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Many believe that organizations have to continually reinvent themselves in order to keep up with all that is changing around them. They point to the fact that those who cling to the status quo eventually die or are acquired by those who don’t, and they often – quite proudly – point to themselves as the poster child of what effective organizational change looks like.
All is not what it seems, however.
The truth is that whether organizations …

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The Merger and Acquisition of Organizational Culture

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people-merger-2Organizations would love to have their cake and eat it, too. They’d love to obtain the changes they want without having to change the culture to do it. That’s because changing the culture is so much more difficult and time consuming. In other words, they’d love to get the benefits of change by keeping the status quo.

A good example of this can be found in acquisitions. When one company buys another, the fact that the two organizational cultures will be thrown together can be overlooked. It’s assumed that the homogeneity that’s negotiated at the top will cascade down into the workforce in general. The fact is that these things don’t happen accidentally. They, too, have to be part of the overall design.

A good example of how this can happen is when a US firm buys a British company. It was the great statesman Sir Winston Churchill who said that these two countries were separated by a common language. The cultures are very different, too, and driving on the left side of the road is the least of them.

For example, America as a nation is more informal and gregarious; and almost everything it owns tends to dwarf its counterpart in many other nations including Britain. This should come as no surprise. The country has 40 times the land mass as the United Kingdom, but only six times as many people.

When these cultures are brought together, sparks fly; but only on the American side. They talk about how long it takes the Brits to do something, the famous “stiff upper lip,” and the British reserve. Funny thing is that it’s that reserve that keeps them from emitting sparks of their own. If pressed, they’ll point out that Americans tend to “shoot first” – to take action, and “ask questions later” – that is, evaluate what went wrong after it does, instead of adopting a more cautious approach that might have prevented it in the first place.

Perhaps the most galling experience occurs when a US firm tells a British, or any other foreign, company that it has acquired that they are going to teach them how to do business. Unfortunately, this attitude still exists. If it feels arrogant, then it’s only because it is. Imagine being told that yourself by someone at the C-level after running a business of your own for some years. It’s a wonder that as many acquisitions work as do, though that number is nothing to write home about.

Acquisitions

It’s worth thinking about the word acquisition. It means that you’re doing more than simply gaining another company’s assets, expertise, or customer base. It also includes its workforce and with that, its culture. It’s naive in the extreme to think that you can get one without the other.

Since you now know, or have been reminded, that you’re acquiring another culture, you need to think about how you will merge the two.

Mergers

When we talk about acquisitions, we usually think about mergers as well. The exception might be if the company you bought was “imported” lock, stock, and barrel into a holding company and then allowed to carry on as before without any interference from you. Chances are remote that this would be allowed to happen.

How do you merge two – and there could be more – culturally different workforces?

The first thing you have to realize is that the culture of a workforce varies from company to company, and from industry to industry. You don’t have to leave US shores to experience this difference. Think about the contrast among the cultures of New York, Illinois, Colorado, or California. Consider how diverse the attitudes are between native Texans and those who have lived in Wisconsin all their lives.

The second thing you need to recognize is that the merging of workforces is a form of organizational change, and it needs to be treated as such. Here you use the same principles as you would in any other change program.

You also need to think about what you want the final outcome to look like. You must identify the structural impediments that exist and change them, too. Sponsor programs can be particularly effective, where the counterparts from each organization get together and talk about how they did their jobs before the merger and how they will collaborate so that they can move forward together afterwards.

The key thing, however, is not to assume that your way is the best way. You must be willing to listen to what the other side says. This is true even if you buy a failing company. It’s worth remembering that those who succeed do so because they do things that work more often than things that don’t. The margin may not be that big. If you acknowledge what the other firm was able to do, then you’ll get a lot more cooperation from them because you won’t sour the relationship.

If you buy a successful company, then keep in mind the fear that the workforce may feel. Many entrepreneurs cash-out, when a good offer comes along, leaving their employees at the mercy of the new company. If the organization you acquire is doing well, then you can depend on the fact that its culture has a lot to do with it.

Treat them as though you have just adopted them; after all, they are now part of your family.

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Jesse Jacoby
The Editor of Emergent Journal and founder of Emergent, Jesse is a recognized expert in business transformation. He and his team partner with Fortune 500 and mid-market companies to deliver successful people and change strategies. Jesse is the creator of the Accelerating Change & Transformation (ACT) model and developer of Change Accelerator and Savvy Transition. Contact Jesse at 303-883-5941 or jesse@emergentconsultants.com.

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