Cross-cultural awareness
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How does your organization prioritize cultural awareness during post-merger integrations? And, specifically, what steps are taken to ensure this is successful?
Hi Gregg.
I was reading Rodney’s post about how to make Leadership to Prioritize Due Diligence in M&A and thinking that are a lot of similarities in the challenges both situations pose. I guess regarding cultural awareness it starts with making it visible to leadership the impact that this knowledge brings to the process. And the easiest way of doing that is to share clear examples of situations where cultural differences were the root cause for tension and how being aware of those differences was key to find a middle ground solution.Those are the steps that I’ve seen driving a successful integration:
Step 1: Acknowledge and Honor the Past and Present (focus on similarities vs. differences)
Step 2: Commit to a Shared Vision of the Future
Step 3: Highlight the path to the new FutureThe emphasis should be on learning from each other and capitalizing on each other strengths.
It’s also beneficial to create a cross-companies lead team where both cultures can converge and be represented.
Moreover, anonymous surveys throughout the process are a great way to get the pulse of the situation.It is important to understand the culture of the region where the PMI is being conducted. The impact of any layoffs on the wider market and their regulatory implications. Post that please walk into the common vision of the company.
Start by conducting a cultural assessment during the early integration phase. For example, forming cross-functional cultural task forces, providing tailored training programs to foster mutual understanding and shared values, using feedback mechanisms like anonymous surveys to track progress and adjust strategies.
It’s so important and something we need to improve upon. After reviewing the content within this course, I think it would be beneficial to engage quickly with the leadership of the Target Co after deal sign to better assess their culture and understand the ways of working for the Target Co. Unfortunately, this is not prioritized during due diligence and is something we need to quickly mobilize on post-sign.
Regarding feedback mechanisms, some additional steps that can be taken are hosting focus groups or engaging in listening tours.
At our company, we are acutely aware of the importance of cultural differences in post-merger integrations. In one notable case, while the integration was successful from the perspective of merging the companies, it also revealed key challenges. As the smaller acquirer, we faced antipathy from the other side, which took over five years to address fully—particularly in aligning ERP systems and process structures. While sales and supply chain integration were prioritized and executed smoothly from the start, other areas were initially neglected.
Now that all finance teams use the same tools and a common language, collaboration has significantly improved, and quicker resolutions are found when problems arise. This experience has underscored the critical role of cultural and operational alignment in achieving long-term success.
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