Optimizing Cultural Integration

Actually delivering the intended benefits of a merger or acquisition can be a challenging proposition. Studies show that most mergers, 70% or more, fail to deliver their intended benefits and destroy shareholder value in the process. In fact, one well-regarded study has shown that only 21% of mergers actually return anything to stockholders, and the rest are neutral or negative. Another study shows that no more than one-third of mergers or acquisitions are a clear success, one third are clear failures, and the remaining third demonstrate no benefit at all from the transaction.

Post-merger and acquisition activities often fall short of putting into place the most important element to effectively executing the intended business strategy contemplated by the combination in the first place: working with the culture of the organization. That’s not surprising.

While research shows that 90% or more of organizations are working to improve their culture in some way, our own studies reveal that almost 70% of business leaders acknowledge that they do not have a clear plan to internalize, integrate, and sustain the culture necessary to achieving their business objectives. This need is greatly magnified in a post-merger and acquisition situation.

Whether the post-merger or acquisition focus is on combining cultures, adopting the cultural traits of the acquiring company, or creating a culture where the two company cultures operate effectively as two disparate cultures, leaders must take accountability to create the culture that will be essential to success, in both the long and short-term.

Culture Combinations

There are four basic approaches to establishing culture in a Post-M&A environment.

Correlation_Circle

Assimilation

Both organizations operate mostly independently, maintaining their own cultures and correlating their activities, as needed.

Correlation_Circle

Correlation

Both organizations operate mostly independently, maintaining their own cultures and correlating their activities, as needed.

Integration_Circle

Integration

The two organizations share the best of both cultures, while remaining independent.

Creation_Circle

Creation

The two organizations merge into a third distinct culture.

Get Your Organizations Integrated

Our culture change solutions help clients accelerate the formation and integration of the needed post-merger and acquisition culture. Contact one of our M&A experts to help identify and implement the right M&A cultural integration solution for you.

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Partners In Leadership

Partners In Leadership