How to Successfully Carry Your Safety Program Through a Merger or Acquisition
December 06, 2019
In today’s business world, there’s a good chance that your company has experienced or will in the near future, a merger or acquisition. While mergers are often instrumental in fueling a company’s growth, they also come along with major risk.
Before you initiate a merger or acquisition, all business owners know to ask a list of questions to ensure that the move will be profitable. Some of the most often overlooked questions, however, revolve around company safety. After all, how can you ensure that your safety programs can successfully transition to all parts of the new company? Will the merger put your own employees – and your company’s reputation – at risk?
When one company already has safety issues, a merger or acquisition can either solve or exacerbate the existing problems. For example, when Caterpillar acquired CleanAIR Systems in 2010, it knew that it was taking on a sinking ship. For years, CleanAIR Systems had experienced numerous safety incidents, including cuts, burns, and other hand injuries.
Caterpillar quickly identified some issues in CleanAIR’s culture that had led to these incidents, which continued to occur for a short period of time after the acquisition. Caterpillar created a “safety steering team,” improvements in company inspections, and a reporting system for any near misses, among other changes. A year after these changes were implemented, the facility’s recordable injury rate improved drastically by 70%.
Even in a situation where two relatively safety-conscious companies integrate, the process may be more involved than you might think. When two gas distribution companies merged in 2012, company safety was set as a top priority. AGL Resources and Nicor Resources were both natural gas distribution companies with large customer bases consisting of millions of customers, one based on Atlanta and the other in Naperville, IL.
These two companies initially merged with the goal of aligning all their company policies and procedures in just one year. Although both companies were in full compliance before the merger, their policies and procedures differed sufficiently from each other that reaching that goal ended up taking about three years. In the end, the company took on some of the best safety policies of each. For example, they succeeded in adopting one company’s lower OSHA recordable injury rate, while retaining the other’s lower motor vehicle incident rate.
Staying Safe During a Merger
If your company is undergoing an acquisition or merger, what can Corporate do in order to ensure that safety programs are successfully integrated, and that preventable safely incidents are avoided? Here are some suggestions:
- Start With a Vision. Inspire all employees – from both companies – to join you in a shared vision of safety-consciousness. Fortunately, this goal is usually easy to use as a source of common ground between the two integrating companies, making it a perfect focal point during a merger. Use the concept of sanitary design to create the proper safety environment right from the start.
- Understand the Other Company. Conduct a thorough evaluation to determine the other company’s current safety culture and process safety standards, as well as any previous safety incidents. Once you adequately understand what makes the other company tick in terms of safety, consider not just how your own company’s standards can improve theirs, but also whether adapting any of theirs can potentially improve your own.
- Start With the Leadership. Effective safety integration begins with leaders who demonstrate their dedication towards keeping their employees safe, through actions as well as speech. That means conducting safety walks through the company, pointing out potential work hazards that have gone unaddressed, and fostering an attitude that preventing employee injury is the highest priority. Only if they trust in leadership will your employees be willing to speak up when necessary and be part of the solution.
- Install Strong Agents of Change.Choose strong, trustworthy employees to lead initiatives regarding company safety and communicate with both merging parts of the newly unified company. Relegating these tasks to those with little experience or weak negotiating skills will destine the initiatives to failure before they have even begun.
- Consider Cultural Differences. Remember that mergers come with their own levels of complexity. Cultural differences between companies may extend to the general culture beyond the workplace, so make sure to take these issues into account when integrating your safety programs.
- Be Patient. Changing a company’s safety culture does not happen overnight. It takes time, patience, and willingness to examine each company’s beliefs, knowledge, and behaviors surrounding safety.
In short, the integration process can take many years, and potentially require more resources than you would originally assume. Safety should be an important part of integration and should be considered carefully during every step of the process.