The Keys to Building a Sustainable Culture During an Integration

A CEO has many things to consider when his or her organization is undergoing a combination, from due diligence activities to integration efforts and stakeholder response. One thing that the CEO of Velera—the new company that emerged in early 2024 from the combination of the two largest CUSOs in the U.S.—made clear is that culture would be one of the top reasons for the combined organization’s success, and that we need to get it right. 

Culture is how employees experience the organization daily based on its values, norms, rituals and ways of working. In other words, it’s all the things that influence employee behavior and shape how work gets done within the business. 

For Velera to have the culture its executive leadership team desired, the team needed to be intentional, thoughtful and proactive. In fact, data shows that being intentional about building culture and allocating resources to those efforts has an impact on the organization’s ability to achieve the overall goals of the deal. According to Gartner, 75% of successful acquisitions focus on culture. The same study reports that getting the culture right during mergers and combinations can impact business performance against revenue goals by 9%, employee performance by 22% and reputation outcomes by 16%. It can also be linked to talent attraction and employee engagement. 

Furthermore, organizations that focus on organizational health as elements of culture can adapt to the present, shape the future and, ultimately, perform better than their counterparts that do not. McKinsey’s Organizational Health Index (OHI) continues to show, for instance, that over the long term, healthy organizations deliver three times the total shareholder returns (TSR) of unhealthy organizations.

Steps to Creating an Aspirational Culture

With culture a top priority following the initial combination announcement, Velera began executing against a plan to build toward its aspirational culture. It made a bold move by appointing a Chief Culture Officer and stood up a culture workstream within the Integration Management Office (IMO). Although a comprehensive plan was thoughtfully crafted, Velera adjusted along the way to maximize the potential returns on specific culture projects, while also keeping in mind the timing of other integration activities and organizational capacity for change.

An organization that is contemplating a merger or combination should consider the following steps that Velera has taken to contribute toward its success in building culture:

1.    Make culture a priority. Assign a dedicated team within the integration effort to define and drive culture, as well as address acute concerns in the business. Also, within the integration efforts, identify support teams within Communications, Organizational Change Management, IT and HR to ensure alignment of integration programs and messaging with the desired culture. 

2.    Undergo a rigorous discovery phase. Be curious, inclusive and open-minded as you dig into the details to understand both legacy organizations’ cultures and where you want your new company’s culture to exist and thrive. It’s advantageous if these discovery efforts can start before Day 1 by assessing potential cultural alignment. Include a cross-representation of leaders and employees from the former organizations to identify cultural similarities and differences. Focusing on sustaining or building critical management practices while having awareness of potential friction points enable the new organization to be in a proactive state. 

3.    Establish guiding principles, core values and a culture north star. Velera established a set of guiding principles immediately after the deal was signed, encouraging integration functional teams and leaders to work as one team, cultivate trust, be open and curious, and deliver clear and consistent feedback. From there, Velera’s new core values were established using an inclusive process that leveraged surveys and focus groups and ended with executive team endorsement. Finally, the culture north star was built on the early set of guiding principles, providing leaders and employees with specific information on cultural attributes and how they can be operationalized within business practices. This aids in understanding the “why” behind the cultural shifts and how leaders can model and reinforce the supporting behaviors, which is a critical step in the culture journey. 

4.    Collect feedback often. Employee engagement, integration sentiment and business transformation pulse surveys are effective tools to establish a baseline and monitor progress. Leveraging existing resources throughout the business, such as HR Business Partners and employee resource groups, as listening posts to gather opinions can serve as invaluable feedback channels that can surface positive traction and acute concerns. 

Key Takeaways

Culture is too important to leave unguided and evolve organically on its own. The risk of an organization ending up with the culture they don’t want, or many competing and misaligned subcultures, is high when left unchecked. To establish the aspirational culture your new organization desires, keep in mind the following: 

1. Start early – Begin culture work as early in the due diligence process as you can!
2. Be intentional – Identify the new organization’s aspirational culture and make a plan to achieve it. 
3. Stick with it – Building your desired culture is a marathon, not a sprint. It will take time and effort.
4. Celebrate – Highlight the wins along the way through recognition and rewards, reminding leaders and employees of the company values, guiding principles and culture north star to reinforce the culture you are building.
5. Share the responsibility – Leaders and employees across the organization are “keepers of the culture.” Be sure to remind them that they are all important members of the journey to shape cultural success!

Michael Summers, has served as executive vice president, chief culture officer at Velera since March 2024. In this role, he plays a pivotal role in shaping and sustaining the combined organization’s culture to support employees alongside the company’s key initiatives and core business strategy. Summers is responsible for leading the company’s learning and organizational development, continuous improvement, facilities and real estate, industry engagement, and diversity, equity and inclusion (DEI) and employee experience teams.