When company mergers or acquisitions fail, it is common to find people and culture integration issues at the core, with reports suggesting that poor cultural integration can account for up to 90% of failures.
As culture is deeply interwoven into organisational fabric, including all aspects of business operations and decision making, it is crucial that cultural differences are understood and managed effectively during M&A proceedings. If left unchecked, the integration is at risk of impeding issues that can impact overall organisational effectiveness over time.
Examples of potential cultural barriers stemming from company differences:
Strong buy-in to former company purpose and vision, despite strong similarities with the merging company
Strong value placed on company history and evolution supported by organisational stories and rituals
Differences in values and behaviours that are upheld and rewarded, both formally and informally
Leadership accessibility, visibility, and style, such as people orientation and priorities
Competing strategic orientation, ranging from customer focus, profit and performance priorities, to learning and innovation imperatives
Language used to communicate internally and externally, including tone, formality, sender of message and channels used
Physical workplace design, such as open space versus private offices, and the spatial location of team members versus senior roles.
Discover how HENRY REED can support your organisation, leaders, and employees through M&A proceedings. Contact us on 1300 266 995 to arrange a complimentary Culture Discovery Session.