Ask the Expert: Cultural Alignment is Critical during Mergers & Acquisitions

A strong, positive culture is a critical part of a successful business — and an even more critical part of successfully combining companies through an acquisition or merger. Jackie Dryden, Savage’s Creative Strategist, talks about the role culture plays when combining organizations.

When merging companies, how do you ensure cultural alignment is a key goal, given that process integration is often the primary focus?

Ultimately, a merger is not just about financial factors – new geographic footholds, new capabilities, new growth and new products. It’s also about creating a new culture, and it’s imperative to place as much attention here as on the financial numbers to get employees on board with the change.

How can companies motivate employees to be excited about a financial merger or acquisition? By helping them understand how the new combined organization will benefit all stakeholders, not just a few. It’s about providing each employee solid reasons for believing in a larger purpose.

What part does culture play in a merger or acquisition?

It’s critical. It’s beyond critical. Culture is one of the most powerful components in determining the success or facilitating the failure of an acquisition or merger. It’s a delicate dance to bring together divergent groups with different styles, procedures and belief systems. Companies must provide their employees with compelling reasons to rally their individual strengths in support of a single, unified purpose.

To make the merging of different cultures successful, employees must be engaged at a level that aligns with their beliefs. The questions of “Why should I want to be a part of this merger?” and “What’s in it for me?” have to be answered.

In any combination of cultures, people on both sides are worried about themselves and their jobs. When a company demonstrates to employees how they can make a positive impact on the emerging culture and become effective influencers, the entire experience is more successful and less stressful for all involved.

What suggestions would you offer to companies seeking to integrate two distinct cultures?

First, before anything else, companies must do the work of understanding their own “Why?” and how that leads to a strong mission, vision and values. If that’s not understood and defined, the leadership cannot determine how to align their purpose with another company’s purpose.

Second, determine a strategy for communicating and building alignment with the merged purpose internally, and then share that story externally. A critical piece for building a solid internal culture is recognizing who the influencers are within a company and ensuring they become the front-line ambassadors for the emerging culture. These individuals may not always be identifiable by job titles or hierarchy – they can be located anywhere within the company. It is essential to identify and enlist these influencers as early in the process as possible.

Most of all, stay the course. Don’t get cold feet and back off the new culture-building plan. Don’t be too eager to dive into the tactics and execution that the culture does not have a chance to take hold and permeate the entire company.