June 2012 - Issue 6

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Organizational Excellence Journal

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Answer of the Month

Culture clash

My company just acquired our number one competitor. I'm starting to see a very strange culture emerge from employees of the acquired company. I get the impression they're just interested in getting their eight hours a day and not caring about doing their part to build a better company.

How do companies bring together two different cultures to create a unified one?

— Business Manager


Turn us vs. them into we

by Mark Hordes, Senior Vice President & Principal, Sinclair Group

Companies are highly optimistic about the possibilities of merging resources and growing their business when they agree to integrate another company. However, many neglect to consider the culture of each company and how they'll mesh, or not.

In considering the factors of a merger, many companies naturally focus on integrating processes financials and strategy. They often forget about the people, the bulk of the formula that can make or break a company. To avoid this, I advise companies to look into people and culture as the driving force that will make the merger be successful and sustainable.

Here are six steps for overcoming the culture clash that apply pre- and post-merger with preparation being the difference:

  1. Review both cultural attributes.
  2. Emphasize communications.
  3. Hold company events and activities.
  4. Conduct integration working sessions.
  5. Create a prioritization process.
  6. Focus on HR blending.

1. Review both cultural attributes

The best time to review both cultures to identify the differences and strengths is prior to the merger. Better yet, companies should analyze the cultures before signing the deal. Diane Gayeski, Ph.D., Dean, Roy H Park School of Communications, recommends that companies put together a committee to do the review, and if possible, bring in an outside expert to help look for potential areas for clashes.

"Typical clashes might be over expectations of punctuality or the 'right' amount of hours to work, the levels of formality in addressing each other and in dress, and the amount of independence and empowerment granted to customer-facing employees," Gayeski says.

Nonetheless, it's still valuable to look at both cultures after the merger to include traits from both companies in creating a hybrid identity. I find it helps to review cultural attributes, such as values, behaviors, norms and customs.

Founder of GlobalNiche.net Anastasia Ashman recommends splitting departments and mixing people together. Give ownership to employees from both sides by requesting ideas for the new culture.

2. Emphasize communications

The biggest theme in unifying two companies is communication, which can ensure or hinder a successful transformation of two companies into one. Communication can occur in many forums, ranging from open meetings and an anonymous suggestion box to regular email updates and training. It's important that communications speaks to the business case for change and to the impact on customers and employees.

Employees will have many questions. The more answers management provides, the more accepting employees will be of the change. "Managers and HR representatives need to be as explicit as possible in explaining major elements of the 'new' culture. Think of this as an anthropologist researching and explaining a foreign culture," Gayeski says.

How people manage change is a critical training workshop theme that can help everyone prepare for the change and learn how to deal with conflicts in leadership styles communications and team efforts. What assumptions and values do the parties bring to the merger from their previous company? Too often, I've seen organizations assume that everyone has the same orientation on how they communicate and deal with change, how to set up teams, what constitutes acceptable behaviors and norms.

They also handle motivation and problem solving without really understanding why they do what they do, which can create conflict and unintended consequences. Teaching employees how to address and manage change on an individual, team and organizational level can help overcome these potential barriers to a successful merger of cultures.

The merger may be harder on employees of the acquired company. Getting them on board may require extra effort. This begins with a frank discussion and a call to action suggests Patrick Donohue. Donahue provides an example of a call to action: "We see you as having incredible value here at the new company; here's the commitment we're ready to make to you."

3. Hold company events and activities

Aside from communication forums, holding team-building activities and company-wide events provides employees with the opportunity to see each other outside of the work environment in a more relaxed setting. Try to schedule both formal working sessions and social gatherings.

Companies that are most successful with a merger consider the cultural implications long before making it official. Don't wait until you've merged to address the organizational issues and employee concerns, especially since many employees will wonder if they will still have a job. Focus on two-way communication and you're over halfway there.

4. Conduct integration working sessions

Include the leaders of both companies in working sessions. They'll need to address HR issues, policies, organizational structures and leadership practices.

5. Create a prioritization process

The purpose of the prioritization process is to determine which services from the newly merged functional areas is unique, need to be rationalized or be put into shared services in the new organizational structure.

6. Focus on HR blending

This piece is comprised of reviewing union contracts, workers councils, compensation and benefits, and the resource and staffing requirements of the newly merged organization.

Keep in mind that culture is wrapped around and is part of every aspect of a merger company, processes, organization, performance management, communications, strategy and technology. You must plan for all these elements to be successful and sustainable.

 

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"I have worked with InternetVIZ for over 10 years in different enterprise roles that I have occupied. They are an outstanding add to your client-facing efforts and they deliver! If blogs, social media or e-newsletters are what you’re looking for, look no further!"  — Mark Hordes, Senior Vice President, Sinclair Group

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