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- 4. Culture have the potential to be broad and far reaching Culture Affects Resulting in Decision-making style Slow decision-making, failure to make or implement decisions Leadership style A shift in this can generate turnover among employees who object to the change
- 5. Culture have the potential to be broad and far reaching Culture Affects Resulting in How people work together Employee’s frustration Beliefs regarding personal "success" Lead to breakdowns in getting work done
- 11. Questions?
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- -Companies today are combining in record numbers -That said, the question that inevitably arises is: -Culture has emerged as one of the dominant barriers to effective integrations
- That people don’t act based on rational calculations. That participants are human and driven both by their shared culture and individual personalities
- Decision-making style (for example: consensus contrasted with top-down) Leadership style (for example: dictatorial or consultative, clear or diffuse) Loss of top talent can quickly undermine value in an integration by draining intellectual capital and market contacts.
- Ability to change (willingness to risk new things, compared with focus on maintaining current state and meeting current goals) How people work together (for example: based on formal structure and role definitions or based on informal relationships) Beliefs regarding personal "success"( for example: organizations that focus on individual "stars," or on teamwork, or where people rise through connections with senior practitioners). If people who believe they have to achieve goals as a team integrate with people whose notion of "success" emphasizes individual performance , the resulting situation is often characterized by personal dislike and lack of support for getting the job done.
- A rigorous program with clearly stated objectives should be put in place to address cultural integration. There are several steps to doing this: 1. Make culture a major component of the change management work stream. Often the main change management task during integration is providing "communications”. The team should be develop and use the right and appropriate channels to communicate with all the different players. 2. Identify who "owns" corporate culture and have them report to senior management. Choose owners from both companies to the integration to allow for representation of all views, even in a takeover. These "owners" typically will be senior Human Resources or Organizational Development practitioners. This is also an appropriate task for outside assistance, given the value of external insights in identifying culture. Culture should be on the agenda of regularly scheduled (monthly/biweekly) Steering Committee meetings.
- Consider the strengths of both existing cultures We should take the "best" of each company’s culture and integrate them. However, corporate strengths are sometimes incompatible. Therefore, we should be able to retain separate core capabilities where possible. For example, in the HP-Compaq merger, the merged company kept HP's strong Printer Division with minimal change, but integrated its sales force along the Compaq model, which was judged to have been more effective. Each legacy company's culture was allowed to dominate on a by-function basis. Implement a decision-making process The leaders of the integration project must address this with the support of the culture team by: • Identifying decision-makers for each area of the integration. • Understanding the decision-making style of each company both in terms of what the style is and the assumptions, processes, and structures that support that style. • Communicating expectations to those decision-makers, including the deadlines when decisions are required. In the integration of HP and Compaq, leadership had to address the tendency of engineers to base decisions on careful analysis of large bodies of data and the cultural assumption that a request for more data is a legitimate reason to delay a decision. Integration teams were introduced to the concept of "adopt and go" — a method of limiting analysis to currently available data and options. "Adopt and go" emphasizes action, not analysis. The term was heard frequently during the integration, describing the new decision making approach that the integration teams had embraced.
- Build the employee brand with a view toward how it will be understood by employees. If retaining the employees is a goal of integration, then an effort must be made to secure their loyalty. When one company is acquiring another, then the emphasis should be on making the acquiring company's brand attractive, in terms of the career opportunities, rewards, and the sense of identity that it offers to acquired employees. When equals are merging, it is important to find a common point that will not be so novel as to appear alien to all employees. It should neither install one company as dominant nor fail to recognize that employees from the merging companies have different expectations.
- Pick your battles. Focus on areas where cultural differences are likely to have the most significant impact on post-merger results, such as the critical business interfaces between the two organizations. Do not try to change culture overnight; it cannot — and would not — happen. Accept the fact that culture and employee behaviors are difficult to change and plan your strategy accordingly Work with culture, not against it . Encourage new behaviors that are a natural extension of the current cultures, and then help employees understand how to apply the new behaviors to their day-to-day activities. Build a new cultural "brand" that supports your strategies and that people can identify with.
- Identify high risk points. The major risks vary in every integration and need to be identified on a case-by-case basis Link cultural issues to business value. Business leaders often have trouble understanding the value and impact of culture. Get their attention by showing a clear link between cultural issues and critical aspects of business performance.