Analysts forecast that merger and acquisition (M&A) activity will rise in 2024. Major companies like Capital One and Discover, two of the largest credit card companies in the U.S., have already announced plans to merge, leaving the question of how company cultures will be impacted.

To achieve holistic success in a merger, company culture must be a foremost consideration. Nearly all executives (95%) agree that unifying company cultures is crucial for merger success, according to a McKinsey report. Despite this, culture is often overlooked when major companies undergo a merger: A quarter of executives surveyed by McKinsey blame failed mergers on the lack of cultural linkage.

Therefore, it is paramount that cultural synergies are formed between the two companies. HR leaders must consider how two company cultures can be maintained and integrated to prevent negative outcomes, including turnover, decreased productivity and morale.

As vice president of the International Coaching Federation’s (ICF) Coaching in Organizations, I am keenly aware of the challenges organizations of all sizes face when navigating major transitions. The HR teams that invest now in elevating company culture are better prepared to navigate a seamless M&A when and if the situation arises. So, what can HR teams do now to prepare for a merger in the future? Let’s explore.

Prioritize cultural considerations

When companies merge, the goal is to leverage the best of both firms to become a powerhouse that capitalizes on the most valuable traits of each company. For Capital One and Discover, both of which have been recognized as great places to work on the Fortune 100 Best Companies to Work For^® list, maintaining this prestige and positive work environment will be crucial as they navigate this M&A.

While prioritizing culture as a driving force behind an M&A may seem like a no-brainer, it is no easy feat. If core elements of either culture are overlooked, there will be a disconnect between the “initial” team and the “new” team that will become more challenging to address as time passes. Companies experience decline in productivity and innovation if employees don’t believe the company culture they’re used to will remain, according to a Deloitte study.

For employees of the acquired company—in this case, Discover—there may be feelings of alienation if the culture of the buyer appears dominant. HR teams must take steps to prevent the loss of key talent whose skills may have been a major factor in the initial decision to combine the companies. HR leaders’ consideration of culture can ensure a merger’s success and the best for both companies. Without it, merger failure is all too often the outcome.

Proactively leverage evidence-based tools

Luckily, there are many tools in the HR toolbox that can prepare a company and its culture to handle an M&A long before challenges arise. Coaching is one approach that can support the seamless integration of two cultures. This can be done through direct coaching, leadership with a coach approach or adoption of a comprehensive coaching culture. All of these are proven methods to fortify merging companies’ cohesiveness.

OQ, a globally integrated energy company, underwent a massive merger, bringing nine companies together under a single brand. Its leaders understood the value of a company culture during times of significant change and invested in developing a coaching culture to unify disparate teams across the organization. Despite an unprecedented shift in the workplace—bringing new employees, ways of working and measurements of success together—OQ increased employee engagement, accelerated leadership development and improved decision-making as a direct result of its coaching program.

When HR leaders utilize coaching to promote culture, it strengthens employee resilience for change management and fosters a positive company culture, according to ICF and Human Capital Institute’s Building a Coaching Culture study. Additional common benefits include employee engagement, increased commitment, better employee relations, improved team functioning and elevated job satisfaction—all of which are sought-after goals when navigating or preparing for a merger, according to the study.

Establish a path forward

M&As are always outside the control of HR teams, but how involved teams are led through the transition is not. This starts by understanding the needs of the organization and its teams. By assessing which elements of company culture are most valued, HR teams can make the proper investments to strengthen core values, while making room for new attributes and ideas to combine seamlessly. Not only does this arm a company with the internal skills needed to navigate an M&A, but it may even inform whether a merger makes sense.

The Deloitte study confirms that, while over half of business leaders understand the importance of assessing and managing culture during an M&A, they feel ill-equipped to make decisions to navigate bringing those cultures together. As a result, only 27% prioritize cultural compatibility during the discovery phases of a merger. HR can engage a professional coach to better understand which cultural elements are most important to teams and leaders and, together, establish a coaching culture that can prioritize company values during the merger and long after.

Conduct a culture audit—then, invest accordingly

Although integrating a coaching culture may feel complex, it comes down to strategically implementing key skills across all team levels—engaging in active listening and open dialogues, and then making changes as needed. This, paired with a culture assessment led by a coach, positions companies to prioritize a culture that drives engagement and productivity and lessens the risk of turnover and employee disconnect.

If a merger becomes a reality, teams can feel equipped to navigate the turbulence and prepare for a cohesive cultural blend that prioritizes the best of both companies and results in one unified, efficient and productive company. If the Capital One/Discovery announcement launches the merger season experts predict, these vital considerations will gain increasing priority.

Learn how to leverage people-centric cultures for business success at HRE‘s upcoming EPIC Conference, April 24-26 in Las Vegas. Click here to register.