Microsoft is in: six strategies for LinkedIn’s continued success post-acquisition by Microsoft

2015 set the highest record for the mergers and acquisitions (M&As) volumes in transactions globally.  That trend is expected to continue strong in 2016 as per Deloitte’s annual trend report on M&As.  As such Microsoft’s purchase of LinkedIn last week constitutes the second largest acquisition in the technology sector.

With the rise of M&As, organizations are spending significant time and energy deliberating such transactions.  Although most organizations never declare the exact moment such deliberations begin, we can safely assume how it could take several months and/or years to evaluate such options preceding formal decision making and follow-ups including bicultural audits and due diligence by all organizations involved.

In an organization’s relationship with its employees, just as in interpersonal partnerships, even when we agree with a suggestion proposed by a partner, there is an expectation of transparency regarding the length of time for which deliberations have continued.  We not only want to know why one is considering a certain option but also want to be made aware as soon as one starts considering different options.  If the decision really matters, we may also want to have a say in the decision-making process.  Furthermore, it may impact our psychological contract with the organization, especially with a progressive company, such as LinkedIn.

Yet, how many employees and customers, the two most important constituent stakeholders, knew about the impending acquisition, had an opportunity to have a voice in this decision, or felt that this major corporate decision honoured their psychological contract with the organization.

Jeff Weiner, the CEO of LinkedIn wrote an inspirational letter to the employees of LinkedIn that he sent on the day of the announcement of this acquisition.  He opened his letter with a reminder about his contributions to growing LinkedIn and through that prompt made salient his trustworthiness and credibility in effective decision making and leadership of LinkedIn.  Yet, in his letter to his employees, he stated: “It’s one thing to change the world. It’s another to do it in our unique way: Members first.”  As a member, I didn’t receive an email or a personal prompt regarding this change, which made me reflect on the gaps between espoused versus enacted values.

Jeff (and his communication team, I assume) have written a good letter but employees, and members will be looking at his company and his actions to determine how well this change gets managed. As such, I’d like to share six suggestions that could help LinkedIn maintain its admirable corporate identity post-acquisition.

Acknowledge and operationalize the emotional rollercoaster that employees and its members may experience as they transition from confusion to understanding and excitement to exhaustion.  It’s nice to see that acknowledgment in the letter but build capacity to operationalize it by training employees with concrete strategies to manage transitions.  Help employees understand the psychological process of transitions of letting go, in this case, letting go of the admiration perhaps for LinkedIn’s corporate identity as an independent and innovative organization to accepting the new normal of revised associations with Microsoft.  Management can more actively commit to management by walking around to engage employees in informal dialogue and in doing so alleviate some fears and doubts regarding the possible forthcoming changes in the culture at LinkedIn.

Introduce transparency going forward through the use of weekly and biweekly acquisition specific news and updates.  Use media rich communication that includes face-to-face meetings for the masses through town halls and enhanced trust through dialogue established via a chain of communication from top-down and bottom-up.  Pair these meetings with brief written communications that outline details regarding the technical components of decisions being made; this would allow people the time needed to process the information in a meaningful way.

Explicitly solicit employee voice to co-create the future at LinkedIn. Employees often have the greatest and most valuable insights regarding business.  I thought it was a little odd that Jeff noted LinkedIn’s intention of helping Microsoft in soliciting employee voice, yet had failed to engage his employees in decision making regarding the major change event of being acquired by another company.  However, Jeff and other leaders at LinkedIn are not alone in struggling to balance transparency with the risk management.  There will be many new opportunities, however, to engage employees post-acquisition; for example, the customer-facing employees can act as sensors of misalignment with customer expectations for a few months or years following the acquisition.

Encourage management throughout organizational hierarchy to offer unstructured blocks of time for employees to discuss their thoughts regarding this acquisition.  This strategy allows employees to share their concerns and/or excitement about the changes with their peers.  Moreover, these social engagements should reinforce their social bonds and strengthen their social identity of being LinkedIn employees.  It may also help reduce employee stress and bolster their well-being.

Reinforce everything that will remain the same. This strategy offers employees an anchor through the impending changes resulting from M&As.  And Jeff has done that well in his letter to LinkedIn employees, but this strategy would have to be adopted by leadership across organizational levels to allay employee fears and assumptions.  One possible source of cynicism could be fear regarding the execution of the separation strategy, as communicated in the announcement.  Although the news release regarding this acquisition noted the leaderships’ intention and decision to maintain both organizations as distinct entities with minimal exchange of culture, it is rather rare for the leaders of the acquiring firm to not interfere with the organizational practices of the acquired firms.  Employees may worry about such interference in the future and can find comfort and confidence through a renewed focus on all that remains unchanged.

Jeff Weiner will report to Microsoft’s CEO, Satya Nadella, who will report to Microsoft’s Board. There are significant risks to this structure agreement, which gives disproportionate legitimate power to Satya as an intermediary between LinkedIn and its new Board of Governors.  As such, Jeff’s power is limited more to the execution of the strategy that will get set by Satya and the board.  Perhaps for the first year, Jeff Weiner could negotiate being designated as an ExOfficio member of Microsoft’s Board to have a voice on the Board and to ensure that LinkedIn can, in fact, continue to function independently.

Mergers and acquisitions are not just a compelling trend in the technology sector but several others including healthcare, oil and gas, and financial services.  The economic conditions and the desire to focus organizations on core business will continue to motivate organizations to consider M&As.  If you work in one of the aforementioned industries and you purport that people are the “biggest asset” for your organization, what are some of the strategies that you could consider as you start deliberating possible M&A activity in the near future?

About the Author

Sandeep is an Industrial-Organizational Psychology Practitioner focusing on Change Management. She is passionate about the Psychology of workplaces, work, and people at work and strives to help leaders create psychologically safe and healthy workplaces where employees proactively seek change for a better present and future of all.  To learn more, visit: www.multilevelleaders.com  

Picture obtained from https://blog.linkedin.com/content/dam/blog/en-us/corporate/blog/microsoft-linkedin-blog-share.png