Culture Clash: Overcoming the #1 challenge with mergers & acquisitions


Mergers and Acquisitions have now been cited by Goldman Sachs as the primary global growth strategy for large-cap companies. The last twelve months have seen the return of the strategic inquirer, with blue chip companies driving deal frequency and volumes not seen since 2007 and 2008. Yet, almost religiously, study after study shows that mergers and acquisitions fail at rate of 70% to 90%, leaving massive intellectual, creative and financial currency on the table.

The number one reason for M & A failure? Culture clash.

And a decades long flawed strategy titled “integration.”

Here’s the unspoken truth accompanied by the predictable chain of events.

An M&A is an arranged marriage.

  • There is no love at the beginning.
  • The issues start Day One.
  • Executives announce the once hush-hushed M&A information.
  • Employees feign excitement as FEAR ripples through both companies.
  • The C suite announces: “This will be great for everyone!”
  • No one is buying that promise.

A culture of SURVIVAL thinking and behaviors is now in play.

To quiet the fear, a WILDLY FLAWED STRATEGY called INTEGRATION is announced.

Cultural transformation only comes with personal transformation

People Resist Being Changed

In a survey of top leaders by Booz and Company last year 84% said culture was critical to success and yet the majority admitted their culture was in need of a major overhaul. So, how do you transform a culture to meet your company’s needs today? How can you get employees or teams to behave the way you need them to execute your strategies and enhance your performance as well as your employee engagement and the customer experience? How do you get the innovation and agility you need in fast-changing markets? How do you get the cross-organizational collaboration that makes one plus one equal three?

You can do that only by improving the behaviors of people. That’s because culture is nothing more than the collective beliefs and habits of the people in an organization. So in the end, you can only transform cultures by facilitating personal transformation in people.

How to change your organization’s culture

Gerstner Quote

Editor’s Note: This post was a very popular post on Switch & Shift and was adapted to include Edgar Schein’s personal meeting room video.

It’s like being lost in the wilderness if you initiate any major change effort in your organization without specifically knowing how cultures effectively evolve or change. It’s one of the greatest leadership challenges, but few truly understand how cultures evolve.

Why don’t most people know how cultures evolve or change?

Culture is a hot topic and it’s all over the popular press whether it’s guidance on “creating” a great culture or coverage of the latest culture crisis.

Values: It ain’t what you do, it’s the way that you do it

The Fun Boy Three & Bananarama

In the last twelve months, the topic of values has caught the imagination. Putting values at the center of everything your organization does can make all the difference in engaging and motivating employees and customers.

It is a year this October since our book about organizational values, THE 31 PRACTICES, was published and I wonder if you’ve noticed the increasing focus on values all over the world in this time.

In the past few days, Israeli Prime Minister Benjamin Netanyahu criticized the White House’s rebuke of his country’s settlement construction as “against American values”.  In UK, earlier in the year, The Mail on Sunday newspaper published an article by David Cameron, UK Prime Minister, about British values and the UK College of Policing published the final version of its new values-based Code of Ethics.  Meanwhile in China, the All China Journalists’ Association recently ordered its journalists to learn “Marxist news values”.

How to bring a culture of health, well-being and performance to life

Runner and wellbeing

Employee engagement is all the rage these days. It should be, considering that only 13% of employees feel engaged by the work they do and that low engagement leads to high turnover, which can cost companies up to 150% of an employee’s salary. But with so many factors involved in employee engagement – job satisfaction, stress, work/life balance, purpose, relationships, physical and emotional well-being – it can be tough to achieve. CEOs and HR leaders at leading organizations are learning a focus on employee well-being impacts most factors critical for employee engagement.