Audio:                   Welcome to AEC Marketing for Principals, brought to you by Smartegies, where we help design and construction firms navigate sales and leverage marketing to win more projects. Here are your hosts, Katie Cash and Judy Sparks.

Katie Cash:                    Hi, everyone. Thanks for tuning in today. Today we're talking with Donya Edler, who is the new executive vice president here at Smartegies. She happens to be my boss as well. But Donya brings over 25 years of professional marketing communications and human resources experience in both the public and private sectors. Her focused expertise around mergers, acquisitions, strategic market planning, brand management, business development, and internal and external communication is going to be so instrumental here at Smartegies to the growth and prosperity of the agency, really focusing on business, clients, and culture. And with that, let's dive into getting to know a little bit more about you, Donya, and your history, and let's dive into your expertise around mergers and acquisitions.

Donya Edler:                 Yeah, sure. Well, it is definitely true that the mergers and acquisitions isn't going away in our space. I was just looking at a report not too long ago that said it was almost $4.7 trillion of global mergers and acquisitions last year. So it's definitely here to stay, and companies do it for various reasons. It's either to just have access to new markets or new sectors or to acquire new technologies. And in many cases, certainly with the ones I've been involved in, it's just to get a bigger footprint and to have a global scale or a global presence. So throughout my career, I've been involved... I was just counting. It's actually been five various mergers, acquisitions, or JVs.

Donya Edler:                 And as you said, Katie, I've been on both sides of it. I've been on the side where I was with the acquiring firm. I knew it was coming. I signed non-disclosures and was just very integral in part of the rollout of it. And then I've been on the other side too where I never saw it coming. I woke up like everybody else, saw an email we'd been acquired, and it was like, "Wow." And then I've also been a part of JVs, which are more like a coming together of equals, equal firms, and you're going back and forth over who's going to do what. But each case is very different. I think there are pluses and minuses to each one, but yeah, it's part of my norm now, part of my new norm.

Judy Sparks:                  So Donya, that has been probably an invaluable experience for you being in all of these different scenarios. And what occurs to me is, as a marketer, you've had to be really adaptable to these circumstances, and I think that... Can you speak to our marketing audience, those who sit in your shoes, what are some of the best practices you've uncovered along the way when you are on both sides of the table? Like, how do you communicate to your counterparts when you are the acquiring firm, and then how have you experienced positive and negative styles as others are communicating with you when you're being acquired?

Donya Edler:                 Well, I really have been heavily involved just in sort of the changing of the culture aspect, and that is a big part of the communication, just changing of the cultures when one firm's acquiring another or vice versa. I'll talk about that just for a little bit because I think it's really important. I think it's underestimated, too, just how valuable that is.

Donya Edler:                 So the culture of two companies coming together, sometimes it's not looked at during the pre-merger acquisition stage, so there isn't a lot of communication. That stage is done under a cloak of secrecy anyway, so it's really only so much that you can say. But the culture really is the soft side of the business, and it's just those unwritten rules. It's how things get done in a business. It's how the leaders lead. It's how decisions are made. It's how we interact with our customers. And all of that is... It's really hard to change, and it's really... It can be a strategic asset how the business operates and how it gets things done because there are lots of companies that can match what you're doing. They can match your services. They can match your products, but it's how you get it done.

Donya Edler:                 So I think some of the best practices, once we know that this merger or acquisition is going to take place, first of all, do recognize that one of the first things you've got to do is look at the employees because the trust is diluted right from the start because so many of them didn't know about it. Morale's dropping. It's a time of just distraction, people worried about who's going to stay, who's going to go. You have people start thinking in terms of them versus us, our company versus their company. So one of the early things that has to happen is a culture-change plan so that you can get all of your people on the same page because how can you service your customers and communicate to them all the great things that are happening if you don't have all of your people on board? So I think that that whole change plan is step number one.

Donya Edler:                 And there's some things that actually go into the change plan. I can talk about that a little bit later on how you do that. But I really think one of the best practices is to take a real hard look at the culture and how you're going to bridge the gaps with the new company.

Judy Sparks:                  I could not agree with you more, Donya. On the consulting side of things, when I see my customers participate in a merger or acquisition, what we think about... In terms of culture, we actually think about and coin as brand living. Even with the absence of a merger or acquisition, we believe that brand living is the most important part of branding. What I mean by brand living is that these are not things that employees are going to intuitively know. These are the intentional ways that a leadership of a company demonstrates how they want their employees to affect the culture, treat one another, treat clients, how they communicate. And it comes from the top down, and I think that it's so often overlooked in a branding process.

