Updated: Feb 20, 2022
Safety Cultures Should Get Going at Acquisition
Acquiring a new property or business for your company can be a very exiting and stressful thing. The business or property is acquired to bring some benefit to the company. After all, if that isn’t the case, why do it? When it comes to safety, the early stages of due diligence and purchase present a time where two safety cultures meet up. It requires the purchasing company to get going at the beginning in putting forth and enforcing it’s safety culture for it to take root.
That said, there is a big potential problem that the the purchasing company may not have considered. How do their official and practical stances compare? A company will pass on it’s own culture. It will also potentially taken on traits of the culture for the acquired property. It’s for this reason that practical and official stances closely align.
Just This Once, Put Production On The Back Burner
There’s a saying that people can’t serve two masters. I’ve said it before, and I’ll say it again. Safety is not the number one priority of a company. That said, it’s a particularly unique time when a company is freshly purchased. During this time, it’s strongly recommended to have a much greater focus on health and safety. It’s likely that the company was inspected for a wide range of things, such as financials, staffing, production, and safety. It’s likely that the company’s inspection team found some substantial problems requiring attention.
Now, even though safety is not the top priority overall, it is integral to a company operating profitably. Not tending to safety can cost a lot after all. You may not like it, but there are OSHA regulations and an act based on occupational safety for a reason. People have been hurt and equipment damaged, costing a substantial sum to companies and industry at large. Taking care of safety early on allows for the acquired company to start on the right foot, managing itself so that it properly minimized costs and risks.
Safety Culture, not Safety Cultures
The goal is to have one company safety culture. Too often, failure to properly integrate an acquired company causes there to be conflicting cultures. One thing you don’t want is to properly training employees at the new acquisition, and then not provide sufficient oversight to ensure things are done correctly. Remember those issues you likely found as part of the due diligence process? If those were issues before the company was purchased, why do you think they wouldn’t still be issues? To ensure that issues are taken care of, an honest assessment of any retained management. This is a major decision on it’s own, regarding which levels of management, if any, to keep.
Now, I am not saying the acquired company’s management was bad, necessarily. I’m also not saying that any of the people potentially retained in an acquisition are bad people. However, any management, and that goes for executives on down to maybe plant managers, are probably used to running things a certain way. Probably their way. However, that management group will have a lot of knowledge that can be a huge boon to the acquiring company.
But, I’d say that if your company decides to keep much of the previous management, it treats them more like consultants. They shouldn’t have any direct authority to make things happen. The issues the purchasing company found were found under the previous management. Not all of it may truly be their fault. None the less, it was not taken care of by them. So, why assume that if you put them in charge of fixing those issues they won’t just do something else?
See why it probably makes more sense to have them in a consulting or advisory capacity? The purchasing company would want it’s own employees to handle these things. This is especially if they already have a known track record of identifying and solving problems.
General Outline to Get Going on Changing Culture
Here is a cheat sheet of sorts to help with the process of changing culture at acquisition. Bear in mind that this cheat sheet can help get the ball rolling, the culture change process is quite complex. So don’t think that this is exhaustive or all encompassing.
The purchasing company should give employees not part of the acquired company sole decision making power.
Keep retained management in a consulting or advisory capacity.Do this at least at first and for a while.
You can always re-evaluate later.
Make a priority list of issues to fix.Use the audit or investigation findings done before and after purchase,
It’s very important to figure out the needed funds and resources to fix the issues on this list.
Keep things practical but remember that there are regulatory requirements.The Occupational Safety and Health Administration, or OSHA, is a major regulatory body for workplace safety.
Set a timetable for implementing integration with the acquired company. On this timetable will be things like training, fixing issues, and supplying employees with needed tools and resources.
This will include any planned production downtime as well as ramp up.
Diminish production requirements to the greatest feasible extent.If the acquired staff have to learn the correct, compliant ways to perform tasks, it will be very hard to do so while having to product normally.
Consider supplementing production, where possible, with existing operations from the purchasing company.
Keep this to a planned, limited duration.
Evaluate that the acquired company employees have been set up for success. If they have been, keep to the time table. If not, consider adjustments as needed.
It’s critical to enforce training and policy requirements. They can’t be effective otherwise.
Remember to Learn from the Acquired Company
It’s true that you know how you want things done. But leave yourself open to the possibility that the acquired company may have done many things right! Don’t just focus on the issues. Focus on the successes. There was a reason it was considered a beneficial purchase. There may be room for adapting the good things about an acquisition to make the whole company stronger for it. Even so, a purchasing company will do well to keep an eye on things to make sure their interests are met. Be open to learn, while being aware of potential pitfalls. Don’t forget to adapt the cheat sheet to your specific situation. Every acquisition and company is at least a little different.