Culture Clash — When Two Companies Merge
by Beth Banks Cohn
In the heart of the recent deep recession, mergers and acquisitions nearly came to a halt. But now that a convergence of economic factors is making mergers and acquisitions more appealing we are starting to see more of them, such as the recent Pfizer-Wyeth and United-Continental deals.
On a macro scale, mergers are about profits. On a micro scale, however, mergers are about people — how well they work together, how well they get along, and how well the two groups can integrate their knowledge and synthesize their experiences for the good of a third entity: the newly combined workforce.
The success of any merger depends largely on management doing boots-on-the-ground planning and execution that focus on integrating two sometimes disparate cultures, each with their own nuances.
Culture encompasses beliefs, values, ethics, procedures, behaviors, expectations, work styles, and the way members feel about their workplace and company identity. Meshing two complex cultures may be one of the most difficult managerial challenges you will ever undertake.
If you are in a company that's about to merge with another, there are ways to avoid potential traps and pitfalls that are a result of culture clash.
This is a topic that could fill an entire volume so let’s just look at some key steps for a successful merger integration plan.
The Alpha Company takes the lead.
It is important for the dominant company (and there will always be one) to take the lead in engaging their merging partner. Every successful culture integration strategy needs a leader to define goals and objectives, then develop a plan, implement it and track progress..
Do a side-by-side culture audit.
Developing the right strategies requires observing key elements of both cultures.
Define the "Third Culture."
From the observations you and others collected, above, decide what the "third culture" will be. In some cases, the culture gap between two groups is so immense that it might make more sense for the dominant company to make their culture the new culture, and ask the secondary culture's members to assimilate. However, after a thorough and thoughtful audit, you will more likely find valuable and worthy aspects of both cultures. Ideally, a “third culture” will comprise the best elements of both.
Engage all levels of leadership.
Create a plan that involves all levels of leadership in the company in implementing the "new" culture. Give department leaders strong, clear, and specific definitions of the new culture so that managers in every department can align their policies and protocols. The goal is to get multiple leaders working at various levels of the new organization, working from the same cultural expectations, and speaking with one voice to move your cultural integration agenda ahead.
When two companies merge, culture clashes are inevitable, but they don't have to be lasting or negative. Rather, think of cultural differences as drivers of positive change — like the energy and spark generated by flint striking steel. It is your opportunity to create something new.
Banks Consulting! LLC has just launched their Merger & Acquisition Maximizer™ tool. Call or email today to learn more: 732-786-8223 or beth@banksconsulting.net.
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