CULTURE–STRATEGY FIT® M&A Culture Tools focus on pre- and post-close assessment of culture for improved decision making and integration planning. They are used to engage people in identifying culture synergies, tensions and differences and how to ensure integration success.
Why pay attention to culture during M&A?
PwC’s recent 2017 M&A Integration Survey Report finds that the struggle to derive value from M&A continues to challenge organizations, with Strategic Success (55%), Financial Success (50%), and Operational Success (47%) reported at disappointing rates. Recent research (The Impact of Corporate Cultural Distance on Mergers and Acquisitions, 2016) reconfirms the negative impact of cultural differences on deal completion time and probability, synergy returns and multiple aspects of performance.
This is worrisome when combined with the shift in M&A from ‘Absorption’, ‘Tuck -in’ or ‘Stand-alone’ deals to ‘Transformational’ deals, now at 50% according to PwC (2017).
In Transformational deals, complexity increases and risks compound while cohesive leadership and talent retention becomes vital.
The good news according to the PwC 2017 study is that Integration Teams are starting earlier in the process such as at Deal Screening (32%), Post Letter of Intent (21%) and during Due Diligence (21%) with only 2% waiting to engage Post-Close. Starting early and using robust tools has potential to address culture risks and impact M&A value.
To optimize the value and return on investment in M&A, three steps are needed:
- Early, objective identification of culture similarities and differences
- Targeted integration plans that are culturally appropriate, leverage cultural synergies and address potential areas of culture tension or clash
- Cohesion amongst top leaders around integration implications and management of culture risks
There are several points in time to probe the culture:
- Deal Screening – Insights that affect the decision to proceed with the deal or provide insights into culture important for the deal
- Post-Letter of Intent & During Due Diligence – Insights into culture strengths, differences and risks
- After Signing but Before the Close – Objective data around culture synergies and tensions for integration planning, particularly to inform timing and approach
- Post-close – Input into integration and transition plans, as well as for on-boarding leaders and their teams
Focus on ‘Must Know’ Culture Data
Opinions and even data about culture similarities and differences are not enough. Effective integration planning needs to enable leaders to leverage culture synergies and nip culture tensions in the bud. Read more about Why Focus On Culture Synergies and Tensions in the CSF M&A Culture Approach
M&A Culture Resources
CULTURE-STRATEGY FIT® M&A Culture Tools are designed to support those close to the deal so they can integrate culture work into planning and decision making early in the deal and Integration Teams, HR/OD and M&A Consultants involved in integration and transition planning.
CULTURE-STRATEGY FIT® M&A Culture Due Diligence Tool Kit An early stage process that enables those involved in the M&A deal to unpack aspects of culture (particularly red flag issues) that need to be recognized for decision making, integration planning and risk assessment. It provides a process to record observations and make sense of these so that implications can be generated together for deal considerations or early integration planning.
This Tool Kit is most often purchased by Senior HR/OD professionals supporting mergers or acquisitions and M&A consultants who then engage those close to the deal. The M&A Culture Due Diligence Tool Kit includes Observation Guides, Interview Guides and a Workshop Facilitation Plan. A walk through of the methodology and tools is included. Call for more information.
Pre/Post-Close Integration Planning
CULTURE-STRATEGY FIT® M&A Culture Survey This 15 minute survey compares 14 culture attributes that can potentially create culture synergy or tensions. See the M&A Culture Profile example below. It can be used with or without the M&A Culture Integration methodology. For HR or Strategy consulting firms or companies experienced in M&A, this survey can be a tool to add to your M&A resources (You Do It approach). See this page for more information and the PDF CSF MA Culture Survey
CULTURE-STRATEGY FIT® Culture Scan This 5 minute, 14 item statement quick check survey is an ideal tool to ignite conversations about culture – ‘the way things get done around here’ or do a quick check for potential culture issues. Ideal for workshops to engage groups in describing their culture DNA. This is a tool for internal or external consultants or leaders wanting to open-up conversations while providing some structure and objective data. See this page for more information and the PDF CSF MA Culture Scan
CULTURE-STRATEGY FIT® Culture Integration Tool Kit For acquirer organizations, M&A consulting firms or organizations amalgamating large groups, this Tool Kit provides a methodology for understanding culture differences and addressing those that matter. It provides information important for effective integration planning. This process can be used either pre- or post-changeover. It is focused particularly on identifying culture synergies, tensions and differences important to the integration process.
The Culture Integration Tool Kit includes a comprehensive Facilitation Guide and Tools. The Facilitation Guide describes a process for engaging people in conversations based on data from the CULTURE-STRATEGY FIT® M&A Culture Survey or M&A Culture Scan. Included is the licensed right to conduct the M&A Culture Scan so internal and external consultants can quickly provide data to groups to engage them in conversations around culture synergies and differences. Included is knowledge transfer with a culture expert. Call for more information.
Build Your M&A Culture Tool Kit
Whether you are a member of an Integration Team, the HR/OD group supporting a merger or acquisition, or their consultant partners, you need practical surveys, tools and methods that enable well-informed decision making and planning.
Give us a call to discuss your needs and find out how we can help you build your tool kit and capability.