Situation: A company purchased another company one year ago. While the two organizations complement each other in terms of market coverage, their cultures differ. What are the key cultural issues that the CEO should consider as they work to bring the two companies into deeper alignment? How do you align company culture?
Advice from the CEOs:
- What are the differences between the cultures of the two companies?
- The purchasing company’s culture is characterized as tech-savvy. They work easily across time zones; have high team autonomy; and pool back-office responsibilities and the associated expenses for more consistent management across projects. While their overall revenue is lower, they have higher revenue per revenue-producing employee.
- The acquired company’s culture is not tech-savvy. They make little use of email or technology; have little long-distance communication or experience working across time zones; a top-down decision and management structure; and expenses are managed at the project level with little consistency in expense handling between projects. They have no HR function.
- Look at the core values that drive each company. Compare and contrast these.
- Are there complementary strengths on which to build synergy?
- Are gaps in one company complemented by strengths in the other?
- Usually, the acquiring company has to opportunity to dictate the culture of the combination. With shrewd positioning, strengths of the acquired company can provide benefits to the combination.
- Perform a values analysis of the two companies and look for opportunities to leverage value strengths across the two companies.
- Look for an informal opportunity to have a conversation with the principles of both companies about their motivations for agreeing to the acquisition. There are two basic options:
- Integration and growth or diversification and investment.
- If the purchase was for integration and growth, then the acquirer will likely want to instill their values into the acquired company.
- If the purchase was for diversification and investment, then the acquirer may be willing to allow the acquired company considerable autonomy. However, strategies and plans should be probed to provide clarification.
- Understanding these factors will help to determine which values and strengths of each company to combine into a unified culture.
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