HR Due Diligence Role in Preventing ‘Culture Clash’

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Viewing 15 posts - 16 through 30 (of 39 total)
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  • #73197
    Sarah Miller
    Participant

    I agree with many of the points already stated. Our company has taken a light integration approach for the first year which is beneficial in this regard. Things run as they have, eliminating the uncertainty, retention issues, etc. It has hurt us as well in my opinion, so there has to be a balance. I think the biggest thing is that you are there to help them and figure out a way to blend processes as it makes sense. It is definitely important in the due diligence phase to make sure there aren’t extreme differences if the companies will be working together closely.

    #73560
    Nora Sophia Martin
    Participant

    I think, HR DD is the beginning and fundament, but afterwards it’s important to chose the right strategy: There are five different final stages of cultural integration during M&A, which differ according to the degree of change expected by the acquiring and the acquired company. In the framework that I mean from Marks and Mirvis the stages are absorption, transformation, best of both, preservation or reverse merger. I can recommend you all to check this framework for orientation.

    #76885
    Yeonlin Leonard Lee
    Participant

    Cultural clash is definitely one of the key factors contributed to success/failure, think it is better to hire professional HR DD for unbiased approach as over the years the company HR tend to adapted to the company and might not be a unbias as an third party, also the HR might not understand the business enough to provide insightful recommendation in terms of staff relocation/job rotation.

    #77088
    Ashley Hooton
    Participant

    I do not think their is a guaranteed way to prevent “culture clash”, however, the more focus on their during the due diligence process the more likely you are to help prevent this. I do not think this is solely an HR topic as culture starts at the top. It is important that top level leaders at each company are talking about culture and supportive of how the merged culture will look once the acquisition takes place. HR can play a large role in this and help facilitate these conversations, but at the end of the day the top level leaders need to come to a consensus.

    #81125
    Alina
    Participant

    Undergoing now in parallel both the M&A P and the CCMP, I would say the two must go together but as the materials well present this is often overlooked. Change Management done by the book is key to a successful culture integration and all smart leaders and managers should be able to realize this and not underestimate the power of people’s natural instinct of resistance.

    #81298
    Bernold Beckenbauer
    Participant

    From my experience the the culture clash can be prevented by some of the following measures:

    1. Conduct comprehensive HR due diligence to assess cultural alignment.
    2. Develop a strong integration plan with clear goals and milestones.
    3. Foster open communication and transparency to address concerns.
    4. Provide cultural sensitivity training to promote understanding and respect.
    5. Ensure leadership alignment and role modeling for cultural integration.
    6. Implement employee support initiatives and foster relationships.
    7. Continuously monitor and evaluate cultural integration efforts.

    #81487
    Janani Ravishankar
    Participant

    Very important and relevant topic. Any M&A deal is going to be successful only when people involved make it happen. Though it is the era of AI and ML, we still need people to define the algorithm and move things forward. Hence cultural integration is of paramount importance in any M&A activity. Starting early on is the key. Once an organization has identified a potential target, both buyer and seller need to come together to ensure that people aspects are taken care of. Culture forms the foundation in any organization and few things buyer and seller need to keep in radar:

    – Understanding each other’s way of working
    – What are the negotiables & non-negotiables
    – What are things that employees value the most in both organizations
    – Can some common values be identified between the organizations
    – Respectful conversations and activities throughout the M&A activity
    – Considering people at the core of all decisions
    – Minimizing communication gaps at both ends

    #81516
    Jean
    Participant

    While HR due diligence is important in assessing cultural compatibility during the acquisition process, there is a comprehensive “holistic” approach beyond the DD that includes leadership communication, cultural alignment, or employee engagement that is vital for preventing culture clash and fostering a successful integration.

    #83024
    Helen Mitchell
    Participant

    Use DD as an opportunity to learn as much as possible and as a chance to carve out a plan for integration – a key integration objective can be culture assimilation and integration

    #83329
    Jianping Gu
    Participant

    The fundamental of culture clash is interest and value disagreements. In behavior psychology, it’s about to break the habit. Human meant to behave inertially. HR DD is only a portion of preventing culture clash. It can help to reduce the degree of clash or find a suitable way to remedy.

    #83515
    Aaron Chua
    Participant

    While HR DD may be able to provide useful data points particularly if a cultural DD is done, follow through by management in taking the data gathered from the DD phase and incorporate this into the merger integration phase is equally as important in preventing cultural issues from arising, resulting in deal value erosion.

    #83554
    William Bouwman
    Participant

    There are things that can be done to address culture clash. Communication, cultural diversity, and creating a new shared culture are all important.

    The HR department and leadership play a critical role. HR can help communicate, promote cultural diversity, and create a new culture. Leadership sets the tone and creates a welcoming environment. In some cases, the culture of the acquirer is also not ideal and may improve through the merger into a new culture

    #83862
    Helen Mitchell
    Participant

    Conduct a cultural deep dive, engagement workshops, 360 degree review, gap analysis and identify actions. Establish the alignment plan and a roadmap to achieve alignment.

    #83983
    Kyle Sigmund
    Participant

    Overall I agree with a lot of these points. I think the key items that I’ve seen from first hand experience from both the buy and sell side is:
    – Communication early and often
    – Allowing the acquiring team to have a say in changes in culture / HR policies
    – Answering the why, whether that’s the acquisition or any changes and where the combined company is going (vision)
    – Dealing with bad actors sooner rather than later and if they’re ultimately reluctant to change, helping them find a new opportunity

    #84316
    SHurd
    Participant

    As others have chimed in, HR clearly has an important role. It makes sense to engage executive management with HR to engage managers at all levels so that they can become change ambassadors. Choosing a few IC employees is also helpful, having their input and trust from the bottom up.

Viewing 15 posts - 16 through 30 (of 39 total)
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