Identifying PMI cultural challenges during due diligence
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It can sometimes be difficult to assess a company’s true culture (beyond those that may be obvious due to geography, etc.). So, I’m interested in learning what best practices others have used for the early identification of real or potential cultural challenges through the due diligence process.
One best practice would be to identify the key value drivers of both companies and determine how they align or not align and what the impact would be in a merged environment.
I think it is helpful to use the model of matching workstream leaders as early as possible during the PMI process. Allow them time to get to know each other on a more personal level. Get to know not just their role or function, but what their motivations are and what they aspire to. Trust is a powerful attribute and developing trust with integrity will build a strong bond. I believe generalizing the culture at too high a level is often how we miss what the true culture of the entire organization is.
There are different cultural assessment frameworks that can be deployed such as:
– Cultural Value Assessment (CVA)
– Organizational Culture Assessment Instrument (OCAI)The Cultural Value Assessment (CVA) a simple method from Barett to capture current and expected value of the workforce while mapping it. The Cultura Value Assessment allows to map the current personal value of the employee, the corporate value perceived and their desired cultural value. The analysis is performed on a 7 levels gathered in 3 groups: foundation, evolution and impact. The framework easily allow to compare the 3 items between 2 companies. It give rises to a cultural alignment, cultural entropy, balance index, organizational perspective, the potentially limiting values, and the new value to focus on
The Organizational Culture Assessment Instrument (OCAI) allows to identify the dominant culture, the gap between present and target cultures, the strength of both and paves the way to a smooth cultural change. It provides a method to assess the organizational culture through the Competing Value Framework. Hundred points are distributed across the 4 competing values which correspond with four types of organizational culture. The 4 organizational cultural types:
1. Adhocracy culture: the dynamic, entrepreneurial Create Culture
2. Clan culture: the people-oriented, friendly Collaborate Culture
3. Control culture: the process-oriented, structured Control Culture
4. Compete culture: the results-oriented, competitive Compete Culture
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