March 11, 2024 โข 18 mins
Unlock the secrets to successful business integrations as we delve into the surprisingly perilous world of mergers and acquisitions. A staggering 70 to 90 percent of these ambitious ventures stumble, often tripping over cultural hurdles that many executives overlook. But fear not, we're here with expert guidance to help you navigate these murky waters. We dissect the often underestimated impact of organizational and national cultures on M&A outcomes, offering invaluable insights on the human element at play in these complex corporate marriages.
Join us as we share the tale of a successful European venture gobbled up by a North American giant, illustrating the game-changing role of early cultural consulting. This episode isn't just about the perils; it's a treasure trove of strategic wisdom, laden with stories of leadership finesse and communication mastery that can turn potentially rocky acquisitions into smooth-sailing partnerships. It's a masterclass in the art of cultural integration, complete with the dos and don'ts that can make or break your next big business move. So tune in, learn from the best, and discover how to ensure your company's growth is not just a statistic, but a success story.
๐๐ฌ๐ค ๐พ๐๐๐ฅ๐จ โ ๐๐๐ฃ๐ฎ ๐พ๐ช๐ก๐ฉ๐ช๐ง๐๐จ is the worldโs #1 show on the business of culture and the culture of business. Christian Hรถferle and Brett Parry ponder culture in short bursts and deep dives, featuring your questions and comments related to culture, business, and personal growth.
Be sure to check out and subscribe to our YouTube channel for even more great content: https://www.youtube.com/@TwoChapsManyCultures
Visit https://theculturemastery.com/ for more information about the skills for working in a global context.
The music on this episode is provided courtesy of Sepalot.
โDuum Diipโ - Artist: Sepalot - Label: Eskapaden - Copyright control
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Mergers and acquisitions have the capability
for immense value, but researchdemonstrates that 70 to even 90
percent of MNAs fail orunderperform.
Navigating culture alignment isa top people challenge when
executing.
Mnas and leaders can no longerafford to underestimate the
(00:23):
impact of organizational cultureand national culture on these
transactions and how they affectperformance.
So here you're going to learnwhat to do and what not to do.
Speaker 2 (00:37):
Welcome to Two Chaps Many.
Speaker 1 (00:39):
Cultures.
Speaker 2 (00:40):
In an increasingly globally connected world, it is
vital to possess the essentialskills of cultural intelligence.
Listen along as we present thetopics, tips and strategies you
can use to develop the power ofcultural understanding in your
personal and professional life.
Here are your hosts ChristianVifala and Brett Parry.
Speaker 3 (01:01):
Yes, welcome back to Two Chaps, many Cultures.
Interesting stat, isn't it?
Failure, constant failure.
Of course, we don't want toalways talk about failure.
We want to talk about what wecan do to alleviate that failure
.
And when it comes to mergersand acquisitions, which are
really great ideas, this is theway that companies grow, it's
(01:23):
the way that they develop newmarkets, it's the way that they
bring on new people, newinspirations, new ways of
growing.
So tell us what is a merger andacquisition anyway?
Let's just start with thatpoint.
I don't know.
Speaker 1 (01:42):
I think acquisition is fairly easy.
I think acquisitions we acquiresomething we don't have it
ourselves as a company.
There is a product, a service,a technology, a set of talent.
We don't have that and we'lltake us forever to grow that and
develop that ourselves.
Here is a company on the marketthat does just that.
(02:03):
Let's see if they are a targetthat we can acquire and include
into our organization.
Acquisition, fine.
Merger that is, I think, wherethings can get a bit dicey,
because merging you know thisfrom driving your car on the
interstate or on a freeway, whenlanes go from 3 to 2 to 1,
(02:25):
there is a sign that you need tolet people merge or that you
have to combine these lanes.
So you have to align companies,you have to get your ducks in a
row, I'm guessing as a companythat is being acquired or that
(02:47):
is merging with another.
I think the terminology is abit of a euphemism.
It is to mask the fact thatvery often in these transactions
it's one entity purchasinganother.
So that would be theacquisition part.
I think the merger part wasadded for oh, we're equal
partners in this.
We are a quote, unquote mergerof equals and we come together
(03:10):
as equal peers, and we arecombining our efforts.
