Corporate Culture, Mergers and Acquisitions

1=3

What’s the best approach to acquisition integration? Depending on whom you ask you will get very different replies, and some of the best advice comes from those who have bought and integrated dozens of organizations in their careers. A group of experienced CEOs with a long pedigree of acquisitions got together in 2000 for a roundtable discussion in Scottsdale, Arizona.

While everyone agrees that acquisitions and integration pose considerable challenges, the real driver behind M&A is that it presents a much faster route to business growth than organic growth, and speed is of great value in this fast moving global economy. But if the acquisition gets bogged down in internal issues, mass defections of talent, and too much focus on positions and politics, then growth can suffer and the benefits of the acquisition are difficult to deliver.

One of the best ways to ensure the acquisition delivers on its growth opportunities is to use an in depth understanding of the cultures of both companies as a guide on how to approach the integration. When the internal ways of working (cultures) are similar, it can make sense to use an assimilation strategy for the integration.

When the cultures are very different, yet there is a good business rationale for joining forces, there is the option of allowing it to maintain its identity as you slowly begin to build trust and understanding of the people and their capabilities and learn how to best leverage this new acquisition for the benefit of everyone. The Disney acquisition of Pixar is a great example.

m&a and culture

And every once in a while, an acquisition comes along where 1+1 = 3 and there is the ability to take the best elements from both organizations to create a new entity whose combined power becomes a significant competitive force. The successful merger and integration of Exxon and Mobil, to form ExxonMobil, the largest corporation in the world, is a good example.

For years I have used this chart when a CEO and I are in discussions about a potential merger or acquisition. It adds the cultural dimension to the discussion and often leads to fruitful and otherwise overlooked insights.

(Note:  this article is adapted from LEVERAGE: The CEO’s Guide to Corporate Culture, by John R Childress and available in paperback and eBook formats on Amazon.)

John R Childress

Author of LEVERAGE: The CEO’s Guide to Corporate Culture, and FASTBREAK: The CEO’s Guide to Strategy Execution, available from Amazon in paperback and eBook formats.

See the review of LEVERAGE in The Economist (January 9, 2014.

About johnrchildress

John Childress is currently Visiting Professor in Strategy and Culture at IE Business School in Madrid and a pioneer in the field of strategy execution, culture change, executive leadership and organization effectiveness, author of several books and numerous articles on leadership, an effective public speaker and workshop facilitator for Boards and senior executive teams. In 1978 John co-founded The Senn-Delaney Leadership Consulting Group, the first international consulting firm to focus exclusively on culture change, leadership development and senior team alignment. Between 1978 and 2000 he served as its President and CEO and guided the international expansion of the company. His work with senior leadership teams has included companies in crisis (GPU Nuclear – owner of the Three Mile Island Nuclear Plants following the accident), deregulated industries (natural gas pipelines, telecommunications and the breakup of The Bell Telephone Companies), mergers and acquisitions and classic business turnaround scenarios with global organizations from the Fortune 500 and FTSE 250 ranks. He has designed and conducted consulting engagements in the US, UK, Europe, Middle East, Africa, China and Asia. Currently John is an independent advisor to CEO’s, Boards, management teams and organisations on strategy execution, corporate culture, leadership team effectiveness, business performance and executive development. John was born in the Cascade Mountains of Oregon and eventually moved to Carmel Highlands, California during most of his business career. John is a Phi Beta Kappa scholar with a BA degree (Magna cum Laude) from the University of California, a Masters Degree from Harvard University and was a PhD candidate at the University of Hawaii before deciding on a career as a business entrepreneur in the mid-70s. In 1968-69 he attended the American University of Beirut and it was there that his interest in cultures, leadership and group dynamics began to take shape. John Childress resides in London and the south of France with his family and is an avid flyfisherman, with recent trips to Alaska, the Amazon River, Tierra del Fuego, and Kamchatka in the far east of Russia. He is a trustee for Young Virtuosi, a foundation to support talented young musicians. You can reach John at john@johnrchildress.com or john.childress@theprincipiagroup.com
This entry was posted in consulting, corporate culture, John R Childress, leadership, Organization Behavior, strategy execution, Uncategorized and tagged , , , , , , . Bookmark the permalink.

One Response to Corporate Culture, Mergers and Acquisitions

  1. Frank Tempesta says:

    John, Good teaser article about the subject……concise yet (I’ll bet) most readers want to learn more. Frank

    Like

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