Guest Contributor May 27, 2015
The following post was written by Jeff Alvis, a Director at The Keystone Group.
There are more than a few stories about the M&A process that looked so good on paper, but never had the chance to live up to its potential. Inattentive or poor culture integrations is one of the main reasons that industry leaders cite when they describe outcomes that, in retrospect, were unnecessarily or unknowingly “set up for failure.” Historically, many executives tend to dismiss culture as too soft-skills oriented, too touchy-feely to include in a serious assessment of potential risks and opportunities. For the same reason, it’s glaringly absent when implementing plans to reach a desired post-close culture.
This may be a failure that’s hard to recognize because it seemed like it was being addressed. Although avoidance and distancing—ironically—are based on an awareness of those very touchy-feely factors we perhaps hope to avoid dealing with, no one dared to look corporate culture directly in the eye. All the phrases included reassuringly true but generically bland statements, like “We share the same values” and “They have good people.” And all the safe cliches were the same: “Safety is our number one goal” and “People are our number one asset.” So what could possibly go wrong with such a superficial gloss?
Until that rubber hit the road, and only in motion do many companies discover that their underlying operating practices—and even the rationale for them—reflected unwritten rules, and choices and behaviors and communication styles, that turned out to be incommensurable. These aren’t isolated problems to solve, because culture infuses every department and desk drawer in it. They include fundamental questions: How are decisions made? How are people rewarded and compensated, and why? Is there truly a customer orientation, or is the enterprise guided by a low-cost provider mentality? What does an adherence to process and systems mean? What gets people in trouble?
The topic is worthy of much discussion, but a few simple things will help you start down the right path:
Instead, set your people up for success! There is nothing better than a deal with an effective cultural transition. By focusing on it early, often and consistently, your chances for that success will improve.
Jeff Alvis is a Director of The Keystone Group, focusing in the areas of mergers and acquisitions, profit improvement and business strategy.
Featured image courtesy of Wikimedia Commons user Henry Mühlpfordt.
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