Culture matters during mergers and acquisitions. If you can make a positive start, you’ll ease the process of working together. Here’s the case of one of my clients. Because they wish to remain anonymous we’ll call them ET.
They acquired a number of other companies and understood that checking the culture would be crucial for success. George Gentry is head of organizational effectiveness and culture at ET’s headquarters. He explains how they became aware of the culture during their acquisitions.
The Culture did it
“We’re looking to cover a whole range of products and services in our market – hence our acquisitions. Everyone routinely says that the culture “did it”. It’s the culprit if things don’t work out even if it’s really a leadership issue, or some other problem. Culture is often used as a container concept while we wanted to understand it. What is culture? How could we work with it?”
What language tells you
“We did our due diligence assessing the risks, the structure, culture, and processes of a prospective acquisition. We did a qualitative check: analyzing the prospect’s language, their leadership, rituals and symbols to get an idea of their current culture.”
The language that companies use gives away their culture, and whether it’s positive or not. You have the best view if you have access to internal documents, but even official publications will give it away.
- What do they focus on – what is being valued?
- Is it collaboration or competition? Is it innovation and learning, or efficiency?
- What is the purpose of the company (and how do they present it as meaningful?).
- Do you notice genuinely positive language (not meaning PR phrases) or do they use many negations in their texts?
- Is the language impersonal, or do they use We, He, She?
You can score the language according to the four elements of a Positive Culture (as we’ve seen before: Positive Awareness, Connection and Collaboration, Meaningful Purpose, Learning and Autonomy).
Work with facts, not fiction
George continues: “Next, after we bought a company, we used the OCAI culture survey to assess the culture. We organized sessions with the leadership teams of the receiving and the acquired organization. This helped them get a better understanding of the culture, possible differences and similarities, and how they could work together now that they were aware of their current culture types.”
Unfortunately, M&A time is hectic. “HR matters like benefits, terms of employment, responsibilities, and so on, seem more urgent to arrange. Culture is often the topic that gets postponed.” That is a missed opportunity. After mergers and acquisitions: making a fresh start with a positive culture might give you wings!
So far, Gentry has seen an interesting pattern in their respective cultures. “We often acquire startups that score very high on flexibility, innovation, collaboration: all elements of a positive culture. ET is a mature organization and we focus on output and efficiency. ET staff regularly feels a gap. But the culture profiles also show common ground. That’s a great starting point for successful collaboration.”
Using a culture survey helps to verbalize what is unconscious (the culture) and to work with the facts (instead of prejudice, and biased expectations).
Find and solve dilemmas
The ET top executive team has defined core behaviors that they see as crucial in the culture. Even though these behaviors were developed in a top-down way, ET has a team of change champions that embodies this core. They organize culture dialogues with teams.
For a positive culture, it’s important to agree on the details and dilemmas of behaviors. For instance, how do you “do” a customer orientation? Does this mean that the customer receives endless maintenance of older products? Or do you sell “no” to the client?
How do people innovate and keep learning (an important part of a positive culture)? Can staff always bring up new ideas or do production targets get in the way? Just some examples.
How an organization handles their dilemmas defines the culture, and whether that culture is positive. That’s why principles, values and core behaviors are “easier said than done.” Whether an acquisition is a success depends on the answers to dilemmas. And it’s not just the answers; what matters most is what people actually DO when faced with a dilemma. And if they find dilemmas difficult: whether people are open to share and discuss them.
If you want to gauge another culture check their interactions and dilemmas:
- Are people open to collaborating with new partners?
- Do they use greetings in emails or not? Is there small talk or do you cut to the chase immediately?
- What does their language tell you? Does that resonate with your values and behaviors?
- Are they open to new ideas, and to sharing dilemmas?
Developing a more positive culture can start right from the beginning, as a fresh start for everyone!
This is a real client case. George is a pseudonym. His organization wishes to remain anonymous. Thank you for sharing, George!
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© Marcella Bremer, 2018. All rights reserved.