Judy Sparks:                  My CEOs are quick to say, "I want us to come up with our story. Why did we merge? Why is it good for our employees? Why is it good for our customers?" And I think that sometimes that happens really late in the process. In fact, a lot of times it happens after the ink is dry, and those conversations really should happen early in the process. So we've been living some of those scenarios daily here at Smartegies with our clients, where during the transaction it's very much a financial conversation. Once the transaction closes, however, it really becomes a people conversation, and so that becomes very important very fast once a transaction occurs.

Judy Sparks:                  We have been in scenarios where the merger or acquisition is very happy news for everybody involved, and it only strengthens the brand. There's been other scenarios where, like you said, it's a bit of a blind side, and we almost have to put on our crisis-communications hat and make sure that we're very intentional about telling the employees and explaining to the employees how things happened. What has been your experience in terms of how employees are willing to receive the leadership commentary, if you will, after the ink has dried?

Donya Edler:                 Yeah, it's... I mean, you hit on some really, really good points. After the ink is dry, especially for those employees of the acquired firm, like I said, there are a lot of mistrusting feelings, if you would. There were relationships prior to the deal where employees felt like they were in the know, and then after the deal, as you said, they didn't see it coming, and so you have this mistrust with executives sometimes. It's like not only are the folks thinking of a them versus us in terms of their company versus the other, but it's the executives versus the frontline management because there are these strong perceptions also that sometimes the executives are the ones who are really getting these great packages, and here we are left. We aren't even sure about our jobs.

Donya Edler:                 So in the beginning... I mean, I'll just reiterate it, as you did. In the beginning, during those pre-merger and acquisition activities, it's so much focus on the financial data, the operations, and revenue synergies. What are those things that we're going to do better or that both companies can do better together than they could if they were not? So I think the very successful mergers and acquisitions will also take a real quick look at the different cultures during the pre-merger stage. The reason that so many of them don't take a look at it is because even if you look at both cultures and you see that they're not compatible or it's going to be really hard to get them aligned, it's not likely that it's going to call off the deal. The deal is probably still going to go through. But I just think it's wise to take a look at it.

Donya Edler:                 But on day one, after the ink has dried, you cannot communicate enough to employees on why we are better together, why we came together, and what the vision is. I think if employees also know that they will be a part of developing the new vision, the new values, the set of behaviors, then they tend to... It seems like you would... You'd be better positioned to have the employees receive some of the newness of the deal a little bit better. But when it comes from on high, say day one, and you flow down, "Okay, this is the new company, and these are our visions and our values, and this is what we expect," that's a little bit... I've been in that situation, too. That's just harder to receive, and I don't think you do the new company justice that way. So making sure you involve everybody in the development of the new company, I think it opens up the reception for what's coming down the road.

Katie Cash:                    So I'm hearing a lot, and I do agree that you want to involve some people, and you definitely... After the ink is dried, it becomes more of a people conversation. In our experience on the consulting side, there's kind of two schools of thought that we've experienced. One is the leadership that has always been very transparent and very accessible to their staff, and they want everybody to be aware along the journey. And Judy and I have experienced how loose lips can get in the media quite quickly about the intent of mergers ahead of time before you want to, and you kind of wind up in this crisis-communications scenario.

Katie Cash:                    But then you've also got the other side that really doesn't want to share any details until everything is said and done and all the packages and everything's tied up neatly. But I do think that a lot of times our clients miss that important piece about integrating the culture and what life after the merger really looks like and how you're going to be able to sell it both internally and externally. You've been through this a few times. How do you go about describing culture and identifying what those gaps might be and which one is going to be the prevailing culture that you want to adopt after the merger? How do you go about that?

Donya Edler:                 Yeah, that's a great question. As I said, early in the process, usually I would recommend a culture team, more or less. There is a team of people that need to lead that effort. And when you define the new culture, one of the first things you do, define that new culture in terms of the behavior, asking, okay, as the new company, what is it that we want to do differently? Yeah, maybe you are looking at taking the best from both companies, but what do we want to do differently?

Donya Edler:                 And the way that you assess the gaps, there are all sorts of techniques. There are employee surveys, where you're reaching out to employees and asking them questions about how they get their work done, how they work with each other, how they interact with clients. One of my favorites is having listening groups, where you're actually talking with groups of people face to face and again asking the same sorts of questions about how they go about their day. Then you've got management interviews, because it's really interesting to see how different management styles can be and how the companies differ in making decisions. So again, these are types of things that identify the gaps.

