Reply To: M&A Integration: Culture

#114631

Natalie Trabert
Participant

I had a client that I began working with 18 months after they had acquired a company. The company that was acquired focused on manufacturing and the acquirer was a technology company.
The two cultures clashed. One (the acquired) was what I would call a “control” culture- risk averse, slow to make decisions, lots of standardization, lower-than-market pay, command and control leadership- with a customer promise of predictability and dependability.
The acquiring company had a culture of “best-in-class”- a culture that thrives on innovation, collaboration, competition, expertise. The mindset was “fail fast and fail forward”,
Within 6 months of the acquisition- more than 80% of the senior leadership team had left. Morale was extremely low. The acquiring company employees perceived the acquired company as “old school”- not willing to change, resistant, skeptical- bad attitudes. The acquired company employees viewed the acquirer as reckless, arrogant, not valuing institutional knowledge.
Not only did this result in low morale, silo’s, turf wars, etc…but they lost key customers.
The biggest issue was that they did not have a plan for integration. They were still operating using the branding (two different companies) from before the acquisition- even 18 months after close.
They did not consider how the integration would affect customers let alone employees. The thinking was that they would allow the acquired company to continue to operate autonomously. This however-did not work.

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