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Allan Stewart

 When Cultures Collide

   by Allan Stewart, B.Com, MBA

Any organization that has gone through a merger has probably spent a lot of time and money ensuring that the “numbers” of the new organization will work. In contrast, few bother to look at what will really makes the new company successful – the people.

Organizations are made up of individuals whose combined attitudes, values and beliefs create an organizational culture that is unique to all others. When organizations merge, two cultures are thrown together, and that could result in a collision that will eventually destroy the new company.

On paper, many mergers make good business sense. One of the “textbook” reasons for business mergers is to utilize the strengths of both original companies to create synergies for the new organization. Yet, initially at least, mergers have a negative impact on the new organization. According to The Financial Post’s book, 100 Best Companies to Work for in Canada, it takes three or four years to “re-establish a working environment that employees would characterize as excellent.” In the mean time, “productivity goes down” and “the merger (has) a negative impact on employee morale.”[i] Worse, at the end of this “getting acquainted” period, the resulting culture might not be the one that senior management wants.

“When organizations merge, two cultures are thrown together, and that could result in a collision that will eventually destroy the new company.”

Senior Managers can make one of two decisions. They can wait the three or four years for “nature to take its course” or they can take control. 

Controlling the process involves a number of steps:

1. Measure the culture of the two original organizations. Human Synergistics Organizational Culture Inventory™ (OCI) measures the actual culture (the expected shared attitudes, values, and beliefs) against an Ideal one. Culture is measured around 12 styles. These 12 styles can be split into a number of clusters. First, there is a task vs. people split, then a satisfaction vs. security one, and finally a constructive vs. a defensive split.

2. De-brief each original organization on their existing, pre-merger culture – its strengths and weaknesses. This will help each side understand their culture, as well as what they are bringing to the table.

3. Share the results of both surveys with all parties. Understanding the other party’s culture vis-a-vis your own is the first major step in constructively merging them.

4. Decide on an Ideal new culture. Defining the new Ideal is easier than it appears. Human Synergistics research has found a positive correlation between Ideal cultures (high in achievement, humanistic-encouraging, affiliative and self-actualized orientation) and such outcomes as employee engagement and product quality.

5. Develop an action plan to have the new organization work towards the Ideal culture. There are several Causal Factors that have a direct effect on culture – leadership styles and practices, Human Resource systems, organizational and job design, the mission, philosophy and values of the new organization. But all of these factors are directly influenced by the leadership team.

An organization’s culture evolves over time or it can be directed by the management team. Many leaders who see shortcomings in their present culture often delay tackling the problem. Leaders who ignore culture during a merger, do so at their peril. Mergers can serve as an ideal catalyst to initiating cultural change because most people accept the fact that they are going to have to make changes.

Allan Stewart is the President of Human Synergistics Canada and has been helping organizations change their cultures for over thirty years. He is considered to be a leading expert on organizational culture, its causes and its outcomes.

[i] * Eva Innes, Jim Lyon, and Jim Harris, The Financial Post 100 Best Companies to Work for in Canada, (Revised Edition), Harpers, Collins Publishers Ltd., 1990. Page 1.