M&A: How To Manage The Clash Of Cultures

 Any merger or acquisition aims to drive profitable growth. However, it is quite often ignored that the success of such endeavours not only depends on time and budget, but on employees’ buy-in for change.

Merging two companies can be a smart move from a business development perspective. However, the most promising deal will fail if the two parties cannot bridge the cultural divide and adapt to the new set-up.

According to estimates, 50-80% of all mergers fail from a business perspective, simply because there is not enough focus on the cultural integration of the two organisations*. Take the merger of Daimler-Benz and Chrysler as an example. The organisational culture at Daimler-Benz was described as “conservative, efficient and secure” while Chrysler was said to be “bold, diverse and creative”. On paper, the two companies could have been a great match. In reality, the integration failed due to insufficient attention to cultural differences.

Nonetheless, successful culture integration or culture change is possible if two guiding principles are kept in mind. Firstly: change needs to be driven from the top. Actively managing change is a leadership responsibility and should not be seen as a “necessary evil”. Secondly: any post-merger integration or change is different. There is no single best way, no secret sauce or golden rule. Companies need to adjust to the specific circumstances and take into account both organisations’ employees, managers and organisational culture.

All divisions need to be included in the culture change

 But how does one change a culture? How can we merge two distinct cultures or create a new organisational culture? Clearly not by simply defining new values, putting up a few colourful pictures and sending out some fluffy phrases. Culture does not happen overnight and cannot be rolled out by pushing a button on executive level. It takes time and needs to evolve within the company – and more importantly: together with the company.