According to a study by Marsh Mercer Kroll, 50% of respondents cited “organizational cultural differences” as the most significant post-merger issue they faced.
Take the example of the failed Daimler-Chrysler merger. “Serious efforts to integrate the operations of Daimler and Chrysler foundered on lack of trust clashes between the mid-market cowboys of Detroit and the high-end knights of Stuttgart,” writes Michael Watkins. Daimler ended up selling Chrysler to a private equity firm at a $30 billion loss.
The lesson? The finances may be be combined, the leadership reorganized, the cubicles occupied. But the merger isn’t finished until the social merger — the human and cultural aspects of the merger — is complete.
What does a successful social merger looks like?
People have allegiance to the newly merged organization. They are comfortable and confident in the new company and feel a sense of belonging and united identity. They are fully engaged with each other and with their work.
People have positive relationships with each other. They talk to their new colleagues and share their history and ways of doing things.
People cooperate to serve the business. They share information and best practices, answer questions, and act as though they are all on the same side. They know when to adapt their processes so that customers are served better.
People stay. They are invested in the new entity they’re building and feel respected and valuable.
One great way to reduce culture clash is to set up a social merger site. Learn how you can advance your social merger using ThoughtFarmer M&A Edition.