New research suggests that on-the-job learning is the best way to facilitate knowledge transfer after an acquisition.
When companies merge through acquisition, one of the biggest challenges for both sides is how to trade information.
Nima Amiryany and Jeanne W. Ross detail their research on this topic in their new article, Acquisitions That Make Your Company Smarter, in the Winter 2014 issue of MIT Sloan Management Review. The article looks at the specific challenges of integrating a company that was acquired because of its understanding of a particular market, a particular product or a particular way of working with customers — what Amiryany and Ross call “knowledge-based acquisitions.”
“Knowledge-based acquisitions are focused on acquiring new knowledge — related to product features, customer needs, processes and technologies — and depend on assimilating the two companies’ expertise,” the authors write.
So what steps can companies take to make the process work?
Amiryany and Ross’ research suggests six on-the-job activities to help employees learn from one another. The text below is directly from their article:
Define tangible deliverables. Create mixed groups of employees to work on a task with a tangible deliverable. This can be a good way to help the employees understand each others’ approaches and agree on an end product that commingles the strengths of both companies and avoids turf battles.
Provide cultural training. Help employees understand the fundamental differences between their companies’ business approaches so that they understand and appreciate the “DNA” of each company and start to identify ways to preserve what is most valuable from each.
Let employees provide the solution and the approach. Expert employees are far more aware than acquisition specialists of how they can learn from each other. Ask them to come up with a list of practices and necessary steps that could ensure knowledge transfer.
Assign boundary spanners. Look for energetic, curious, all-rounders confident enough to win people over to their cause and to move in different professional spaces. Such individuals can motivate others to share knowledge across boundaries as long as the cause in which they believe is taken into account. These individuals can be instrumental in developing a post-acquisition social community to transfer knowledge.
Create a buddy system. Especially when acquiring small companies, match every employee of the target company with an employee of your own company, to enhance knowledge transfer. Schedule training sessions and social events where buddies meet and get to know one another.
Make it a game. Changing habits is hard. Anything you can do to make it fun will help encourage knowledge sharing. Try to promote some positive competitiveness among employees, reward them for adopting new habits and help make new practices stick. Team games in which the teams are drawn from both the acquiring and the acquired firms can help develop new networks.
In addition to these six steps, Amiryany and Ross also say that leaders must invest in collaboration and shared experiences. “Knowledge-based acquisitions are not an exercise in logistics and operations,” they write. “They are about learning.”
This article draws from Acquisitions That Make Your Company Smarter, by Nima Amiryany (IBM Global Business Services and visiting research scientist at the MIT Sloan School’s Center for Information Systems Research) and Jeanne W. Ross (MIT Sloan’s Center for Information Systems Research), which appeared in the Winter 2014 issue of MIT Sloan Management Review .