The most significant danger for businesses when merging is ‘Not’ to think about how do we bring two very different cultures together? They want to capitalise on each other's strengths but fail to investigate cultural compatibility beforehand.
Let's be honest; most mergers fail from a cultural point-of-view; Why? Cultural differences, mainly or more simply, strategic differences haven't been thought through properly, so, fault-lines start to appear, and tensions often engulf the pre and post-merger.
Culture often falls into two categories. 'Locked' or 'Loose.'
'Locked' company culture is based on routine and has little or no patience for unruly behaviour. They like to uphold cultural traditions. 'Loose' culture values are fluid in their approach. They generally bypass the rulebook, actively encouraging new ideas with free-thinking. 'Locked' cultures, however, have a predictability about them but are less adaptable. 'Loose', however, tend to be open, transparent and creative, but are more disorganised. People who have a culture which is loose, mainly follow visionaries and collaborate as leaders—people in 'Locked' organisation desire to work within top-down systems or structures and have unwavering disciplined environments.
How can organisations increase their chances of achieving cultural harmony?
Prepare to negotiate
Have it on the table; you have to be prepared to negotiate culture as you would, price and financial terms.
Start with conducting cultural assessments to understand what gets people through each day. The evaluation should determine the pros and cons, as-well-as opportunities and threats posed by merging cultures. Are we enhancing or harming? Above all, the outcome should identify areas for compromise.
Once merging organisation better understand each other's cultures— either 'Locked' or 'Loose', only then can they develop a cultural integration plan. An articulation of this plan determines who is 'Locked' and who is 'Loose'. The merger must create a gateway for mutual input, in how each company shifts to help with long-term success.
Share the vision
Speak with people. Sounds easy, right, but so often the people within an organisation get over-looked because negotiations fixate only on financials and policies. Communicate with people from the start. Being open with people will gain broad acceptance for any proposed changes and will help minimise the threat people feel from new ways of working. It will be natural for people from a 'Locked' culture to feel insecure because they are losing control, and people with 'Loose' culture may feel the change threatens their autonomy. Either way, leaders need to become ambidextrous – or demonstrate the value of being both and work to address employees' underlying fear of change.
Culture is beta mode
Finally, business always has to be prepared to evaluate its strategy, because every foolproof plan will have issues. Going into a merger without a cultural idea of what you want or where you think you're heading is business suicide. Easy as you go—Prototype new ways of working slowly across small areas of the business, first. It will allow the organisation to embrace trial and error and prototype new ways of working. Test and build the future with employees, so they become co-creators, don't merely dump culture on people with internal communications—they won't like it.
Be it a friendly merger, or a hostile takeover. Corporate mergers are unpredictable and scary for people. Understanding culture goes some way to determine their success.