Now I don't know how many timesthat actually happens in
reality, that they are treatingeach other as equals, but I'm
ready to be surprised.
Speaker 3 (03:26):
I think in both situations there's a certain
amount of nervousness fromeither side, especially from the
people in the organization thatare not involved in the actual
idea of the merger acquisitionin the first place.
The employees may be nervous.
They may be from a culturewhere certainty is really built
in and they like the continuityof doing the same thing over and
(03:48):
over again, the comfort ofdoing that.
And of course, then themanagement says we're merging
with another company and thatcompany just happens to be in a
different country and they areasked to interact with these
people, and of course there's alot of that has to be messaged
properly.
That's something for managementto do, certainly, but what
(04:09):
we're talking about today isthink about those cultural
aspects of when you are matchingtwo entities from different,
not only country cultures butalso corporate cultures.
This can include things likewhat are the leadership styles,
what is expectation of theirtime that it takes to get things
done, what are the ways thatpeople communicate, what tools
(04:32):
do they use, what technology dothey use to communicate?
And all of these things can beinfluenced by culture.
Speaker 1 (04:39):
And very often the decision to combine two
organizations for a betterbusiness outcome are driven by
the numbers, is by how much morerevenue could we generate?
How much could we reduce ourheadcount and expense on talent?
How much could we reduce ourshared services?
(05:00):
How much new market share couldwe add?
These are all numbers games andthat's all economically sound.
We're not shaking any of that.
That's the reason why a mergereven begins or is in
consideration.
Unfortunately, very often whentwo entities are thinking about
(05:22):
this, the people part of theequation is very often an
afterthought or not a fullvariable in the equation.
And what Brett just said isbringing people together.
It's not yes, we're bringingcompanies together, but these
companies only exist becausethere are people working in them
.
And if you want to bring thepeople together, you need to
(05:44):
look at how that works, becausea culture isn't only defined by
the name of the country on thepassport or the flag pin on the
map.
It is the rules of engagementwithin an organization, which
behaviors are rewarded, whichbehaviors are sanctioned.
What makes you a hero in thecompany, what makes you somebody
(06:06):
that needs to lean in, to learna little bit more in order to
perform to the expectations ofthe rest of the group.
There are so many behaviorsthat are inherent to a company
that when you bring twocompanies together, this should
be top of your agenda, and thereare plenty of stories of these
(06:28):
M&A activities gone wrong.
They have made it into thestudy books.
People at university learn aboutthese, quote unquote, failed
mergers I wouldn't call themfailed.
They have given us a lot offeedback on how not to do it,
and for some of these examples,the feedback was a very
(06:48):
expensive one.
I think one of the mostproverbial ones by now is the
one where Daimler and Chryslerwere literally out loud,
communicating it to theirrespective teams, talking about
a merger of equas, and itsounded very German and it came
(07:10):
with a fist pounding on thetable as the CEO of the one side
explained this merger of equas.
Now, it was a very expensivemerger that had to be dissolved
and has left both sides withscars, so it didn't work out.
And there are plenty of otherexamples and it's easy to point
(07:33):
at them and say, yo, look atthose morons, how could they not
see the light?
However, there are plenty ofexamples where mergers actually
do work, and that's whycompanies are still acquiring
each other and merging with eachother, because there are ways
to do it right, and both Brettand I had the fortune of being
(07:54):
involved in such projects, wherecompany cultures were brought
together and the leaderships onboth sides of these entities
took preemptive measures toconsider the people factoring
these equations right, brett.
Speaker 3 (08:10):
Yeah, and understand that when a company has its
operations and they've beensuccessful over many years, why
have they been successful?
They've developed strategies,and strategies that have worked
often get repeated becausethey're just comfortable,
they're normal, they know whatworks.
But of course it's attributedto Peter Drucker.
(08:31):
Nobody really knows whether hesaid it, but culture eats
strategy for breakfast.
Speaker 1 (08:37):
So, in terms of Peter Drucker said and I'm
paraphrasing because I don'tremember the literal quote he
said you can't change culture.
You can only work with aculture that you have.
So you have to play the cardsat your dealt.
