Tagged: cultural differences, people, PMI, synergies
- This topic has 3 replies, 4 voices, and was last updated 1 year, 5 months ago by Boon Hon Low.
September 29, 2021 at 1:26 pm #36367Boon Hon LowParticipant
One of the key failures for integration is the inability to manage the cultural differences between the acquirer and target corporations. Managing cultural differences will take time as there will be anxiety among employees who are faced with uncertainties of their career in the combined organisation. On the other hand, there is an expectation that PMI activities should be completed as soon as possible so that the new organisation can settle into operating BAU. How does one handle this apparent contradiction in timing to ensure that people does not create negative synergy and disrupt the integration process?October 1, 2021 at 4:08 pm #39090Sam CheeParticipant
I suppose it’s more of the ‘how’ than ‘when’ to integrate and co-develop a new combined company culture. While integration should be carried out swiftly, the way it is carried out seems more important – for example, whether external cultural specialists are required to support the transformation (especially when both sides have vastly different cultural and language differences), whether managers on both sides are culturally sensitive and ready to accept new ideas or ways of working (if not, what courses or workshops should they attend to achieve this), etc.October 4, 2021 at 11:47 am #39100Sylvie Gallou GeoffrayMember
It still makes sense to have clarity at least at the top levels for key functions, and having that uncertainty for senior but lower levels. The company still has to run and function.October 4, 2021 at 2:01 pm #39107Michael Maggiotto JrParticipant
The one constant in business is CHANGE. While business as usual is a wonderful term, ask any employee at any company to describe a typical day. The universal answer is that each day is different. While we all have tasks as part of our job description, and there are definitely repetitive elements, every day is different. When planning out the merger and developing the communication strategy, this concept should be shared with all parties. While there may be greater magnitude of change in the near term, the employees and leaders need to understand that change will happen whether the merger happens or not. How you communicate this will influence the actions or inactions of others and contribute to the pace and effectiveness of the PMI.
While at Newell Brands, just after Newell Rubbermaid acquired Jarden Corporation, we saw this in action. Though the quantity of the communication was decent, and the “how” of communication constantly adapted, the “What” in the communication was lacking and contributed to significant upheaval in the organization during the first 2 years. Not the least of which was much higher turnover when change implemented failed to produce expected/desired results.
But let’s not forget that speed does not equal quality any more than quality means a slow pace. There is a fine balancing act to produce quality results quickly. Chasing after a fast PMI often leads to an ineffective or inefficient PMI and can contribute to failure in the 1 – 3 year window post-merger. But Boon is correct, if you take too long on the PMI, trying to get every step perfect, you could see it all fall apart as well. As you move through the stages if integration, communication will be your most important tool. How you communicate, the frequency of communication, and the content of that communication will determine the effectiveness and efficiency of the integration strategy.
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