3 Guideposts for Merging Corporate Cultures

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Mergers are hard work. That’s why as many as 83% of mergers fail. Many times there exists a “my way or the highway” mentality and since companies are often acquired for their customers, technology, or both, people are left as an afterthought.

How do we set ourselves up for success in this new environment? I’ve been through the process a few times and in my experience your best bet for success is echoed by Ben Horowitz when he says “take care of the people, the products, and then the profits- in that order.” Keeping that mantra in mind, I’ve boiled it down to 3 bullets to serve as guideposts on the people road.

  1. Know the goals and motivations – The goal of merging may seem obvious but it’s often poorly articulated. Work to understand people’s motivations on both sides of the integration. Are people incentivized to make this work? What output is expected and on what timeline? Make a plan that truly incentivizes the people necessary to make the integration work, and then follow through. Both Change and communication is expected but only one is guaranteed.
  2. Identify leaders who can be culture torchbearers – Find people in the acquired organization who can lead and are already aligned culturally with the acquiring organization. Delegate responsibilities where they can find success. People will start to follow and allegiances will be reinforced.
  3. Look for ways to bond the teams and measure effort – Teams bond when leaders create jointly owned solutions. Celebrate wins and ask people to participate in the solution process when you fail. Measure progress with an engagement survey. Start with a baseline of employee’s engagement around the goals of integration and use pulse surveys to track.

According to KPMG “…[mergers that focused on] resolving cultural issues were 26% more likely to succeed in adding value for shareholders.” M&A integrations are never easy and many of them fail to live up to expectations. Get the people part right and the other pieces will fall into place. If you’re currently working to integrate two cultures than check out this white paper “Improve Mergers and Acquisitions.”

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