One of the most commonly cited reasons for acquisitions failing is poor cultural fit with HBR commenting that “According to most studies, between 70 and 90 percent of acquisitions fail”. Based on experience, this appears alarmist but that does not mean that there are not significant risks to manage or and opportunities to take. So where to start?
Based on our experience of acquisition work, a simple but effective starting point is to frame your approach by asking four simple questions:
- Think about the new employees: Many employees are confused and concerned about the impact of an acquisition, so deal and business rationale can seem incidental to affected employees.
- Think about the employees from existing teams: Few acquirers consider the impact to staff of the acquirer assuming that they will share senior executives’ enthusiasm for and understanding of a deal, but their roles can be equally at risk and they may be asked to work harder to make the acquisition work.
- Imagine how the integration will work: While many promote integration transformation, we do not have an ‘integration fix’. The reality is that integration by ‘sheep dip’ is more likely to backfire and that some diversity of culture between teams is not a bad thing. True and to state the obvious, an overall culture of important behaviours and standards is never going to be a bad thing but that is not the same as creating, at vast expense, a monolithic and disengaged culture.
- Do it properly: Whether the acquisition transaction is subject to TUPE or not, our experience is that there is no benefit in a half measure. The legislation is there, the tribunals know the law, employees have access to legal protections and more importantly a very good sense of right and wrong. Effectively consulting with staff is an important opportunity for any acquirer.
We work with management teams to provide them with the insights and capabilities to deliver change in a multidisciplinary way supporting leadership, people, finance, legal and IT considerations. We can roll our sleeves up although most of the work is based on embedding a framework for improvement and ‘skills transferal’, giving your team the ability to make cost effective and long lasting improvements. Our experience is based on supporting mergers, restructuring, cost reduction and re-energisation programmes across the middle market as well as international businesses.
If you want to expect more from your board and professional advisors, contact us.