Donya Edler:                 And then even throwing in there customer interviews, I think, is quite important because, a lot of times, we're not as good as we think we may be. So having that objective view from customers, from each of the companies participate and talk about their experiences can also be very revealing and help you see those blind spots from both companies and help you determine what we want the new company to look like. So those are just some of the ways to identify those gaps, and then you begin the hard work of implementing that plan, how you're going to close them.

Judy Sparks:                  One of the things you said, Donya, made me think that has to be extremely challenging with the scale and size of the companies that you've worked for. But I'm also seeing the same set of challenges even in smaller acquisitions. I think that whether you are a large global company, a publicly-traded company, acquiring another large global company, or you're a mid-size company acquiring a mom-and-pop, the challenges of merging cultures remains the same. And I think that your advice on having a culture team is really important because, at the end of the day, it's really people working with people and being aligned and building trust.

Judy Sparks:                  One of the things we talk about quite a bit in our branding efforts with our clients is that people buy and sell goods and services emotionally. And in our business, externally people are buying and selling emotionally as well, and what they're buying is trust. Which firm do I trust the most? Because, most times, all the firms are equally qualified from a resume standpoint. And our listeners know by now that we truly believe that relationships always play a part, but these days they're playing a smaller part second to the strength of one's brand. So having a trusted brand is really important, and in order to have a trusted brand, you have to have people inside your company that trust in the company, trust what you're doing, and believe in the vision and live the vision every day.

Judy Sparks:                  So I think that... I just wanted to note that we're sitting here talking about one of the largest companies in our industry and the experiences that you've been through. I think very few people could emulate all of the experiences that you've been through, Donya, but I think that a lot of our listeners have been through some sort of merger or acquisition, and many of them have been in smaller environments. But I just want our listeners to know that everything you're talking about, even if you're in a 20-person firm, it still applies.

Donya Edler:                 No, I think you're right. It really doesn't matter the size or scale because the outcome... Like you said, you want to have a successful brand. You want your customers and prospective customers to buy based on that brand. But if the culture inside the organization is not aligned and moving in the right direction internally, how can you sell and position yourself successfully externally? So it's important if you've got five people or if you've got 5,000 or 60,000 or whatever it may be. It's quite important.

Donya Edler:                 I remember I was part of an acquisition also, and this was the tiniest of tiniest acquisitions, where the company was looking to acquire intellectual capacity. We were looking for subject-matter experts so that we could get into a new line of business, and so we acquired a small firm of... It was less than 10 people. It may have been somewhere like five or seven people, but they were the best at what they did. And even with an acquisition that small, it was critical that we got... we understood what their existing culture was and what we were trying to bring them into, so that we could make it as seamless as possible. So we went through some similar exercises, even though it was just a small group, but we wanted them to actually feel at home and be a part of the big organization and continue to do what they did with their subject-matter expertise, but do it in a way that we had established with the larger firm. So yeah, these are lessons that are certainly transferable across sizes of companies, different sizes.

Katie Cash:                    I think the main thing that I kind of want to just pick your brain on, ladies, both of you, is for our listeners out there that might be approaching a merger or acquisition, maybe they are the acquiring firm or the firm looking to be acquired and that's part of their exit strategy, what are some of the top tips or the best practices that you would give them, specifically about how to integrate the culture, specifically about considering that brand living, that value proposition that's going to be living on after the ink is dry, both internally and externally, and how to communicate that? Just kind of share some of those pearls of wisdom, if you could, with everybody.

Judy Sparks:                  Katie, on the consulting side, what we see a lot is that there are not well-defined goals after the merger and acquisition. Again, the process begins in a very transactional way, a financially-based decision-making process. And all of the reasons that Donya named, whether it's to expand your geographic footprint or get into a new subject-matter vertical, are all great reasons. But we are sitting in an economy where we have 96% employment, and we have a real shortage of talent in the design and construction space. So what I'm seeing a lot is the biggest hindrance to growth for our clients is the ability to have the people to do the work. So a lot of what is driving our customers in the acquisition space to acquire smaller companies or merge with equal-sized companies is the ability to have the manpower to do the work, and so again very operationally focused and absent of the people part.

Judy Sparks:                  So I think that my customers, where they... The ones that do it well, where they succeed is they have very defined goals going into the merger and acquisition of explaining why they needed to do this in the first place and explaining to the employees why it's good for them and why it's good for the customer. From that point, I think that Donya is absolutely correct that you have to say now, "That's as far as we've taken it, and now you are going to help us build it from here and be involved in the building of a new culture."