So you cannot changenecessarily how people behave
just because you dictate it tothem.
(08:59):
People will change, or groupsof people will change, their
behaviors if it suits theirinterests and if it's to benefit
of the group.
But dictating that top down isoften a futile endeavor.
So yes, I'm paraphrasing MrDrucker, but in merging
(09:20):
organizations you can wish upona cultural marriage as much as
you want.
It needs to work for both sidesand you need to incentivize it
or you need to build enoughbridges for these, for the
people in these organizations tocross towards each other's
sides.
Speaker 3 (09:38):
Yeah, absolutely so.
That strategy that worked inthe past you may have to adapt a
little bit.
It actually may mean developinga new strategy that is
developed specifically for thegoal of merging successfully or
acquiring a company that you seeas valuable.
So culture is an important partof this and we see this many
(10:00):
times, even between individualsthat move countries, and when we
work with you can see it justin the personal relationships,
of course.
And that's really where thecore, where it starts, the what
people believe in terms of whatis been successful for them, in
terms of leadership style,communication styles, the way
that we just show up, the wayhierarchy management is seen,
(10:23):
the way the openness or theconnectedness between management
is influenced by leadershipstyles and what's expected.
So you could imagine that onecompany coming from a very
hierarchical culture where theboss does all the deciding, to
another culture where it's a,it's just a free for all,
everybody has an opinion thatthere's already potential there
(10:44):
for tension.
Speaker 1 (10:45):
Yeah, and you might want to watch one of our
previous episodes where Brettand I were exactly talking about
the different leadership stylesaround the world.
So this very much plays intothese considerations.
When two companies, or evenmore companies come together,
I'm currently involved in whatis not a technical M&A process.
(11:06):
It's a three entities of thesame conglomerate on three
different continents are reorganizing the company structure
.
So you have an Asian parentcompany and their subsidiaries
in South America and one inNorth America.
So we have three parties comingtogether and having to align
these leadership processes andprinciples as well as the
(11:30):
communication internally and tothe customer.
Very interesting conversationsto be had.
And you could argue that, yeah,we should.
Then in our M&A process, weshould bring in somebody like
Brett or Christian to help uswith that culture piece.
Yes, you should.
I'm both Brett and I will say,yes, do that.
(11:52):
And shameless, because that'swhat I'm known for.
I'm really shameless.
You should be unfriended.
Now I think you can do evenbetter than that, because this
topical application of oh, we'regoing to need some culture
consulting because we'rebringing these entities together
.
Yes, that's a good startingpoint.
(12:14):
I think one of the best examplesI've had in my practice that
could serve as a best practiceeven was the acquisition of a
production site in Europe,northern Europe, done by a North
American conglomerate in thepackaging paper industry I'm not
(12:35):
going to mention any names.
So there's a big one of theglobal players in paper and
packaging and they're buying a$600-$700 million plant in the
south of Sweden and thisconglomerate that was the buying
(12:56):
entity, was the buying partnerhad done this before.
They have bought paper millsand other production sites
around the globe and theyremembered when it didn't work
and they fell flat on theirfaces before and still had the
bruises and still had the scarsto show and to talk about these
(13:17):
stories or these transactionsthat didn't yield the results
that the company had wanted.
So would you?
Speaker 3 (13:25):
say that it looked good on paper, but it didn't
work out so well.
Speaker 1 (13:30):
Yeah, yes, I couldn't help it, it did, it did.
And what they did instead thistime around was that we want to
accompany this the right wayfrom the get-go, with every
stakeholder involved, and thatincludes the human factor, the
culture piece.
So a consortium of consultants,including myself, was part of
(13:54):
this process from the verybeginning.
When the purchasing party andthe acquisition target were not
even allowed to talk to eachother for regulatory reasons, we
were given access to both sidesand we were able to consult
these both parties to the extentof when would the corporate
(14:14):
veil be coming down?
When can they talk to eachother?
How do we moderate theseconversations?
How do we help facilitate theseinternal conversations?
How do we help the respectiveplayers adjust their leadership
styles, adjust their behaviors,adjust their expectations to the
desired outcomes of the merger?
(14:36):
It was a very rewarding project.
It took a long time.
