one, silos had formed, slowing effective information flow and decision-making. And trust was low as a result. Now that the basic integration was done, it was essential to ask, “Who are we going to be together? What is our tribal identity?” It was time to create trust and tribe.
Lack of trust creates an environment where concerns quickly evolve into fears. And when fears collide with a belief that the system is failing or that one doesn’t and never will belong, trouble results. As distrust and fear increase, the negative impact on employee morale, engagement, and performance accelerates. The end results are disengaged employees, frustrated management, and lower profits. And the problem comes from four key emotional experiences:
1. A sense of injustice: The experience of unfairness tamps down the insula, the part of the brain responsible for emotional hurt and intuition. If a person is experiencing unfairness, he or she will spend more time in Critter State, which will adversely affect performance, decision-making, collaboration, and overall peace and happiness.
2. Lack of hope: The experience of hopelessness is even more painful than unfairness, and it’s below the Critter State on the emotional range. In neurolinguistics, the states of hopelessness, helplessness, worthlessness, and grief or terror are considered Baseline States. It doesn’t get more painful than this.
3. Lack of confidence: Depending on the person and the degree of lack of confidence, we’ll likely see procrastination, reluctance to take risks, “playing small,” and yes, more Critter State.
4. Desire for change: The desire for change is encouraging because it means there’s some energy here. Desire for change means we can envision a possible future where things are better. This lights up the ventral striatum, where we anticipate reward. If we can increase this experience, we can get into Smart State.
ACT: WHAT WE DID
In this case, we had to release resistance (Chapter 3), make new meaning, establish a new identity (Chapter 5), and enroll and engage (Chapter 7).
First, we did an SBM Index (Chapter 7) to gauge how everyone felt and determine what they needed most. We found that people really wanted belonging (no surprise), and we did culture coaching for a year to create the cultural rituals to help people come together.
The new leadership team then did a roadshow to all sites to make people feel that “everyone is in it together” and to make clear that no single site was better than others. The main communication: “You are safe here, we are all in this together, and everybody matters.”
We also had to acknowledge the grieving. After all, some well-loved employees had lost their jobs. You can’t have two HR departments and two finance divisions. Some product lines and service offerings were cut as well because they weren’t profitable or relevant to the new entity. So we designed parting rituals to process the grieving and to acknowledge and appreciate the parting people’s contributions.
In parallel, we held a two-day leadership retreat to bring the leaders of the four companies together. Everyone took our Leadership Assessment (www.SmartTribesInstitute.com/lead) in advance so we could identify the Present State of the leadership team as well as what their top challenges were. We continued these retreats over the next three years as the organization continued to expand and acquire. We looped in the next level of leadership and held our four standard neuroscience trainings: leadership, influence, optimum teams, and navigating change. And we did a leadership development program for the highest potential leaders so we’d be ready when our client acquired the next few companies in their sights.
Together we forged a new vision and set of company values (and a new dress code: business casual). Here’s the difference between mission, vision, and values:
• A mission is a long-term proposition that doesn’t change. It answers the questions, “Why are we here as an organization?” “Why do we exist?” “What are we going to make happen because we exist?”
• A vision is aspirational—that is, it’s a picture of what you want as an organization or as an individual, as far out on the horizon as you can see. Your vision can be three to five years into the future or even longer. What’s the clear future you see for the organization? What do you want your world to be like, or what do you want to have achieved in the future?
• Values are what you honor and believe in, which will govern how you will behave as you fulfill your mission and create your vision. Values determine standards of behavior—that is, the code of conduct that you will not compromise.
We also made sure to set up diverse cross-functional teams for all new initiatives: cultural, sales, marketing, and operational. In a nutshell, we created more collaboration, communication, transparency, and mutual respect. Everyone owned the shared responsibility of rebuilding trust. They were in it together.
Because building sustainable trust was key, it meant taking employee engagement and empowerment to a new level, and it meant ensuring that leadership was engaged and empowered too. Engagement and motivation happen when people solve their own problems and create their own aspirations and expectations. That’s why boosting communication via the Outcome Frame (Chapter 6) and the Feedback Frame (Chapter 9) is so powerful. Additionally, it was essential to do the following:
• Use inquiry over advocacy. Ask questions rather than give orders and use the Outcome Frame for deep insight and clarity creation.
• Hold team strategy and problem-solving meetings at every level. Meet to do the work, not to talk about the work (see PowerYourTribe.com for a valuable communication and meeting types resource).
• Have team members create their own goals and action plans.
• Add empowerment to engagement. When we did this, we witnessed even more profound results. The leaders learned that they could heal and prevent significant distrust by first understanding what a person was experiencing and then intentionally helping him or her shift into engagement and empowerment. The tools and methods we used included the Logical Levels of Change (Chapter 1); the Resilience Cycle (Part II); VAK Anchoring (Chapter 6); the SBM Behavior Decoder (Chapter 7); SBM Communication (Chapter 7); Meta Programs (Chapter 7); Organismic Rights (Chapter 4); Energetic Weight (Chapter 9); Myelination (Chapter 9); Neuro Storytelling (Chapter 5); Reframing (Chapter 5); and the Distorted Thinking Decoder (Chapter 5).
When we give people what they crave (more safety, belonging, and mattering), their critter brains calm down, and we can guide them into their Smart State.
ROI: HOW THE ORGANIZATION BENEFITED
Within the first year of working together, the organization improved from 85 percent retention to 90 percent. Starting in the second year to date, the organization enjoyed 95 percent retention. People loved working there!
Our client successfully navigated the “people” work they had overlooked while zooming through two inflection points. That was all put in place during our first year together. Over the next three years, our client’s growth surged from $250 million to $400 million.
The best part is, when you walk through the organization now, you see leaderboards tracking results, feel the enthusiasm and connection among this ever-expanding tribe, and hear people saying encouraging upbeat messages; they collaborate, joke with one another, and pat one another on the back.
1. Growth can be threatening. Although profits and company size may increase, it can induce great internal stresses, putting safety, belonging, and mattering at risk.
2. When a company moves through an inflection point, it is effectively a new company, and its DNA must be redefined and reformed from the inside out.
3. The Resilience Cycle shows us how we can build solo resilience and tribal resilience so that the individuals’ needs and the tribe’s needs are met.
4. When key staff are lost, grieving occurs. This must be consented to, included, and catered to—otherwise it manifests as resistance to change.
5. To influence a company to create a better future, everyone’s contributions (past and present) must be properly included and appreciated.
• A lack of trust creates an environment where concerns quickly evolve into fears.
• When fears collide with a belief that the system is failing or that one doesn’t and never will belong, trouble results.
• Having a desire for change means we can envision a possible future where things are better.
• Engagement and motivation happen when people solve their own problems and when they create their own aspirations and expectations.
• Use inquiry over advocacy: ask questions rather than give orders, and use the Outcome Frame for deep insight and clarity creation.
See this chapter’s section on www.PowerYourTribe.com for the following:
• Communication and Meeting Types Resource: Unpack and optimize how your team communicates.
• Revenue Inflection Point Chart: The Key Components to Ensure That Your Organization Moves to, and Through, Key Revenue Growth Milestones
• Defining Personal Values kit