Why Culture Doesn't Matter in M&A

Live Roundtable Discussion with M&A Science

Companies frequently blame culture as a root cause for a failed merger. But, is it fair to blame an unsuccessful M&A integration on culture? Jonathan Shiery, Director at Guidehouse discusses the importance of culture in M&A with fellow M&A experts Kim Jones, Senior HR M&A Manager at Microsoft, Bill Clarkin, Head of Mergers and Acquisitions at BMO Financial Group and Krison Patel, CEO at DealRoom. Discussion topics include defining culture, approaches to integrating cultures, and first-hand experiences from working in the trenches of M&A integration. Watch the full video podcast to learn more.

mergers and acquisitions

Key Points from the speakers:

  • “Guidehouse’s M&A engineers team have identified 21 different dimensions bucketed in who you are, what you do, and how you do them.”
  • “It may be time for a Chief Culture Officer who is accountable for integrating the cultural components”
  • “The strategy of the deal impacts whether you actually integrate the culture, make changes to the culture, or try to create a new culture"
  • "Anytime you're acquired, there's kind of this us verse them mentality that's instantly created. This psychological change can’t underestimated"
  • “It is key to define culture into tactical components that can be managed like projects or strategic initiatives with accountability”
  • "For the last 30 years, Culture has been one of the Top 3 reasons for M&A deal failures, but is still not a factor into the valuation price of an acquisition.”
  • "Don’t communicate to check off a box. Communication is different for everyone. Understand the mediums, the volume, the messaging, and what resonates with the audience you are communicating to is critical.”
  • “Leadership is a cornerstone to culture, which makes getting the newco leadership decisions made a race against time.”
  • “Organizations should understand what parts of their culture are non-negotiable, and what parts are flexible and can be influenced by the newco.”
  • “Don’t’ be penny wise and pound foolish with small expenses that might be an important cultural element to the acquired company.”
 

For the last 30 years, Culture has been one of the Top 3 reasons for M&A deal failures, but is still not a factor into the valuation price of an acquisition.

Jonathan Shiery, Director at Guidehouse

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