Like M&As do, they are not aone-and-done process.
When you see the news online orin media say, well companies,
abc is purchasing company 123for $7.5 billion big headline
news that sounds like a flash inthe pan.
(14:58):
It's a once-and-done.
It is an 18-months-and-moreprocess, depending on the scope
of the project, until themerging is beginning to be
complete.
It will sometimes take yearsfor it to be complete.
Speaker 3 (15:14):
So the best thing is to plan it's really investing in
the time, ahead of time, asyou're leading up to a
considered merger, even in theprocess of, perhaps, the
negotiations.
If you have somebody that'sculturally in the room with you,
that can give you some contextabout what you're seeing when
you're actually in thenegotiation stage.
(15:34):
Even you're talking tocounterparts from a different
culture, a different language, adifferent framework, and some
of these real things that youcan notice will be in that stage
Before you even decide thatyou're going to write a check or
you're going to actually openup and, as Christian says,
remove that veil.
This can be done by themanagement to notice what's
(15:57):
going on the other side and howcan we actually match those
cultures together to make for aneffective merger when it all
comes to fruition.
Because that little bit ofinvestment at the start can
absolutely pay off dividends fora long-term successful
acquisition that benefits notonly the management and the
shareholders but also the peoplethat are in the organisations
(16:19):
to assuage any of the doubt andthe discomfort and the risk
taking that comes along with it.
So we're certainly advocates forit, because we do this work and
there are many times that weget called in to do this, as
Christian says, and we reallyalways welcome any questions,
any comments, any of yourexperiences that you've had in
(16:41):
being involved in a merger, ofno matter what size it is.
It doesn't have to bemulti-million dollar deals, it
could be just small acquisitions, but if you've had those
experiences, we'd love you toshare them.
Write it down in the comments.
Reach out to us, down thecomments.
Yes, reach out to us.
Tell us what your experience isand what would be one final
(17:02):
takeaway that we could leavepeople with.
Speaker 1 (17:05):
Well, again, shameless plug or very biased
point of view from ourperspective.
Too often in my experience,people like Brett and I
consultants are brought in tohelp with a fraction of the
actual transaction.
I think if you want a merger togo right, you want somebody
like Brett or myself or anyoneelse who's doing this work by
(17:28):
your side.
You want to carve out anexecutive domain for people that
are your chief culture officers, who will help guide you, will
be the sounding board for you asyou are completing this process
.
It's not just a numbers game,it's a people's game, and the
more that sinks in witheverybody in your senior
(17:49):
executive teams, the better itis.
Speaker 3 (17:52):
Absolutely.
Thanks again for listening.
Don't forget to subscribe, hitthat button and that bell or
whatever you want to do toremind you, to let you know when
we put up new episodes.
Of course it's every week andwe're just bringing you content
around the culture of businessand the business of culture.
This is two chaps, manycultures.
Thanks again, good to see youagain, pal, and we'll see you
(18:14):
next week.
All right, see you, bye.
Mergers and acquisitions have the capability
for immense value, but researchdemonstrates that 70 to even 90
percent of MNAs fail orunderperform.
Navigating culture alignment isa top people challenge when
executing.
Mnas and leaders can no longerafford to underestimate the
(00:23):
impact of organizational cultureand national culture on these
transactions and how they affectperformance.
So here you're going to learnwhat to do and what not to do.
Speaker 2 (00:37):
Welcome to Two Chaps Many.
Speaker 1 (00:39):
Cultures.
Speaker 2 (00:40):
In an increasingly globally connected world, it is
vital to possess the essentialskills of cultural intelligence.
Listen along as we present thetopics, tips and strategies you
can use to develop the power ofcultural understanding in your
personal and professional life.
Here are your hosts ChristianVifala and Brett Parry.
Speaker 3 (01:01):
Yes, welcome back to Two Chaps, many Cultures.
Interesting stat, isn't it?
Failure, constant failure.
Of course, we don't want toalways talk about failure.
We want to talk about what wecan do to alleviate that failure
.
And when it comes to mergersand acquisitions, which are
really great ideas, this is theway that companies grow, it's
(01:23):
the way that they develop newmarkets, it's the way that they
bring on new people, newinspirations, new ways of
growing.
