Blog: The cultural disjoint

Culture

The cultural disjoint

Even the well-thought arrangements in mergers and acquisitions can lead to discontentment in employees
The cultural disjoint
 

There is no good or bad culture, it is about getting the right blend of culture which can drive productivity

 

In the profession that I am in, a major share from my already packed schedule goes into placating anxious employees. However, from a range of concerns that I have come across– right from a dysfunctional reporting relation or a perceived unfairness to a dispiriting nature of work, the one which leaves me astounded is when it is because of a recent takeover or a union. It is difficult to comprehend how a well thought arrangement made by the top notch talent can lead to discontentment.

It was after reading and witnessing several stories of futile deals, that I realized, what creates resentment is not the deal in itself but the lack of execution post one. In the current landscape of an increased appetite for risk, the chances of each one of us being part of an organization going through some sort of integration has increased multifold. Economists state that the gamut of mergers & acquisitions is spread over $3 trillion, which is equivalent to a country in itself.

While more and more organizations are moving towards M&A as part of their business strategies, they are finding it difficult to realize the complete gains from the deal. If you read through the pages of any writings on “unsuccessful M&As” you will realize that the disaster quotient is always higher in dealings where the people factor has not been taken care of. Be it the failure of $350 billion worth merger of AOL & Warner or an opportunity cost of $13 billion market capitalization paid by HP- Compaq alliance, the history has innumerous such tales of despair.

With organizations that are different species in themselves deciding to come together, the integration of culture is just starting to get more complex.When it comes to finding the right concoction for running two engines on same tracks, there are no set rules for this game.  The catch lies in fixing the problem of ‘culture’which is not as objective & tangible as a cost matrix. By culture, I mean nurturing the amalgamated environment in terms of leadership style, employee experience, shareholder value and customer delight.

McKinsey has a simple approach towards defining culture — “the way we do things around here”. Outlining culture in lines with the set of management practices of the organization provides a defined metrics for tracking the success of integration. The 3 key dimensions in this direction are:

1. Leadership styles: Most disintegrations arise when there are conflicting styles of leadership at play. Beware of “A centralized power house of leadership style vs. a community oriented inclusive style.”

2. Operating environment: It is the workplace environment which takes the shape of culture. A hard collaboration is “A collaborative, open, proactive environment vs. a process driven, bureaucratic, rigid environment.”

3. Appreciate the implicit drivers for employees: Value orientation, performance measures, employee policies and customer focus.

Once you have a grip on these elements, the simple intervention is to achieve alignment of the top team on what to continue with and which ones to let go. The result of the alignment should serve as the guiding principal for the next course of decisions on organization design, talent assessment, communications and governance framework.

Here are simple tricks of trade to keep in mind when you are signing the deal:

· It is not about your instincts & intuitions

· Don’t leave it for the end

· Start by redesigning than compromising & adjusting

· Spend more time in talking to employees than on the drawing board

Remember there is no good or bad culture, it is about getting the right blend of culture which can drive productivity. Making culture integration as part of the overall strategy, focusing on the intangible drivers, and realizing complete alignment at leadership will contribute in achieving the desired synergy.  

 

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Topics: Culture, #MergersAndAcquisitions

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