HR Due Diligence Role in Preventing ‘Culture Clash’

Viewing 15 posts - 1 through 15 (of 15 total)
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  • #36443
    Sultan Alrammah
    Participant

    How can we prevent ‘Culture Clash’ in a recently acquired target? Is HR DD solely the answer?

    #51622
    Sultan Fatani
    Participant

    What a great question, Sultan.
    It may be essential to ensure that a true value is being creating, especially post-integration.
    Also, it may be beneficial for the company to have what some might consider as the M&A HR Toolkit.

    What do you think?

    #51663
    Biswajeet Pattnaik
    Participant

    Great question! In my opinion, a detailed cultural assessment of both parties (Buyer and Target) across different functions needs to be executed to identify what kind of cultural integration will help to prevent cultural clash. For a perfect example of what culture clash actually means, watch ‘Emily in Paris’ where a young American female struggles to understand the French culture – 2 hrs. Lunch, Office start time being 10 AM,etc. HR Due Diligence will definitely help to identify the gaps, however a strong change management, an integration team and smart Corp Communications team is necessary for avoiding cultural clash.

    #51779
    Saif Alnaimi
    Participant

    1-Start early. This is the no.
    2-Be clear on the value you are trying to achieve.
    3-Define the end state for culture.
    4-Conduct a culture assessment during due diligence.
    5-Pay attention to all decisions being made.
    6-Focus on emotions.
    7-Bring people with you on the journey.
    8-Be open.

    #51900
    Abdullah Aziz
    Participant

    Above what already mentioned, aligning the overall strategy and efficient communication will help prevent any potential culture clash.

    #51966

    Setting an overall HR strategy prior execution to ensure smoother transitioning. Most importantly, the HR principles/management should have flexibility to adjust some aspects while ensuring to keep the work/productivity unaffected. I think the nature of M&A transactions should experience such cases, however it should be managed promptly.

    #52846
    Christopher Twible
    Participant

    I agree with Saif. Got to define, be open and transparent and anyone who doesn;t want to be on the bus, get them off.

    #55491
    Kim Morrison
    Participant

    There have been some great replies to this post already. Empathy is key! Put yourself in the acquired company’s proverbial shoes. Understand their process, conduct an assessment, identify the similarities and differences, have a clear vision and strategy that is developed together. Communicate until you think you are done and then do some more.Transparency, clarity, timelines, topics, impact, end goal, the individual employees role in ensuring the company’s success.

    #55496
    Ebrima B Sawaneh
    Participant

    Saif made an excellent idea. I would that you need to understand the policies. You may recall the M&A of Air India and India Airlines. Part of the problem was a different payment system that was never integrated hence it created a mindset of “different classes” of pilots.

    In answer to your question, No HR DD will not resolve everything. Sometimes the leadership that takes over the new company matters too. HR DD may show potential issues and possible solutions, but if the leadership follows, the HR DD is will be of no use.

    #55688
    Karen Mildenhall
    Participant

    Great question! I’ve found that every deal will have some culture clash. The question is, how much is too much?

    All respondents pointed out critical pieces to the equation of managing the clash. It starts with the executive leadership team. If they have unhealthy conflicts, then the deal value erodes very quickly. Leaders set the pace, show what is essential, and model the go-forward culture.

    #56124
    Megumi Hida
    Participant

    Great points have been already made above! From my personal opinion as HR consultant, many companies fail to define end-state as integrated operation during the deal phase. Many of them only realize that they do not have goal image when the deal is closed. It is important to have dialogue/ focus session between management members to facilitate the discussion and identify the ‘to-be’ state of the post-close organization.
    At the end of the day, HRDD only identifies the ‘current state’ of the target.

    #56280
    Roberto Landa
    Participant

    The culture of the organization must be revised, and HR policies revisited as necessary. Clearly communicated to the organization, change must be implemented in a short period of time to avoid losing momentum and people being absorbed into the old system. The message from management must be clear to all employees and compensation and performance must also be linked to the culture change that is targeted for change

    #70704
    Meg Ver
    Participant

    I don’t think that HR Due Diligence can alone prevent culture clash. If a seasoned and well established market leader acquires a start up, we will see lot of differences between the way how each company operates. Start-up was focused on innovation and causing disruption and emerging well in the market which prompted acquirer to acquire it. May be target company does not rely heavily on big documentation, they do not follow old software methodology where there are multiple people performing redundant responsibilities like an office of PMO, portfolio management or Agility management. They are used to the way of being agile and put the product fast on the market. This difference in way the companies operate can cause clashes where the target might feel they are operating in next gen capabilities while the acquirer is sticking to old ways of doing business.

    #71485
    Brandon Lau
    Participant

    Overall I agree, but there are several strategies that could prevent culture clash after an acquisition, HR and senior corporate leaders should recognize and take the lead to implement before/after the acquisition:
    • Analyze cultural differences before the acquisition happens
    • Communicate and listen to employees
    • Define and implement your new culture
    • Celebrate and embrace change

    #71543
    Joshua Tan Lien Hoe
    Participant

    Culture of the target to be included as one of the factors in considering whether to proceed with the deal

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