M&A Culture Assessment and Integration

In the last 20 years the number of worldwide mergers & acquisitions neared 800,000 transactions, with a value of over $57 trillion US dollars.1 The number of articles analyzing why mergers & acquisitions fail far exceeds 70,000; and the theme of culture permeates these discussions. The consensus seems to be that cultural integration, the key to successfully merging two or more organizations, often has been deficient.

culture m&a
As a pioneer in the assessment of organizational culture, Human Synergistics provides the process and expertise needed to help merging organizations successfully integrate their cultures and realize the synergies anticipated. At the center of our approach is the Organizational Culture Inventory® (OCI®). It's the best tool for cultural integration because it measures real culture—in terms of "what's expected around here"—as well as the ideal culture—in terms of what should be expected to make the combined organization successful. Other tools, including some that are mistakenly called culture surveys, focus on aspects of climate--such as goal setting, selection, mission, and the like. These attributes can instead be measured more strategically and linked to culture using our Organizational Effectiveness Inventory® (OEI). If you want to integrate cultures you must measure and focus on the climate as well as the culture of both organizations and bring them into alignment. 



“As part of the acquisition and integration process, Business Objects used new software called Organizational Culture Inventory to help plan and monitor organizational change and facilitate the merger. One of the challenges was integrating the two different cultures. Business Objects was more corporate, direct-sales oriented and aggressive, a combination of French and U.S. styles; Crystal, on the other hand, was more “Canadian” in that it was egalitarian, communicative, community oriented and entrepreneurial. The solution, says Woods, was to form a new culture, picking the best from each.”

Source: Mergers and Acquisitions: Culture Clash


Human Synergistics' Proven Approach

CHALLENGE

SOLUTION

  • Unite the combined team behind a Constructive vision for the future to deliver targeted results/outcomes (growth, innovation, customer experiences, etc.).
  • Support the processes of defining, communicating, and/or operationalizing the mission, purpose, and values of the consolidated entity.
  • Administer the OCI Ideal to identify the shared values and behaviors that will promote goal attainment and the effectiveness of the combined organization.
  • Provide a common language and data for identifying and discussing the legacy cultures of the organizations coming together.
  • Inform integration plans to leverage cultural strengths and reduce counter-productive features of either (or both) the legacy cultures.
  • Identify the legacy cultures of the organizations (using the OCI), similarities and differences, and gaps relative to the ideal culture (using the Constructive, Passive/Defensive, and Aggressive/Defensive framework and the 12 cultural styles).
  • Delineate organizational strengths and weaknesses to guide the effective integration and improvement of systems, structures, leadership styles, communication, design of jobs, etc.
  • Use the OEI to understand the work climate (systems, structures, leadership approaches, etc.) for each legacy organization, how the factors are causally related to cultural norms, and the ways they can be changed to Constructively redirect the culture of the combined organization.
  • Inform customization of integration plans by department, location, or team.
  • Inform plans around important initiatives and for reaching critical goals (e.g., growth, innovation, customer experience, etc.).
  • Leverage the OCI-OEI data to understand sub-culture and climate differences (across departments, locations, ethnic groups, etc.), identify "local" changes as appropriate and refine improvement plans.
  • Track the progress of cultural integration and improvements in the climate and use results (across units) to identify and disseminate successful change initiatives.
  • Administer the OCI-OEI pulse every 3-6 months and a full OCI-OEI remeasure every 18-24 months.



“Our profession brought in Human Synergistics as we were going through a merger," said Richard Rees, FCPA, FCA, former president and CEO of CPABC. "We knew that this would be a trying time for our employees and wanted to help them move through it in a positive way. It's incredibly gratifying to know that our engagement strategies established a new corporate culture that resonates with our employees and supports their success and well-being.”

Source: The Chartered Professional Accountants of British Columbia (CPABC) Recognized for Excellence in Corporate Culture


The framework, language, and understanding gained through implementing the OCI-OEI will help leaders, integration teams, and other subgroups practice and demonstrate constructive behaviors and interact more effectively.

If you would like more information on how to successfully integrate cultures during a merger or acquisition, contact Human Synergistics today.

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Note:

1 Statistics on worldwide mergers & acquisitions, IMAA Institute.

Resources:

Culture and M & A: Theory Into Practice (Germany/USA case)

Building Collaborative Leadership and Culture

Culture Makes the Difference in the Business Objects and Crystal Decisions Merger