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Great company cultures start with listening too — listening to employees, middle managers, customers and senior leaders. During a significant change like a merger or acquisition, listening, architecting and integrating the emerging culture is critical for maximizing the value of the deal. Organizations that thrive in today’s complex business environment benefit from dynamic, robust cultures.
Our three phase Cultural Brilliance™ System helps two different companies come together to form a culture that works together well. By executing this five step process, executive leaders retain and increase the value of their business during mergers and acquisitions.
Why Does Integrating Culture Matter?
Organizations recognize that culture is really important and are searching for better and easier ways to create the kinds of cultures that support their business goals. Those that continue to think that handling their culture is optional are going to lag behind their competition.
According to a Deloitte survey, 43% of CFOs named post-deal integration a top concern. In the latest Human Capital Trends Report of 2016, Deloitte cited that fewer that 1 in 3 CEOs understood their own organizational culture. A 2004 Mercer survey revealed that 75% of executives cited “harmonizing culture and communicating with employees” as the most important factors for successful post-merger integration.
A 2011 global survey conducted by Aon Hewitt uncovered that unsuccessful cultural integration was the number two driver of deal failure. The number one driver of deal failure was “integration/implementation took longer than expected” which in and of itself is adversely impacted by unsuccessful cultural integration.
On the qualitative side, culture is a significant organizational driver, both positively and negatively. What’s hardest to see, quantify or examine often holds the most power in an organization. Culture can encompass how companies communicate, how people and teams relate, how conflict is handled, organizational beliefs, mindsets, emotions, and how events are interpreted – all of which influence how problems are solved and decisions are made.
Without successful integration, likely outcomes include: mediocre, at best, decisions, problems solved with band aide solutions, and the exit of good talent. And the bottom line value of the deal is adversely impacted.