Lou Gerstner, former CEO of IBM Corp., once said culture isn’t just one aspect of the M&A integration game, ” … it is the game.” So, if culture compatibility, assimilation and integration is so critical to M&A success — why don’t more executives take it seriously and put it at the top of their M&A priority list? And, why is it that …

  • More than 50 percent of executives who execute mergers or acquisitions rarely or never conduct formal cultural assessments?
  • Only 4 percent of executives include culture-specific questions in their due diligence checklist?
  • Just 2 percent of organizations contract with an outside firm to conduct a “culture gap analysis” or compatibility study?

Source: Pritchett Survey

The truth is, in most mergers and acquisitions, culture integration seems to fall to the bottom of the list. Assigned as a sidebar project. Delegated to HR or other business unit leaders to figure out or stumble through it.

This is a recipe for failure. Why? Because, if the two workforces don’t figure out how to work well together and deliver collective value — the M&A transaction will be a bust. Sure, on the surface, the companies may appear to have similar business models and strategies. Core beliefs may even align. But that’s not what culture integration is about. It’s about making people (individuals, workgroups, teams) feel like they are part of something new. It’s about creating a lasting connection between employees and your newly combined company.

Without a concerted, strategic plan for bringing the two organizations (people not processes) together — transaction value will quickly diminish. There are three things executive teams can do to ensure this does not happen:

Get Out in Front of It: Conduct a deep and wide culture assessment. Know what makes both organizations tick, and identify the gaps / differences that exist. Let the employees know that their voice matters and that you have a plan for bringing the two cultures together. Assess primary concerns and questions. Gather insights that will help you communicate with them and keep them engaged.

Get the Message Right: Based on the insights gathered from your research and assessment, formulate a story that will resonate and connect with different dimensions of the workforce. A singular vision and purpose is critical, but the story must also be aligned with the specific worlds different stakeholders live in. For instance — what, how and when you communicate to sales may be different from the message you send to technical teams. A singular consistent message, tailored in a way that is relevant to each stakeholder group and delivered at intentional times throughout the process, are critical elements to successful culture integration strategy.

Strap the Leadership Team in for the Ride: Make sure you recognize that this trip will require sustained effort and investment. You will need to allocate the resources and budget to the culture integration initiative. This investment will go toward internal communication programs, executive travel, local events, employee feedback systems and other efforts that are required to manage the culture integration process. Remind the team that this will not be a short trip — at least 12 to 18 months. So, make sure the team is prepared to stay the course.

It’s important to note that mergers and acquisitions also represent an opportunity to reassess and realign your company’s vision, mission and values system. This provides everyone with the opportunity to start with a clean slate and begin operating from a new, shared sheet of music.

In the end, your goal is to create a high‑performing culture. This can only be accomplished when the executive team is committed to shaping and aligning shared expectations, beliefs and behaviors across the newly combined company. And this will only happen when the C‑suite makes culture integration a priority before, during and long after the transaction takes place.