So tell us what is a merger andacquisition anyway?
Let's just start with thatpoint.
I don't know.
Speaker 1 (01:42):
I think acquisition is fairly easy.
I think acquisitions we acquiresomething we don't have it
ourselves as a company.
There is a product, a service,a technology, a set of talent.
We don't have that and we'lltake us forever to grow that and
develop that ourselves.
Here is a company on the marketthat does just that.
(02:03):
Let's see if they are a targetthat we can acquire and include
into our organization.
Acquisition, fine.
Merger that is, I think, wherethings can get a bit dicey,
because merging you know thisfrom driving your car on the
interstate or on a freeway, whenlanes go from 3 to 2 to 1,
(02:25):
there is a sign that you need tolet people merge or that you
have to combine these lanes.
So you have to align companies,you have to get your ducks in a
row, I'm guessing as a companythat is being acquired or that
(02:47):
is merging with another.
I think the terminology is abit of a euphemism.
It is to mask the fact thatvery often in these transactions
it's one entity purchasinganother.
So that would be theacquisition part.
I think the merger part wasadded for oh, we're equal
partners in this.
We are a quote, unquote mergerof equals and we come together
(03:10):
as equal peers, and we arecombining our efforts.
Now I don't know how many timesthat actually happens in
reality, that they are treatingeach other as equals, but I'm
ready to be surprised.
Speaker 3 (03:26):
I think in both situations there's a certain
amount of nervousness fromeither side, especially from the
people in the organization thatare not involved in the actual
idea of the merger acquisitionin the first place.
The employees may be nervous.
They may be from a culturewhere certainty is really built
in and they like the continuityof doing the same thing over and
(03:48):
over again, the comfort ofdoing that.
And of course, then themanagement says we're merging
with another company and thatcompany just happens to be in a
different country and they areasked to interact with these
people, and of course there's alot of that has to be messaged
properly.
That's something for managementto do, certainly, but what
(04:09):
we're talking about today isthink about those cultural
aspects of when you are matchingtwo entities from different,
not only country cultures butalso corporate cultures.
This can include things likewhat are the leadership styles,
what is expectation of theirtime that it takes to get things
done, what are the ways thatpeople communicate, what tools
(04:32):
do they use, what technology dothey use to communicate?
And all of these things can beinfluenced by culture.
Speaker 1 (04:39):
And very often the decision to combine two
organizations for a betterbusiness outcome are driven by
the numbers, is by how much morerevenue could we generate?
How much could we reduce ourheadcount and expense on talent?
How much could we reduce ourshared services?
(05:00):
How much new market share couldwe add?
These are all numbers games andthat's all economically sound.
We're not shaking any of that.
That's the reason why a mergereven begins or is in
consideration.
Unfortunately, very often whentwo entities are thinking about
(05:22):
this, the people part of theequation is very often an
afterthought or not a fullvariable in the equation.
And what Brett just said isbringing people together.
It's not yes, we're bringingcompanies together, but these
companies only exist becausethere are people working in them
.
And if you want to bring thepeople together, you need to
(05:44):
look at how that works, becausea culture isn't only defined by
the name of the country on thepassport or the flag pin on the
map.
It is the rules of engagementwithin an organization, which
behaviors are rewarded, whichbehaviors are sanctioned.
What makes you a hero in thecompany, what makes you somebody
(06:06):
that needs to lean in, to learna little bit more in order to
perform to the expectations ofthe rest of the group.
There are so many behaviorsthat are inherent to a company
that when you bring twocompanies together, this should
be top of your agenda, and thereare plenty of stories of these
(06:28):
M&A activities gone wrong.
They have made it into thestudy books.
People at university learn aboutthese, quote unquote, failed
mergers I wouldn't call themfailed.
They have given us a lot offeedback on how not to do it,
and for some of these examples,the feedback was a very
(06:48):
expensive one.
I think one of the mostproverbial ones by now is the
one where Daimler and Chryslerwere literally out loud,
communicating it to theirrespective teams, talking about
a merger of equas, and itsounded very German and it came
(07:10):
with a fist pounding on thetable as the CEO of the one side
explained this merger of equas.
