and.

The Impact of Culture on Acquisitions

The past 28 years have borne witness to a blending of four generations from the global community into a single workforce with a rainbow of backgrounds, knowledge, and culture.

The very word “culture” strikes fear in the hearts of leaders. It’s hard to describe and has a touchy-feely connotation that scares some people. They are afraid of revealing themselves as weak or emotional beings.

In fact, culture has very little to do with emotions or feelings and everything to do with beliefs, customs, values, ethics and morals. What could be more important to a business than having a workforce that shared the same sense of those attributes?

The merger and acquisition failure rate in 2005 was 91%. Less than 1 in 10 mergers were deemed successful by the people initiating them - - a staggering number when you consider the cost. The No. 1 reason cited was a failure to consider culture when integrating two businesses.

For businesses throughout America, culture plays a vital role in their success or demise.

THE PROBLEM

Hard feelings and poor execution occur when two groups of individuals with different cultures are tasked with working together without any help overcoming their cultural differences. If one department is focused on risk avoidance and the other on taking risks, friction is the only option they have.

This is why a good understanding of culture is critical to leadership, management and staff, and why cultural training should be part of every organization’s orientation program regardless of size.

Many opportunities for cultural conflict exist.

• A culture of stability vs. one of change

• A culture of sales vs. one of customer service

• A culture of price vs. one of availability

• A culture of technological sophistication vs. one of dependability and familiarity

• A culture of benefits vs. one of entitlements

• A culture of command and control vs. one of hands-off management

Culture is about how we look at our business, our roles within them and our obligations to them.

When culture is a low level priority, turnover and customer defections rise. Politics creep into the workforce, and people begin to play power games. Focus shifts from doing a good job to winning the battle of how business is done.

It becomes a battle over who will have control instead of a clash with the competition by fighting with solid business practices. It devolves into an argument of style over substance. An argument about the “how” is often subjective and can never be “won” by either side. It can only be forced down the dissidents’ throats by leadership regardless of their feelings. This does not lead to positive morale, collaboration, or harmony; it leads to the death of good ideas and the best employees bailing out for a healthier environment.

Symptoms of cultural conflict include the inability to execute in a timely manner, lack of involvement from all executives, poor or non-existent planning or follow-through, duplication of assets or functions, and low productivity.

THE SOLUTION

The good news? If you are suffering from any of these symptoms, you’re not alone. Even better, the solutions are relatively simple, although not pain free. First, you must decide define the culture you want to create.

Every situation calling for cultural change has a common truth. one-third of the staff will welcome a shift, or clarification of culture. I call them the vocal supporters. One-third will be vocal dissenters and work hard to undermine any efforts to change the culture they have grown comfortable with regardless of its degree of dysfunction. And the remaining third will be the silent dissenters, the people you must win over. They are skeptical of change and tend to shy away from it; however, they are reluctant to state their position because they want to be on the winning side. If you focus on the vocal supporters, you can demonstrate success with the silent dissenters and win them over and isolate the vocal dissenters. They will eventually leave or adapt to your new culture.

DEFINING YOUR CULTURE

Culture begins with a common understanding of the values you stand for and the way you demonstrate those values. Bring your thought leaders together and select three to seven values you can all agree on. Share those values with the entire organization and use stories to demonstrate exactly what they mean in your business environment. It is critical that leadership and management demonstrate those values without fail.

Then you must define a mission that describes the value your organization delivers to its clients and who those clients are in the simplest, most basic form. This is the touchstone you use for all your communications, both internal and external. It is what every job must be designed to achieve to one degree or another. You must measure the value of each employee by the degree to which their efforts support the delivery of that value to those customers.

Then look at your job descriptions and focus on goals and responsibilities, not just roles and obligations. Design performance-based objectives and build performance reviews around them. Make reviews something your staff looks forward to, not because it means a raise, because it means they are going to learn what they can do to be a stronger contributor to the success of the organization.

Educate leadership, management and supervisors on how to manage to those performance objectives, and develop strong communication models to ensure information is shared throughout the organization in an easy, non-competitive manner. Without information, your staff is flying blind. Once staff understands how their efforts contribute to the overall success of the business, regardless of how critical or menial their job is, they will be motivated to perform - - no one wants to be on the loosing team.

Once you have your culture stabilized, your entire staff can work as a single unit with focus and determination. Creativity will flourish, and political jockeying will end. It’s not complicated, but it’s not easy, either. If you can fight your way through the battle to create a single culture among your staff, you are well on your way to unlimited success.

Author:.

Larry Mandelberg is a business consultant specializing in helping entrepreneurial companies through the go-go stage of development and become professional organizatoins.

With over 30 years experience as CEO and consultant, Mandelberg has has launched 4 start-ups, led a merger, and headed a successful turn-around. He is a frequent speaker at business events throughout the western U.S. Larry has been writing his 'Eyes on Business' column for the Sacramento Business Journ...

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