Avoid Culture Clashes After a Merger

Strategic acquisitions can be a great strategy to achieve cost advantages, grow revenues rapidly, or to acquire a set of skills or technology strategic to the growth of their companies.

But too often, acquisitions fail at the 23rd hour. The lack of a comprehensive integration strategy can spell disaster for the newly combined organization.

Here are three things to keep in mind as you plan for integration:

Develop a clear but flexible plan.

Don’t wait until after a transaction has closed to begin thinking about integration — this is an all-too-common mistake that can be easily avoided. Developing a short- and long-term plan for integration during the due diligence phase is a good benchmark. The more major decisions that can be made before the deal closes, the better. Have a team at the ready to facilitate the merging process and put together a timeline of key deliverables and areas of responsibility.

Avoid culture clashes.

Every organization has a distinct culture that reflects the identity of the business. The clashing of two cultures is a common source of integration failure.

Friction is normal during an integration process. Being clear about the intended culture for the merged organization from the outset will help prevent the process from going awry. Before the deal closes:

• Identify the similarities and differences between the two companies’ cultures
• Define the culture you want to build
• Develop a plan to address any points of friction and measure progress post-merger

Prioritize transparency.

Sit down with key stakeholders and address their potential concerns related to the merger as early as possible. Your team’s commitment to the newly formed company can make or break the acquisition.

It’s important to recognize that an acquisition can fundamentally shift organizational roles and working dynamics. Select leaders from both organizations who are enthusiastic about the vision for the merged organization and have the most to add to its growth. Create a timeline for filling C-suite and direct report roles in order to avoid having your top performers poached by competitors.