Culture themes

Your culture in a merger

The challenge

A merger not only brings together two or more organisations, it brings together multiple - and unique - cultures. It’s a high-risk situation. Studies show that in 50-70% of cases where mergers dilute value, the cause is a failure to successfully manage the culture. So how do you unite these in order to construct a strong culture for the new entity? How do you manage culture in a merger?

Corporate culture | Mergers

Recognise the risks

  • A merger is a sudden cultural shock which requires expert and active management if you are to succeed. Mergers can often accentuate cultural issues which may have been tolerated in less pressurised situations.
  • Executive focus tends to be on how to integrate the systems, products and processes of the businesses. But taking the time and energy to understand the culture of each organisation –which elements to protect and which to adapt to deliver the merged business goals – is just as vital.
  • It’s natural for people to be worried and expect rationalisation. In such situations, the other organisation can be demonised as the enemy, so you may need to focus on managing how people feel throughout the process. Remember however, addressing the happiness of your workforce is not the same as managing your culture.

Action checklist

  • Think about having at least one person with culture management expertise on your Merger Team. It’s a good place to start.
  • Be clear about each organisation’s current cultural strengths and weaknesses and set a well-defined target culture for the merged organisation. Do your cultural gap analysis in order to fully understand the task ahead.
  • Provide space and time for the organisations to understand each other and build respect. Facilitate communication and information sharing across the teams.
  • Train your managers on how to manage culture. It will stand you in good stead, not only through the merger, but as a continuing business management capability within your business.

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