Your organization’s culture is arguably your greatest strategic asset. Your competitors can potentially match your product or service by creating a marketing strategy as equally as powerful as yours. But, no other organization has your culture. It’s what makes you successful in what you do. So, what happens when your culture and another organization’s culture are supposed to merge into one?
While Mergers and Acquisitions (M&A’s) are quite often positioned as a marriage, there is rarely love involved. There are always two sets of expectations trying to occupy the same space. Each side comes to the table with very different preferred outcomes. As Don Harrison, developer of the AIM methodology likes to say, “Same bed, different dreams.”
M&A is Culture Change: Prepare for It
Ironically, the more closely related the two businesses are, the more difficult the integration will be. In fact, the success rate of all Mergers and Acquisitions is only about 1 in 7. Why do so many deals fail? The number one reason is culture clash.
Your corporate culture is the collective pattern of values, behaviors, and unwritten rules of your organization—it’s the collective frame of reference for your organization. There are two sides of the iceberg we’ll call your organization, the formal and informal. The formal side is above the water line and includes:
The Informal side is what lays below the water line. It includes:
During an M&A, millions of dollars will be spent trying to integrate the formal systems. Examples include; Human Resources policies, IT systems, org charts, etc. But the real work of an integration needs to occur below the water line where the informal culture of both the organizations lies.
Changing culture requires a whole lot more than putting out a new slogan and creating a new vision and mission statement. A series of workshops that describe the new culture, or communications from the top about what you want the new culture to be are just not going to cut it.
The Keys to Successful Integration
A successful M&A will take at least 18 to 24 months of extremely difficult work. It is a second order, transformational change that requires a structured implementation approach that addresses the human elements of the integration.
Here are a few of the keys needed to make a Merger/Acquisition successful based on the principles of the Accelerating Implementation Methodology (AIM):
Successful integration requires much more than the integration of policies, systems, and structures. Mergers and Acquisitions must be managed on both the technical and human sides, with necessary governance, with rigor and discipline. A solid strategy for integration that includes specific plans for building Sponsorship, Reinforcement, Cultural Fit and Communication is crucial. Remember, HOW you integrate teaches both organizations powerful lessons that remain long after the deal is signed!