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Fleximize: How to Merge Cultures Following an Acquisition

Date: October 14, 2019
Mark Tighe, Founder and Managing Director at specialist tax consultancy Catax, delves into how to successfully merge two business cultures following a business acquisition

For a merger or acquisition to work well, company culture must be handled sensitively. The real challenge lies in the bringing together of two, often very different, company cultures in a way that keeps all staff motivated and engaged. It is easy to underestimate the tensions caused by an alien business culture being imposed upon another – it can leave staff feeling confused, anxious and resentful.

Specialist tax consultancy Catax has expanded rapidly since its founding in 2008 through a combination of organic growth and acquisition so they have had plenty of experience in how best to approach the merging of cultures. Below, Founder and Managing Director Mark Tighe shares some simple steps to follow in order to ensure a smooth transition.

1. Define the new company culture you wish to create

A company’s culture is the shared values and beliefs that determine behaviour and conduct within the organisation. The culture, which dictates how the company is run, is defined by three key ingredients:

– The tone and conduct of staff, which is set from the top down

–  How the company presents and sells itself and its services/products

– The company’s management structure or operating model

So decisions must be made about what the most effective approach to each of these areas will look like, and how they will result in smooth operations, efficient output and happy staff.

Such decisions require carefully considered analysis of multiple factors. They must ultimately be made at senior level but only after gathering opinions from all staff to ensure everyone is engaged and feels they have a stake in the process. Senior managers should communicate openly throughout to keep staff updated on each stage of their decision making process and invite constant feedback.

It may be that you choose to assimilate one business culture into another, but which bits of each culture you impose and to what extent will depend on the reasons for the merger and where the most value lies.

2. Identify differences between the two companies that need addressing

The discrepancies between two companies need thorough analysis to work out which ones are potentially beneficial and which ones will be obstructive or troublesome. Where the latter is likely, senior managers need to consider how to close these gaps.

Diagnosis of the differences that require attention could involve interviews or surveys of all staff and managers, interviews or surveys of clients, mapping of the management structure to highlight who is responsible for which decisions, flow charts to demonstrate how work is secured then completed, as well as research on which staff, teams and tactics are most important to winning work and represent the most value.

This is also where managers can assess the new skillset and any skills gaps that need filling.

Where two sales teams need to work together on a single project, for example, an agreed approach and management structure behind which everyone can unite and confidently carry out their jobs is vital.

A key thing to remember is that you should not try to change everything, which is why this analysis is so important. Wherever possible, let the teams continue to function as they have before, altering only those things which are necessary for the future success of the business.

3. Get on with it

Once you’ve established what kind of company culture you wish to create, and have identified the disparities that need addressing, it’s time for the senior management team to clearly and openly share their vision and desired values with the rest of the team. This will help to ensure everyone is engaged and committed to the new direction. During the roll out, it’s important to take the time to highlight the positives and strengths of each organisation to all teams so they get a full understanding of why the changes are happening.

Then comes the more practical step of working out how the necessary changes are going to be achieved – again, always involve the staff on the ground as they often have the best insight into what realistically will and will not work. This is also where managers must be sensitive to different personality types. Some people willingly embrace change while others like familiar routine and find change very challenging – different approaches may be needed for different team members.

Implementation is likely to require training and workshops that will enable staff to harness a vision of their future and how they are going to achieve it together. Inclusivity and involvement at each stage are really important if a directional or cultural shift is to be effective.

Do not get impatient or rush the process. Sudden major sweeping changes will generally be met with panic and hostility. A major shift in company culture, even after the practical changes such as new staff, processes and targets have been put in place, will take time to fully embed.

The key thing to remember about merging business cultures is that it does not happen overnight. It requires a well researched and planned strategic approach that involves everyone at every level of the organisation – don’t leave it to chance.

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