18/03/2015

Once you merge, will a monster emerge?

BY Julian Gorham

“Culture eats strategy for breakfast every time”, said business thinker Peter Drucker and what he meant wasn’t that brand strategy isn’t important, but that it’s people who really make the difference.

Today, for organisations of all kinds, but especially those in professional services, knowledge and innovation are the main sources of advantage – and the source of these is people.

People are driven away from dysfunctional cultures: Exciting, supportive, empowering cultures attract and retain them.

“Culture matters at any time in the life of an organisation, but at no time is it more important than when two businesses merge.”

The mistake some organisations make is that if they think about culture at all, they think that just because they are in the same sector, providing largely similar services, then their cultures must be the same. Once they merge, will a monster emerge?

Every organisation has a culture and there really are some monsters out there – a quick look at sites like Glassdoor is all the evidence you need.

Organisations go about things in different ways and that is a result of everything they’ve ever done before; their history, leadership, people and capabilities – and the stories they tell about it all. Even without any formal thinking about culture, there will be behaviours that have become habits over time and those behaviours quickly become repeated, regurgitated and then reinforced as ‘the way we do things around here’.

5 principles about merging businesses

1. New environment – Moving into a new HQ is the perfect opportunity to start to explain the culture. Silence won’t do: employees will almost certainly fill in the gaps themselves and conclude along the way that the new set up doesn’t know what it’s doing if things aren’t in place.

2. Clear strategy – If redundancies happen as the result of a merger you need to get positive messages out quickly. Not spin or empty promises, but a well thought through business strategy that joins employees to business ambition so that the organisation can hit the ground running.

3. Leadership, leadership – Leaders play a vital role in setting the agenda. The leadership from all the parties should take the lead in setting the cultural agenda, explaining it clearly and leading by example.

4. Dialogue – Communication should be carefully managed through a single organising idea and be two way – Intranets are key to explaining culture and providing the forum for celebrating it as the best examples of behaviour emerge and reinforce the cultural norm.

5. Timing – Change like merger is not easy, but it can be approached with either energy or ennui: The choice for merging organisations, who are often focusing on clients rather than colleagues, is to seize the opportunity carefully to set out a clear strategy, before launch day, for the very people who will drive the business forward.