I wrote last month about three things to consider when contemplating a merger or acquisition. Let’s assume you’ve done your homework. The math makes sense. You’ve got the right team in place and you have a business plan for moving forward.
Have you considered the human aspect? While your decisions may center on sound financial projections, the personal element is equally important in paving a smooth path to a successful future together.
Oftentimes, the profitability of the M&A is predicated by the successes at the earliest outset of the relationship. While we understand it boils down to culture, the word culture is tricky for us because we must consider multiple parties—the principals of the deal, leadership, staff, agents and potentially ancillary services.
It’s all about the people. How do they work together? Are their goals aligned? Is there a healthy mix of thinkers and doers? Are they respected by their peers?
Assuming both parties believe there’s a fit, there must be an understanding that when the two groups come together, a new culture will form. Therefore, creating the basis for that culture is critical at the outset of the process and throughout the onboarding and transition.
Here are five tactics you can use during and after a merger or acquisition to ensure a seamless transition:
- Develop an integration plan. Establish a leadership team to oversee the integration and assign responsibilities. Prepare communications and talking points about the change with a specific focus on what’s in it for the agent. Troubleshoot potential culture clash areas by proactively planning activities to neutralize these obstacles and ensure a smooth integration.
- Lead and communicate effectively. Be open about what will change and what will stay the same. Organizational change is hard, even if it’s positive. Given that many deals of this nature are confidential until the announcement, most people will be surprised, and almost all will have questions about their future. There is no such thing as over-communicating during a time of organizational change.
- Have an open-door policy. Let people voice their opinions and concerns. The simple act of listening will go a long way. Feedback from the new team may also support a positive integration, mainly if leadership is open to new ideas.
- Focus on retention. The 2019 National Association of Realtors® Member Profile indicated that of the Realtors who worked for a firm that was bought or merged, 76% remained—a solid majority. My personal experience is that the lack of an organized integration plan tends to be the most significant contributor to breakage. The acquired agents were at their brokerage because of a personal connection they felt to the company and the owner. If they’re going to stay with your company post-closing, the personal connection to you and your company needs to be established immediately.
- Be open to creating a new, combined culture. Businesses are always evolving, so what better time to reinvent the company through the lens of a powerful business relationship that brings value to the company and the community.
Mergers and acquisitions can be effective for profitable growth. Like anything rewarding, it requires time, effort, money and practice to be successful. Having a sound plan that considers all of the factors—including the human element—is key to success.
Rich DeNicola is the Chief Operating Officer for Realogy Expansion Brands—Better Homes and Gardens® Real Estate and ERA® Real Estate.