Culture is critical to successful M&A: Kelly McFadden, Automic Group

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Identifying key success factors.

Share registry Automic Group is in the process of transforming from an entrepreneurial, founder-led start-up to a disciplined growth organisation under the leadership of a new CEO, Andrew Wilson. 

Culture is critical to successful M&A: Kelly McFadden, Automic Group

According to Kelly McFadden, chief people officer at Automic Group, “As we morph from one organisational lifecycle phase to another, the challenge is being able to harness the cultural attributes that have been key to our success to date, such as agility, and evolve them in such a way that they continue to serve as a competitive advantage for us as we grow.”

McFadden said the company expects its growth over the next few years to be both organic and inorganic. “We have recently acquired Market Eye, a leading investor relations business, and we have been focussed on integrating the team into the broader Automic Group.”

Managing the people and culture aspects of a merger are critical to success. We asked McFadden to describe what it takes from a people perspective to successfully manage an M&A.
 
“There are many checklists available to assist in managing the operational HR aspects of an M&A and the integration. However, those checklists are ineffective if there is an incongruence between the culture of the two organisations.”

Cultural fit is the key to success she told Digital Nation Australia.
 
“Assessing the culture must start from the time the M&A candidate is identified that is, long before the deal is made, it must continue through the due diligence process and be the key consideration in how the integration will occur.”

McFadden outlined what she sees as some of the key success factors including:

  • The early engagement of leaders, subject matter experts and culture champions in shaping and driving the integration;
  • Being open to bringing together the best of both worlds during the harmonisation process;
  • Communicating what the integration journey will look like as well as the progress;
  • Ensuring there are multiple touch points or feedback loops to check that the change is resulting in the intended outcomes. 

Risks

“The biggest barrier to realising the true value of an M&A deal is cultural misalignment. Culture must be a key component of the M&A strategy alongside the financial returns. Decision-makers need to be very clear about the criteria for the identification of M&A candidates and the assessment of cultural fit.”

More importantly, she said leaders must have the courage of conviction to turn down a deal opportunity if the cultural fit is not right.

“Assessing culture, both the formal and informal, early on in the due diligence process is critical. This should include quantitative and qualitative measures such as engagement survey results and cultural interviews with key executives.”

According to McFadden, “The stronger the cultural alignment between the two organisations, the faster the integration and assimilation of the new organisation is which means the true value of the deal can be realised sooner.”

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