Now, it was a very expensivemerger that had to be dissolved
and has left both sides withscars, so it didn't work out.
And there are plenty of otherexamples and it's easy to point
(07:33):
at them and say, yo, look atthose morons, how could they not
see the light?
However, there are plenty ofexamples where mergers actually
do work, and that's whycompanies are still acquiring
each other and merging with eachother, because there are ways
to do it right, and both Brettand I had the fortune of being
(07:54):
involved in such projects, wherecompany cultures were brought
together and the leaderships onboth sides of these entities
took preemptive measures toconsider the people factoring
these equations right, brett.
Speaker 3 (08:10):
Yeah, and understand that when a company has its
operations and they've beensuccessful over many years, why
have they been successful?
They've developed strategies,and strategies that have worked
often get repeated becausethey're just comfortable,
they're normal, they know whatworks.
But of course it's attributedto Peter Drucker.
(08:31):
Nobody really knows whether hesaid it, but culture eats
strategy for breakfast.
Speaker 1 (08:37):
So, in terms of Peter Drucker said and I'm
paraphrasing because I don'tremember the literal quote he
said you can't change culture.
You can only work with aculture that you have.
So you have to play the cardsat your dealt.
So you cannot changenecessarily how people behave
just because you dictate it tothem.
(08:59):
People will change, or groupsof people will change, their
behaviors if it suits theirinterests and if it's to benefit
of the group.
But dictating that top down isoften a futile endeavor.
So yes, I'm paraphrasing MrDrucker, but in merging
(09:20):
organizations you can wish upona cultural marriage as much as
you want.
It needs to work for both sidesand you need to incentivize it
or you need to build enoughbridges for these, for the
people in these organizations tocross towards each other's
sides.
Speaker 3 (09:38):
Yeah, absolutely so.
That strategy that worked inthe past you may have to adapt a
little bit.
It actually may mean developinga new strategy that is
developed specifically for thegoal of merging successfully or
acquiring a company that you seeas valuable.
So culture is an important partof this and we see this many
(10:00):
times, even between individualsthat move countries, and when we
work with you can see it justin the personal relationships,
of course.
And that's really where thecore, where it starts, the what
people believe in terms of whatis been successful for them, in
terms of leadership style,communication styles, the way
that we just show up, the wayhierarchy management is seen,
(10:23):
the way the openness or theconnectedness between management
is influenced by leadershipstyles and what's expected.
So you could imagine that onecompany coming from a very
hierarchical culture where theboss does all the deciding, to
another culture where it's a,it's just a free for all,
everybody has an opinion thatthere's already potential there
(10:44):
for tension.
Speaker 1 (10:45):
Yeah, and you might want to watch one of our
previous episodes where Brettand I were exactly talking about
the different leadership stylesaround the world.
So this very much plays intothese considerations.
When two companies, or evenmore companies come together,
I'm currently involved in whatis not a technical M&A process.
(11:06):
It's a three entities of thesame conglomerate on three
different continents are reorganizing the company structure
.
So you have an Asian parentcompany and their subsidiaries
in South America and one inNorth America.
So we have three parties comingtogether and having to align
these leadership processes andprinciples as well as the
(11:30):
communication internally and tothe customer.
Very interesting conversationsto be had.
And you could argue that, yeah,we should.
Then in our M&A process, weshould bring in somebody like
Brett or Christian to help uswith that culture piece.
Yes, you should.
I'm both Brett and I will say,yes, do that.
(11:52):
And shameless, because that'swhat I'm known for.
I'm really shameless.
You should be unfriended.
Now I think you can do evenbetter than that, because this
topical application of oh, we'regoing to need some culture
consulting because we'rebringing these entities together
.
Yes, that's a good startingpoint.
(12:14):
I think one of the best examplesI've had in my practice that
could serve as a best practiceeven was the acquisition of a
production site in Europe,northern Europe, done by a North
American conglomerate in thepackaging paper industry I'm not
(12:35):
going to mention any names.
So there's a big one of theglobal players in paper and
packaging and they're buying a$600-$700 million plant in the
south of Sweden and thisconglomerate that was the buying
(12:56):
entity, was the buying partnerhad done this before.
