Only a small proportion of companies take account of organisational culture differences as part of their integration plans for mergers and acquisitions (M&As), according to feedback at Mercer’s M&A Ready™ workshops attended by senior Human Resource (HR) leaders globally. Just 25% of respondents said their company had any type of process in place for dealing with culture issues to ensure better business integration results.
Despite this, most companies appear to have strong awareness of culture and talent issues in M&A situations. When asked about the risk of top talent leaving their organisation following an M&A transaction, virtually all attendees said they were concerned about it, and nearly half (46%) said they were “very concerned” (see Figure 1). “People issues” in M&A situations also appear to be growing in importance in the minds of attendees: nearly two-thirds (64%) said that people issues are more prominent today than they were one or more years ago (see Figure 2).
The responses confirm anecdotal evidence from Mercer’s M&A consultants. Peter Baynham, UK Head of M&A Consulting at Mercer, commented: “Many organisations recognise that a clash of organisational culture can be a barrier to successful integration. The problem is, they often don’t know what to do about it. They often don’t have the tools or techniques to know where to start.”
Mercer advises companies to focus on four critical steps for early integration success:
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Discover and define direction - Engage senior leaders early in the deal to define and agree on the culture necessary to deliver deal success
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Dig deeper - Understand each other's "way of working" - similarities, differences, risks and potential success derailers
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Determine drivers and deploy - Identify a series of drivers to reinforce the behaviours necessary for success
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Determine traction - Track and reward progress; monitor success of culture alignment over time.
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