Integrating merged organisations
October 3, 2008
In today’s business environment, mergers and acquisitions take place frequently, and many UK workers will have experienced working for a company that merged with another at some point in their career. At the moment this is in the news a lot because of the massive financial problems a lot of banks are experiencing, leading to major buy-outs like the recent Lloyds TSB/HBOS agreement.
Mergers and acquisitions involve a lot of hard work in order to succeed, and one of the biggest things to consider is how the different organisational cultures will integrate, and how this will affect the people working for the new company. Working out how to make cultural integration as straightforward and successful as possible is an important factor in the planning process.
A recent survey by the global consultancy Mercer has found that not enough is done by organisations to identify and manage cultural integration issues during mergers, and that this leads to major financial losses as a result. This means that the economic viability of a merger or acquisition can be seriously reduced due the poor integration of employees, teams and management styles. Some organisations are now actually looking at this area as part of due diligence before the merger even takes place, to enable them to better assess the likely challenges and prepare for them, however this is quite rare. A small number of respondents to the survey had started to think about formalising the cultural integration process and carrying it out in a systematic way.
The survey was carried out on 119 organisations across the Americas and Europe, but these were very large organisations. I think it is likely that an even lower proportion of organisations going through mergers and acquisitions in the small-medium sector would consider cultural integration as something to focus on before, during and after the merge takes place. It’s something I have never seen happening in my experience.
Have you been involved in a merger and if so how did the cultures of the different organisations integrate? Did you experience any problems and how were these addressed?
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