How Culture Operates – First 3 Months of a Merger

 

This post is by Jerome Parisse, originally published on the Walking the Talk website.  It is one in a series that Jerome and I are putting together to introduce a unique Culture Masterclass for M&A Executives, developed jointly by Isely Associates International and Walking the Talk. 

Two organisations come together

Each group gets to see what the other looks like.  Specifically what you see are the behaviours, symbols and systems of the other organisation. They may look like you, even talk like you.  On the surface they may be in the same business, and therefore undertake the same activities.  But very quickly you will notice that they are not the same as you.

Of course you will have heard some information already about how the other tribe operates.  Some of your members will have been involved in due diligence activities, or planning for the future acquisition.  Others may have worked there previously in their career.  Perhaps the other tribe was a past competitor, or someone you met at industry functions.  They might have been a customer, or a supplier.  You may share a parent, and be two divisions of the same group.  They will have a reputation regarding how culture operates, and you will know what it is.

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How to Manage Emotions in Mergers

 

This post is by Jerome Parisse, originally published on the Walking the Talk website.  It is one in a series that Jerome and I are putting together to introduce a unique Culture Masterclass for M&A Executives, developed jointly by Isely Associates International and Walking the Talk. 

Mergers are a unique situation culturally. 

During a merger or acquisition you have to manage culture in a different way.  Mergers accentuate cultural issues, which might have simmered along unnoticed in a ‘business as usual’ scenario.  Anyone who has been holding lingering doubts about whether there really is such a thing as culture will have no doubt after living through the first few months of a merger or acquisition.  Culture will jump up and hit you in the face!

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Put Culture on M&A Agenda from the Start

 

This post is by Jerome Parisse, originally published on the Walking the Talk website.  It is one in a series that Jerome and I are putting together to introduce a unique Culture Masterclass for M&A Executives, developed jointly by Isely Associates International and Walking the Talk. 

 

Senior executives and deal team members are best placed, but often under-prepared, to drive effective cultural outcomes.

Environmental cues for expected behaviour

Culture – “patterns of behavior encouraged or tolerated by people and systems over time” – is created from the messages people receive about what is valued in an organisation. And these messages come from three different channels: behaviours (what is role modeled, our actions), symbols (those small things that send a strong message, such as how a business spends time and budget), and systems and processes (anything from budgeting to performance management, measures of success, promotions and talent management).  Decisions made send a message via one or several of those three channels. Continue reading

Cultural Diligence in Mergers: Make it a Priority

Make cultural diligence a priority to ensure that culture enables, rather than detracts from, merger success.  These fundamentals, reinforced in content from earlier posts, are crucial in the strategy and early deal stages.

Start with culture capability

How do your executive and deal teams stack up on culture capability basics? If you can’t answer and emphatic “yes” to the following four questions work remains to be done.

  • Can every team member articulate clearly your organisation’s business strategy?
  • Can every member articulate clearly your deal rationale, strategy and approach, in the context of the business strategy?
  • Is there at least one deal team member that can communicate effectively with the others about your own organisation’s culture – current situation and future desired culture?
  • Does everyone on the team understand the effect organisation culture will have on business and deal outcomes?

It is important that deal team members know what to look out for culturally – ideally before any interactions between deal team members and a potential partner take place, Continue reading

Merger Integration: Choosing the Most Effective Culture Strategy

In the heat of a deal, too many organisations leave culture to chance because they mistakenly think that they can’t (or shouldn’t) make decisions about it until a deal has been completed.

Certainly I’m not suggesting that every detail be carved in stone before close, but having a clear view about where you’re heading and what type of culture will support expected business and deal outcomes will both smooth and quicken post-merger integration.

When time is money, it pays to prepare.

What do we mean by “culture”?

Generically, many would say culture simply is “how we do things around here”. As described by my colleagues at Walking the Talk Pty Ltd, culture is “patterns of behaviour that are encouraged, discouraged and tolerated by people and systems, over time”. Continue reading

Culture Strategy in M&A: Where Context is Everything

It may seem the obvious thing to do, but many organisations undertaking M&A do not effectively articulate and communicate the business case that underpins their decision to merge or acquire. Often this results in unexpected business and cultural outcomes.

Only by understanding overall business context and deal rationale is it possible to develop and execute a coherent culture strategy aligned to realizing value from a deal, as well as enabling future business outcomes for a combined organization. Continue reading

Culture Impact Trumps Culture Fit in Mergers

 

The most effective work on culture begins well before a deal is in full swing. With thoughtful preparation, a clear strategy and commitment to cultural alignment, organisations can improve their odds of achieving expected merger outcomes.

Merger Cycle

Most organisations start thinking about culture in earnest after a deal is signed or closed. Others, only when people start leaving the business – especially when people they want to keep start leaving in droves. All too late. To improve the chances of merger success, it is critical to have culture on the table well before diligence begins.

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M&A: How to Avoid Culture Clash

This post is by Jerome Parisse, originally published on the Walking the Talk website.  It is the first in a series that Jerome and I are putting together to introduce a unique Culture Masterclass for M&A Executives, developed jointly by Isely Associates International and Walking the Talk. 

Every merger or acquisition is undertaken to enhance business value, yet many fail to achieve expected outcomes because of a failure to effectively manage cultural risks and harness cultural opportunities. Data shows that up to 50% – 70% of mergers and acquisitions fail to achieve expected returns. In most of these underperforming deals, culture clash is at the top on the list of reasons for failure.

 

It does not have to be like this.

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How to start

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