Harnessing The Power Of Culture In Mergers And Acquisitions
May, 12th 2016
There has certainly not been a shortage of merger and acquisition activity in the US over the last couple of years. Organizations continue to find growth strategies that keep them competitive in the rapidly evolving business landscape through M&A activity.
2015 was a banner year, coming in at an estimated $5 trillion (with a t) in deal value emanating from activity. And this trend is showing no signs of stopping in 2016, with recent announcements about Alaska Airlines acquiring Virgin America, and Comcast buying Dreamworks Animation. Consolidation seems to be a viable strategy for many leaders in a variety of industries, as Jeff Golman’s article from January explains.
The decision to drive strategic growth through M&A can certainly be alluring. The numbers often drive a pretty hard argument. But as anyone who has experienced the reality of a transaction knows, the road to living up to financial expectations of a merger or acquisition can be fraught with any number of land mines. And one of the more overlooked derailing factors to consider is organizational culture.
I get quite a few calls from business leaders who are several months (or years) into an integration of an acquisition. In hindsight they realized that they failed to adequately understand the power of culture in the success, or failure, of a deal to achieve its intended targets. The overwhelming majority of these calls is after the deal is done, integration has failed to achieve results and those left behind are struggling to figure out how to turn things around.
These same leaders usually take a very different approach in the future by taking the time to use organizational culture much earlier in the process as one (of many) indicators of future success or failure.