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Defining work culture when two different cultures are forced to merge

(EDITORIAL) Mergers and acquisitions bring a myriad of challenges on their own, but the biggest challenge typically comes when two different work cultures are required to become one.

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Mergers, Acquisitions, and Culture

There are a LOT of articles that point to culture as the reason that so many mergers and acquisitions fail. This (as you might have guessed) makes sense to me, but I do ask myself—if we know this, then why isn’t it getting better? There are articles from 10 years ago that point to this, as well as articles from last year. What are we missing?

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The short answer: we don’t really know what culture is.

Not culture according to Mirriam-Webster

And I don’t mean that in a “culture is hard to define” kind of way. I think culture is fairly easy to define, actually. Yes, it’s complex and can be hard to change because it has a lot of moving parts, but it’s not like we don’t know what it is (it’s the words, actions, thoughts, and “stuff” that clarify and reinforce what is truly valued inside an organization).

But the mergers and acquisitions that don’t produce as much value as everyone thought they would aren’t failing because they can’t define culture. They are failing because they players don’t understand the true cultures of the two companies in the first place.

For example, this Forbes article talks about the recent Verizon acquisition of AOL, and warns, Verizon is all about engineering while AOL is “more creative, more salesy.” No way those two can come together well without some intensive therapy.

No.

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Sorry, I do know where that statement is coming from, but it is too high-level to be useful. If AOL were equally an engineering culture would you be less worried about the success of the merger? I wouldn’t. I was talking last week to someone who does a lot of mergers, and she said that frequently the apparent cultural alignment of the companies in question is sold (on the front end) as a good reason for the merger, yet lo and behold, when the deal gets done, cultural roadblocks suck out a lot of the value.

Culture is more subtle than “engineering” or “creative.”

Yes, you can skew in one of those directions, but if that’s all you’re going to measure going into this, you’ll fail. One of our clients engaged us to run our Workplace Genome assessment on their company, in part because they had recently acquired another smaller company in a different location, and they wanted to see if the two cultures were integrating well.

Of all the questions we asked around the 8 culture markers we measure (agility, innovation, collaboration, transparency, growth, inclusion etc.), the HQ and the new location varied only by 8%. But we dug a little deeper, and uncovered some more interesting stuff.

It turns out the most stark differences in terms of how the two groups were experiencing the culture were around transparency and growth (as in personal/professional growth and development). And we gave them some deeper cuts of the data that pulled out even more nuanced distinctions. Armed with that richer data, the internal culture team that we helped create was then able to make concrete internal changes that helped to integrate these two cultures more effectively.

We don’t need high-level assessments of cultural fit. We need data that generates actionable insights.

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[clickToTweet tweet=”We need people on both sides of mergers making real changes to the way they do things to capture value” quote=”We need real people inside both organizations making real changes to the way they do things in order to capture the value of the merger.”]

Stop trying to do this work with just a small part of the information you need. Roll up your sleeves and do the work. Your employees (and your shareholders) will thank you.

#MergeCulture

Written By

Maddie Grant is author of Humanize and When Millennials Take Over, and is Founding Partner at WorkXO, a culture startup that helps forward thinking leaders in growth oriented organizations activate their workplace culture to attract the right talent, increase engagement, and unleash human potential through the Workplace Genome™ Project.

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