Judy Sparks:                  So I think that one of the mistakes that companies make is when the acquiring firm comes in and says, "We bought you, so you need to become us." Or in contrast to that it's, "We bought you, and together we need to come up with a new us." It's a nuance, but it's so real. Nobody wants to dedicate themselves to a company just to find out that now they have to salute a new flag, and here's the recipe for doing so. They want to feel valued and not just somebody to fill a role, to fill a time sheet. So I think that it's really important that those upfront goals are established and well communicated, and it should start with the why. Why did we do this in the first place? Donya, would you agree with those sentiments?

Donya Edler:                 Absolutely. I agree 100%. Nothing like well-defined goals. I think the most successful experience that I've had being part of a merger or acquisition was with a company that made very much an effort to involve both companies, people from both companies, legacy companies, if you would, in developing the new brand, in developing the vision and the values and the behaviors. And when the work was done, you could have people from all across the organization, from the previous legacy companies, see that they had a fingerprint on that. Yeah, we helped to build this. That, to me, is probably one of the best pieces of advice, is rather than being ready to go on day one and everything's all prescripted in terms of how we're going to look and here are our key messages, take the time to involve both sides in developing it. It just becomes much more sustainable, I think, the work there.

Donya Edler:                 I also recommend dedicating resources to it and invest... Actually, invest in a brand strategy. Invest in a comp... I'm going to give you a plug, Judy. Invest in Smartegies. The experiences that I have, I've been in one where we tried to do it ourselves. We tried to build that new brand and the vision, values, and all ourselves. And then I've been involved where we've made a good-sized investment in a brand-strategy firm that was objective and that helped lead us in all the work that had to be done. So I think it's definitely worth having that firm on board.

Donya Edler:                 Then my third piece of advice is find ways for the employees to, as you said, Judy, live the brand. Find ways for them to actually tell their stories so that they are showing that they're living it. Many companies in the AEC industry say they value safety. That's almost a given now. But how often do you really get employees involved in talking about their stories of safety outside of work? Maybe you start each meeting not necessarily with a safety moment. Maybe you start each meeting with a culture moment that says, "Hey, here's one of our core values, and I just want to give an example of where I saw this the other day at work."

Judy Sparks:                  I love that. I think that is so great when companies can bring culture to the forefront, and it's not just lip service.

Donya Edler:                 Absolutely.

Judy Sparks:                  I think that's just wonderful.

Donya Edler:                 Yeah. One of the companies I was with, we had a huge portion of the workforce that actually is out there in the field doing construction work. So many times we forget to communicate with that important segment of the company because, well, they may not have Wi-Fi or they may not have desktops or whatever, but you've got to find a way to also reach that component and bring them into the loop, bring them into how can they live out the values out there in the field. It's fun work actually. You get to be creative. But you have to be authentic in how you really get people to understand and participate in living what it is that we do on a day-to-day basis at work.

Judy Sparks:                  I'm so glad you said the word authentic because I think the biggest mistake I see when... thank you for the plug, by the way... when they first hire us, if they bring us to the table and they say, "Thank goodness you're here. Now tell me what to say to my employees." That's not the right way to do it. I think the right way to do it is what is the truth and how do you communicate the truth? I think that employees really appreciate authenticity and honesty in these transactions.

Judy Sparks:                  The worst thing you can do is come in on day one and say, "No one's going to lose their job." First of all, most people know that that's highly unlikely. In the history of mergers and acquisitions, there's usually turnover. Either employees leave, or there's duplication in roles. I think that a lot of leaders want to shy away from spreading bad news. I think that you don't want to come in and say, "Everything you've known... Your life, as you know it, is changing." But the truth is, it is. So why don't you focus on the why? Why is it changing? Why is it good for you, and why is it good for our customers, and why is it collectively good for the brand?

Judy Sparks:                  So I think that a lot of companies make mistakes in painting a perfect picture, and it's not perfect. I think that employees who have already been feeling blindsided, a trust has been broken, the worst thing a company can do is sugar coat or misalign the truth just because it's an uncomfortable conversation.

Donya Edler:                 Yeah, absolutely. People, don't underestimate your workforce. They know when you're being sincere and authentic. And it's okay to say if you don't know about something, but what it's not okay to do is to not communicate with folks.

Judy Sparks:                  Right. Yeah, that's exactly right.

Katie Cash:                    Well, ladies, this has been really exciting, sharing your stories from the mergers and acquisitions wars that you have waged over the years. Hopefully, everybody found some helpful tidbits in there. If you are looking for some advice, you want to talk to a veteran, anybody can look Donya up. It's Donya Edler. You can find her on LinkedIn and connect with her. And again, thank you so much for tuning into this episode of the AEC Marketing for Principals podcast. Have a great week.

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