A merger is the integration of two organizations into one. The reasons to do so are numerous: economies of scale, industry capacity reduction, growth, acquisition of know-how … But the data are impressively dramatic. Most mergers fail and destroy value. One of the main reasons is because there is not enough focus on cultural compatibility.
I propose these 10 “guidelines for culture management during mergers”.
[/tatsu_text][tatsu_lists key= “HJEv3HUO8Q”][tatsu_list icon= “icon-icon_check” circled= “0” icon_bg= “” icon_color= ‘{“id”:”palette:0″,”color”:”rgba(206,0,25,1)”}’ key= “HyD2HIOUX”]Integrate “culture” in the process of the due diligence. Do this early on.
[/tatsu_list][tatsu_list icon= “icon-icon_check” circled= “0” icon_bg= “” icon_color= ‘{“id”:”palette:0″,”color”:”rgba(206,0,25,1)”}’ key= “SkevhH8_Lm”]Assess both cultures to detect differences and more importantly the common ground.
[/tatsu_list][tatsu_list icon= “icon-icon_check” circled= “0” icon_bg= “” icon_color= ‘{“id”:”palette:0″,”color”:”rgba(206,0,25,1)”}’ key= “BkbwhSIOI7”]Take mutual appreciation as point of departure. Avoid the pitfall to focus on weaknesses. Search for compatibility, synergy, commonality.
[/tatsu_list][tatsu_list icon= “icon-icon_check” circled= “0” icon_bg= “” icon_color= ‘{“id”:”palette:0″,”color”:”rgba(206,0,25,1)”}’ key= “H1zwhSU_87”]Try to appropriate cultural differences and commonalities from the very beginning, during the merger negotiations. Negotiators should be very aware of how the culture of the other company works.
[/tatsu_list][tatsu_list icon= “icon-icon_check” circled= “0” icon_bg= “” icon_color= ‘{“id”:”palette:0″,”color”:”rgba(206,0,25,1)”}’ key= “BJQwnrLdIX”]Appoint someone to deal with culture change. Make sure that this is someone with impact.
Don’t confuse this person with a change manager. Change is very often about culture. But someone who deals with culture engineering will continuously look for ways of reinforcing the culture, independently of any project.
Define a third culture, next to the existing two cultures. Avoid that one group has to adapt to the culture of the other group. Both merging groups should evolve versus this new third culture. Make sure that this is clear for everyone.
[/tatsu_list][tatsu_list icon= “icon-icon_check” circled= “0” icon_bg= “” icon_color= ‘{“id”:”palette:0″,”color”:”rgba(206,0,25,1)”}’ key= “HkxcL8uI7”]Make sure the new culture is tangible. Look for early beacons of culture change. Many small initiatives, will make the culture change. Ut is also important to detect inconsistencies between the current operation model and the target operational model.
[/tatsu_list][tatsu_list icon= “icon-icon_check” circled= “0” icon_bg= “” icon_color= ‘{“id”:”palette:0″,”color”:”rgba(206,0,25,1)”}’ key= “rkZ3L8d8X”]Make sure that important decisions are made in a culturally neutral way. The risk exists that one group will impose decisions over the other. This will create a quilt-culture instead of a homogeneous culture. For every strategic decision a cultural risk assessment must be made, and actions should be define to neutralize negative fall-out.
[/tatsu_list][tatsu_list icon= “icon-icon_check” circled= “0” icon_bg= “” icon_color= ‘{“id”:”palette:0″,”color”:”rgba(206,0,25,1)”}’ key= “BkjTUU_8X”]Design processes and interfaces between the various parts of the organisation with the third culture in mind. Develop ways to detect cultural short-circuits.
[/tatsu_list][tatsu_list icon= “icon-icon_check” circled= “0” icon_bg= “” icon_color= ‘{“id”:”palette:0″,”color”:”rgba(206,0,25,1)”}’ key= “SySkDLO8X”]When designing a new culture, adopt an empathic way of working. Think about how the new culture will feel like. Emotion, Experience, Effort are three elements to integrate in the culture design. Take into consideration the doubts of people and address them early on. This is more important when the merger took place between former competitors.
[/tatsu_list][/tatsu_lists][tatsu_text bg_color= “” max_width= ‘{“d”:”100″}’ wrap_alignment= “center” animate= “” animation_type= “fadeIn” animation_delay= “0” margin= ‘{“d”:”0px 0px 30px 0px”}’ box_shadow= “0px 0px 0px 0px rgba(0,0,0,0)” padding= ‘{“d”:”0px 0px 0px 0px”}’ border_radius= “0px” key= “S1rCt8OLQ”]The success of a merger should not be a matter of coincidence. Even though the integration of two organizations does not follow predictable paths, organizations can do a lot to avoid the collision of two cultures.
[/tatsu_text][tatsu_empty_space height= ‘{“d”:”30″}’ hide_in= “0” key= “Hk0QcL_LX”][/tatsu_empty_space][/tatsu_column][tatsu_column bg_color= “” bg_image= “” bg_repeat= “no-repeat” bg_attachment= “scroll” bg_position= ‘{“d”:”top left”}’ bg_size= ‘{“d”:”cover”}’ padding= ‘{“d”:”0px 0px 0px 0px”}’ custom_margin= “0” margin= ‘{“d”:”0px 0px 50px 0px”}’ border= ‘{“d”:”0px 0px 0px 0px”}’ border_color= “” border_radius= “0px” enable_box_shadow= “0” box_shadow_custom= “0px 0px 0px 0px rgba(0,0,0,0)” bg_video= “0” bg_video_mp4_src= “” bg_video_ogg_src= “” bg_video_webm_src= “” bg_overlay= “0” overlay_color= “” animate_overlay= “none” link_overlay= “” vertical_align= “none” column_offset= “0” offset= “0px 0px” z_index= “0” column_parallax= “0” column_width= ‘{“d”:33.33,”l”:33.33,”t”:33.33,”m”:100}’ column_mobile_spacing= “0” animate= “0” animation_type= “fadeIn” animation_delay= “0” image_hover_effect= “none” column_hover_effect= “none” hover_box_shadow= “0px 0px 0px 0px rgba(0,0,0,0)” col_id= “” column_class= “” hide_in= “0” layout= “1/3” key= “HygPmw8_UX”][tatsu_icon name= “icon-icon_chat” size= “xlarge” style= “plain” bg_color= “” hover_bg_color= “” color= ‘{“id”:”palette:0″,”color”:”rgba(206,0,25,1)”}’ hover_color= “” border_width= “” border_color= “” hover_border_color= “” alignment= “center” href= “” new_tab= “0” lightbox= “0” image= “” video_url= “” hover_effect= “none” animate= “0” animation_type= “fadeIn” animation_delay= “0” margin= ‘{“d”:”0px 0px 20px 0px”}’ box_shadow= “0px 0px 0px 0px rgba(0,0,0,0)” hover_box_shadow= “0px 0px 0px 0px rgba(0,0,0,0)” key= “HkfwdUOI7”][/tatsu_icon][tatsu_text bg_color= “” max_width= ‘{“d”:”100″}’ wrap_alignment= “center” animate= “” animation_type= “fadeIn” animation_delay= “0” margin= ‘{“d”:”0px 0px 30px 0px”}’ box_shadow= “0px 0px 0px 0px rgba(0,0,0,0)” padding= ‘{“d”:”0px 0px 0px 0px”}’ border_radius= “0px” key= “H1P9OIdIX”]Otolith is a European advisory house, focussed on the improvement of strategy execution.
People are the center of any successful strategy. Every strategy should be people-centric.
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