Business is rife with tales of mergers and acquisition (M&A) deals gone wrong because the cultures of the two organizations clashed, and the leaders of the merging companies didn’t sufficiently anticipate the issues and problems and marshal the resources to avert disaster. But not all firms fall into this trap. What do they do differently in M&A, and what advice would they give to less-experienced firms?
Since 2005, WTW has run quarterly roundtables, enabling the world’s most experienced acquirers to network and share current and emerging M&A practices. The issue of cultural integration is the most frequently discussed subject. While it’s widely known that culture problems can lead to deal failure, it was the roundtable executives’ own specific experiences and analysis of their own deals that motivated them to improve their approach to culture management throughout the M&A process ─ from beginning to end. From these roundtables, whose members top the Fortune 100, 10 key cultural-focused imperatives emerged.
One year later he was singing a different tune: “We are talking about putting two cultures together that are quite different, quite distinct. I am trying hard to understand how to make this work. I will tell you that it is not simple, and it is not easy, and it is not clear to me that it will necessarily be successful. As you put two cultures together, you get all sorts of aberrant behavior. I will tell you that the literature of putting two families together speaks volumes to me. The problem of stepparents, the description of some children rejecting one parent and other children rejecting other parents is all meaningful to me.
Our roundtable members tell us that, when adhered to, these imperatives yield remarkable success. There will naturally be hiccoughs when two different cultures are brought together, but mitigation of problems is within reach for all (okay, most) M&A deals with proper planning and action.