CULTURE INTEGRATION

WHAT IS CULTURE INTEGRATION?

Organisations pursue mergers and acquisitions for a variety of reasons, including growth, to access intellectual property or to gain market access, to name a few. However, there are significant challenges in successfully integrating two organisations.

Typically, the due diligence process highlights financial or legal issues, but what is often overlooked or underestimated is the analysis of the people involved – the integration of the two cultures. This integration is one of the main factors that can destroy value once a deal has been completed.

“Culture clash is often cited as the number one reason mergers fail”

NEGLECTING CULTURAL INTEGRATION

The cost of neglecting the integration of cultures is often observed where:

• Morale drops
• Synergies fail to materialise, and
• Key people leave the organisation

The process of culture integration requires organisations to take decisive, early steps to define the culture they want.

This is achieved through a culture analysis, used to uncover similarities, and differences, that will impact integration efforts and strategic objectives.

THREE TYPES OF CULTURE INTEGRATION

Typically, there are three types of culture integration.

ASSIMILATION Occurs when one organization agrees to conform to the other’s existing culture.
PARALLEL Occurs when each organisation’s culture remains largely independent, sharing best practices during and after the transaction.
CO-DESIGN Occurs when organizations bridge cultural gaps to define an entirely new culture.

Cultural integration isn’t something that can wait until a deal is done.

“When pursuing a deal, cultural integration should be a core focus, given its ability to disrupt or damage the future viability of a merger post-close.”

CULTURE INTEGRATION IS TWOFOLD

Firstly, we perform the Culture Due Diligence Assessment. We define a culture profile that is aligned to your merger or acquisition business strategy and key value drivers, then we assess the critical culture traits and determine the culture drivers. We analyse these to determine their culture- positive or culture-negative impact. These results are used to identify the critical culture integration focus areas and, to practicalize the culture integration communication.

Secondly, we develop a comprehensive Culture Integration Roadmap by which we actively manage the culture integration process.

Our twofold method ensures a proactive approach to culture integration with strong visible leadership support.

We can help you with Culture Integration, talk to us today.

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