Integration When a Company Has a Strong Culture

This topic contains 8 replies, has 8 voices, and was last updated by  Lina Lorenzo 7 months, 3 weeks ago.

Viewing 9 posts - 1 through 9 (of 9 total)
  • Author
    Posts
  • #84090

    Gregory Gills
    Participant

    Hi all! I work for a company that has a very unique and strong company culture. I think this is the only company I have ever worked for that has a culture where everyone not only knows the values, but also uses them in daily decision making etc. This is culture is one of the competitive advantages my company has. My question is when a considering a merger how can we protect the culture without pre-judging and ruining something that may be a fantastic opportunity? How do we strike that balance?

    #85071

    Jenny Ewen
    Participant

    We just acquired a small company with a very strong, unique and “hip” culture. We recognized that was one of the strengths of the company that allowed it to be innovative (we acquired it for the innovative technology and we are a large and more corporate culture). Although the company had to come into our systems and therefore processes, we were very clear that we wanted to keep the “tech start up” culture overall – that was communicated to all stakeholders with the value that it provided to that company and ours. We definitely wanted to be able to retain and attract the talent of a tech start up culture. It helped because the company stayed in a separate office location so they could still have the fun environment and activities. I think it largely comes down to communication and appreciation of what each party brings to the table.

    #85563

    Gregory Gills
    Participant

    Thanks Jenny Ewen!

    #94141

    Silman Ondrej Dia
    Participant

    Hi there,

    What Jenny is describing refers to the acquisition strategy and the degree of intended integration whether a holding; a preservation; a symbiosis; or an absorption. In this case it would appear to be preservation with a minimal integration (process) while priority is given to independence (culture.) It really comes down to the goals and motivation behind the M&A purpose. Whether looking for economies of scale, economies of scope, economies of risks or economies of skills, each scenario would command a specific extent of integration. In this case the economy of skills (innovative technology knowhow) seems to have been the key for the company to be acquired.

    #94616

    Renata Porto
    Participant

    I think you need to sell the value of the culture in question. Assuming the purchasing company is open to a collaborative approach, if you can make the case for why your company’s strengths should be leveraged, you may end up with a combined culture that really incorporates the best of both worlds.

    #94621

    Erik Cornelius
    Participant

    To add to Renata’s point about selling the value of the culture – making sure there’s a shared definition of the culture seems paramount. When I think about Jenny’s description of “tech start up” culture, to me that means the following:

    * Quick decision making
    * Informal / minimal processes
    * General lack of hierarchy – empowerment to make decisions is distributed
    * Attention to work/life balance, promoting flexibility over hard start/stop times

    None of these is inherently good or bad, *but* if there is a clash in the acquirer’s culture on one or more of these points, it’s going to make for a much more challenging integration. Some of them may also be more “core” to the target company (i.e. adapting to additional processes within reason is more acceptable than giving up distributed decision making).

    I’d also be interested to hear whether “tech start up” means something similar or fairly different from what I’ve suggested above…

    #96547

    Dale Deg
    Participant

    Gregory,

    My interpretation of your question and company description is that your company is “relatively” small with what is know as a clan culture. In addition, it sounds like your concern is an acquirer coming in and changing things so the strong culture is negatively impacted. Based on this perspective, I agree with Jenny’s comments that it would be imperative that your management clearly communicate to the the acquiring company executives that the current culture is key to what has made the company successful, and would be important to its ongoing contribution to the acquirer. What you are describing is the area I am focusing on, which is corporate culture clash.

    Unfortunately, I have witnessed several technology acquisitions that were done only to gain the IP with little regard to the people in the target. It was concerning and sad to see these transactions unfold, since in one case, over 250 employees were let go with a 30 minute announcement over the PA system, to pack their personal items and exit the building immediately. ūüôĀ

    Regards,
    Dale

    #101331

    Cheryl Taylor
    Participant

    The strong culture will trump the less dominant culture every time. This is quite unfortunate when the strong culture is misaligned with its treatment of human capital. Typically there is not much that be done to change the dominating culture type if their intent is not to merge cultures.

    #102129

    Lina Lorenzo
    Participant

    A strong culture actually survives without the parent company having to do much about it. We can be under the same HR and information systems, follow the same operational procedures and best practices of the parent company, but still maintain a local identity. Of course, this depends on whether the acquiring company has a toxic culture itself, and they actively work to destroy that. This is why one of the most important aspects of due diligence is a cultural assessment and determine the cultural fit of a company before the purchase is closed.

Viewing 9 posts - 1 through 9 (of 9 total)

You must be logged in to reply to this topic.

Loading.. Please wait