80% of mergers fail to create value. The top cause of this is a failure to merge cultures.
Allegiances to previous companies can leave people questioning, ‘What do I belong to?’. You may see a haemorrhage of talent, legacy tribes and senior teams taking early exits.
The solution is to make culture part of the due diligence process. Communicate frequently, share what information you can, when you can, and set short-term achievable goals. When separate tribes unite instead of divide, you can ensure that your M&A activity performs as promised.
Mergers and acquisitions can provoke some of the most difficult – and emotionally-loaded – belonging challenges.
A cross-company Sounding Board of senior team, in our Belonging Exploration workshops, provide a strong foundation. This is a great way to look at what it means to belong to the new entity, consider legacy and future, and bring companies closer together. For M&A Sounding Boards we recommend two sessions, with a short time for reflection in between. Short, mid and longer term activities to evolve the sense of belonging, embrace newly acquired businesses smoothly, and provide a reference for due diligence during the acquisition process.
"80% of all mergers fail to create value, 50% destroy it"