Integrating Merged Cultures
Challenge: The leadership of two regional utility companies, as part of their merger & acquisition transition planning recognized the need to develop a set of new Leadership Competencies. They wanted these competencies to reflect and honor the organizational strengths of each of the merged utilities as well as to include competencies that would allow leaders to successfully guide the new company in the more competitive, de-regulated business environment of the future. The acquiring company also wanted to position the merger as not a “win/lose” situation to employees, but the best decision for the survival of both companies.
Solution: Separate culture assessments were conducted of Utility A and Utility B, and each utility’s leadership team analyzed how their organizational culture helped or hindered the agreed upon strategic direction of the new combined company. In a joint Aligning Culture with Business session, both teams openly discussed their own utility’s culture and their merger partner’s. As would be expected with two organizations in the same industry, there were similarities and differences in their fundamental cultural assumptions for success, as noted below.
| Strategic | Operational | Governance | |
| Utility A | Use technological solutions to meet business challenges | Focus on measuring outcomes & individual tasks | Top-down decision-making |
| Utility B | Work relationships with customers & communities to meet business challenges | Focus on process & teamwork | Top-down decision-making |
The leadership teams committed to modify the current top-down decision-making approach shared by both utilities by clearly identifying where that approach was a requirement and where including employee input would bring better decisions for the business. There was also recognition that the acquiring Utility A’s focus on technology as its strategic driver for success would need to be supplemented by a stronger focus on listening to customer and community needs.
A set of Leadership Competencies was developed for the new company that integrated the cultural strengths of the merged utilities and focused on additional competencies for managing change and developing talent. The Leadership Competencies were translated into behaviors that appropriately applied to all levels of employees, and follow-up education and training programs were developed.
Results: The development of the Leadership Competencies and the frequent communications to employees of progress in the 1-year merger & acquisition transition planning process gave employees concrete information on expectations for continued employment in the new company. It helped to alleviate some employee anxiety about their future and presented a collaborative and positive direction for the merger. In order to reinforce the importance of the competencies and to start practical application, the executive team of the new company participated in the first Leadership Competency education session within the first month after the merger was legally completed.