Following the resurgence of the Black Lives Matter movement in the summer of 2020, diversity and inclusion catapulted to the top of boardroom agendas. Investments were made, CEO pledges were taken, D&I directors were appointed — all in the name of cultivating more equitable and inclusive companies and, by extension, a fairer society. Many of us feared this collective ‘awakening’ and newfound momentum would be relatively short-lived, and regrettably were proven right. There is substantive proof that diverse and inclusive organisations perform better, boost retention and foster happier workforces. However, nearly three years on from the BLM protests, companies of all sizes are failing to enact the cultural and operational changes that they promised at the time. An audit of the FTSE100 revealed that despite 99% having an inclusive mission statement, only half had D&I initiatives in place. In fact, of the FTSE100, those performing worst in terms of D&I had the lowest Glassdoor scores (source: Business Leader). Although BLM’s impact on the corporate world wasn’t as long-lasting as hoped, there is still an appetite for change across industries — many just don’t know where to start. In this article, we will share some practical steps you can take to incorporate diversity and inclusion into your M&A integration practices.
As a Buyer, it’s important to gather an accurate lay of the land of your Target company so that you can determine where to tailor and focus your efforts. Similar to how you would tackle other facets of company culture, we advise you to set up deep-dive sessions with your Target to gather qualitative data around how they handle diversity and inclusion. This should cover elements such as recruitment processes (are certain qualifications required? Are CVs mandatory, or do they offer role-specific assessment tests? How are interviews designed to reduce biases?), training (does D&I factor into learning and development schemes? Are modules made accessible for different learning styles and neurodiversity?) and values (how are inclusive behaviours encouraged? Does the management team lead by example?). In an ideal world, your Target would also share staff demographic data during this due-diligence phase, so that you can assess metrics in line with national averages. Unfortunately, many companies are unwilling to record quantitative D&I data, citing flimsy excuses around lack of resources or anonymity concerns, so it may prove difficult to obtain. If you are able to collect anything measurable such as gender pay gap percentages (which some employers are legally required to report), this will be hugely valuable.
We also recommend taking a close look at the leadership team, both in terms of its demographic make-up and the attitudes of its individuals. If the most senior members of your Target do not reflect the rest of your staff population, or do not practise what they preach with regards to company values, it is highly likely that your efforts will fail. Buy-in from your management team is critical, as cultural change trickles down from the top of an organisation. All of your information-gathering through the due-diligence phase will help to paint a picture of where your Target sits on its D&I journey and, more importantly, how open and committed they are to evolving further. It is easy to implement reactive quick-win policies, but attitudes take a long time to shift — so think carefully about whether their culture will dovetail with yours.
If you do decide that there is compatibility between your two cultures and progress with the transaction, it’s relatively simple to begin softly introducing them to D&I initiatives from Day 1. Talk to your staff about D&I engagements in company meetings, making changes visible and explaining their rationale; build an unconscious-bias training module into your onboarding process; normalise a culture where individuals are respectful to one another and signpost formal routes of escalation for feedback or complaints. The smallest of gestures in this area can go a long way, making employees feel safe that their concerns will be listened to and acted upon. This is especially important when building trust in the early days of integration, and will reduce employee attrition. All conversations in relation to D&I must be honest and non-judgemental, particularly if your Target is new to the field. This line of work will inevitably ruffle feathers: its very aim is to disrupt the status quo that led to inequality in the first place. Just like any other integration-related issue, it’s your job as an integration leader to pre-empt qualms and soothe staff anxieties with regular communication, pulse surveys and feedback loops so that you are able to tackle D&I concerns head-on.
It is an impossible feat to ‘complete’ diversity and inclusion work: there is always more to learn and implement. Every company is at a different stage of their development journey, so there is no use weaponizing D&I as a competitive strategy. Building a D&I-forward NewCo organisation is a fantastic opportunity to collaborate, share learnings and derive collective benefits for all. Each organisation is unique and will require a bespoke approach: some policies may be wildly popular, others may fall flat. Most importantly: encourage asking for help. There is nobody better placed than your staff to provide feedback on what they love about the company culture, versus where there is room for improvement. Diversity and inclusion work should be iterative: take small steps that amount to tangible change, always in alignment with your end vision.
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