They have bought paper millsand other production sites
around the globe and theyremembered when it didn't work
and they fell flat on theirfaces before and still had the
bruises and still had the scarsto show and to talk about these
(13:17):
stories or these transactionsthat didn't yield the results
that the company had wanted.
So would you?
Speaker 3 (13:25):
say that it looked good on paper, but it didn't
work out so well.
Speaker 1 (13:30):
Yeah, yes, I couldn't help it, it did, it did.
And what they did instead thistime around was that we want to
accompany this the right wayfrom the get-go, with every
stakeholder involved, and thatincludes the human factor, the
culture piece.
So a consortium of consultants,including myself, was part of
(13:54):
this process from the verybeginning.
When the purchasing party andthe acquisition target were not
even allowed to talk to eachother for regulatory reasons, we
were given access to both sidesand we were able to consult
these both parties to the extentof when would the corporate
(14:14):
veil be coming down?
When can they talk to eachother?
How do we moderate theseconversations?
How do we help facilitate theseinternal conversations?
How do we help the respectiveplayers adjust their leadership
styles, adjust their behaviors,adjust their expectations to the
desired outcomes of the merger?
(14:36):
It was a very rewarding project.
It took a long time.
Like M&As do, they are not aone-and-done process.
When you see the news online orin media say, well companies,
abc is purchasing company 123for $7.5 billion big headline
news that sounds like a flash inthe pan.
(14:58):
It's a once-and-done.
It is an 18-months-and-moreprocess, depending on the scope
of the project, until themerging is beginning to be
complete.
It will sometimes take yearsfor it to be complete.
Speaker 3 (15:14):
So the best thing is to plan it's really investing in
the time, ahead of time, asyou're leading up to a
considered merger, even in theprocess of, perhaps, the
negotiations.
If you have somebody that'sculturally in the room with you,
that can give you some contextabout what you're seeing when
you're actually in thenegotiation stage.
(15:34):
Even you're talking tocounterparts from a different
culture, a different language, adifferent framework, and some
of these real things that youcan notice will be in that stage
Before you even decide thatyou're going to write a check or
you're going to actually openup and, as Christian says,
remove that veil.
This can be done by themanagement to notice what's
(15:57):
going on the other side and howcan we actually match those
cultures together to make for aneffective merger when it all
comes to fruition.
Because that little bit ofinvestment at the start can
absolutely pay off dividends fora long-term successful
acquisition that benefits notonly the management and the
shareholders but also the peoplethat are in the organisations
(16:19):
to assuage any of the doubt andthe discomfort and the risk
taking that comes along with it.
So we're certainly advocates forit, because we do this work and
there are many times that weget called in to do this, as
Christian says, and we reallyalways welcome any questions,
any comments, any of yourexperiences that you've had in
(16:41):
being involved in a merger, ofno matter what size it is.
It doesn't have to bemulti-million dollar deals, it
could be just small acquisitions, but if you've had those
experiences, we'd love you toshare them.
Write it down in the comments.
Reach out to us, down thecomments.
Yes, reach out to us.
Tell us what your experience isand what would be one final
(17:02):
takeaway that we could leavepeople with.
Speaker 1 (17:05):
Well, again, shameless plug or very biased
point of view from ourperspective.
Too often in my experience,people like Brett and I
consultants are brought in tohelp with a fraction of the
actual transaction.
I think if you want a merger togo right, you want somebody
like Brett or myself or anyoneelse who's doing this work by
(17:28):
your side.
You want to carve out anexecutive domain for people that
are your chief culture officers, who will help guide you, will
be the sounding board for you asyou are completing this process
.
It's not just a numbers game,it's a people's game, and the
more that sinks in witheverybody in your senior
(17:49):
executive teams, the better itis.
Speaker 3 (17:52):
Absolutely.
Thanks again for listening.
Don't forget to subscribe, hitthat button and that bell or
whatever you want to do toremind you, to let you know when
we put up new episodes.
Of course it's every week andwe're just bringing you content
around the culture of businessand the business of culture.
This is two chaps, manycultures.
Thanks again, good to see youagain, pal, and we'll see you
(18:14):
next week.
All right, see you, bye.
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