Home » Culture » The First Phase in the Process of Culture Integration
Jul 11 2018

In a recent post I mentioned most mergers and acquisitions don’t succeed because of a clash of cultures. According to a KPMG study, “83% of all mergers and acquisitions failed to produce any benefit for their shareholders and over half actually destroyed value”. I think the reason is pretty obvious: We get focused on the things we can see and forget those we can’t. Serving new clients is a lot easier to see on a financial statement than is the blending of two cultures.

 

Part of the problem is we don’t know how to define culture.  After a lot of reading and working with dozens of clients, we’ve come up with this definition: Culture is how things get done, fueled by vision, strategies, goals, values, decisions and behaviors. We’ve also developed a process for merging cultures.  We call it the 6 “E’s”:  Evaluate the current state, Engage change agents, Envision the future culture, Elevate a burning platform, Empower people with a roadmap, Excel progress.

 

Today, let’s deal with the first “E” …

 

Evaluate the current state. 

In Joseph Campbell’s Hero’s Journey, he says we’ve been telling ourselves, through myth, religion, theatre and movies, the same story.  It starts when the status quo is no longer acceptable. I believe the transformation Campbell outlines is also true for integrating cultures.

 

To fully understand why the we can no longer live with the status quo, we can assess what Tom Peter’s and Robert Waterman call the McKinsey 7 “S’s”.  First the hard S’s, those parts of the business we can easily see:  Strategy, structure and systems, followed by the harder to spot soft S’s: Skills, Staff, Style and Shared values.  With these 7 S’s as a backdrop, we suggest three steps within the Evaluate the Current State Phase:

 

  1. Align strategies to vision, mission and operational plan.
  2. Assess current environment and the organization’s readiness for change
  3. Identify issues and opportunities that come from A and B.

 

A simpler and more common process might get the same result for smaller organizations. The SWOT Analysis has a management team brainstorm their Strengths, Weaknesses, Opportunities and Threats.

 

The size and complexity of the organization determines the type of tools you use to Evaluate Your Current State.  And whether those tools be the seven S’s, or the simpler SWOT analysis, the key here is to understand where you are coming from before you start your journey of cultural integration.  The tendency is to put “culture work” off after all the other merger activities are complete.  However, we have found that when culture takes a back seat, it later becomes the biggest issue. Start your culture work as part of the overall integration.  While Human Resources or the Organizational Development Departments might facilitate the process, the executive team must champion and model the culture integration process.

 

 

 

 

 

This entry was posted in Culture.