CFO Insight LLC
Culture clash can be devastating to a potential merger, if mismanaged. Unfortunately, many executives only consider the international aspects of a merger to affect culture risk. In fact, culture may include major difference among regions, facility concentration, company size, or functional areas.
Let’s look at some examples of major culture variance:
And of course, international M&A potentially has each of the above challenges, in addition to those of differing native language, legal, social and work environments (consider the unions and work councils required in some countries). Add potential extreme time zone challenges – perhaps as much as 13 hours - 15-30 hours transit times for personal visits to international locations, and you may encounter insurmountable M&A challenges.
My advice to succeed in these integration challenges is to thoroughly understand the business environments of all companies and locations involved in the M&A transaction, jointly develop an integration plan with the formal (on the organization charts…) and informal (those that get the work done…) leaders in the organizations, and aggressively mange the integration plan. Personal attention by integration leadership will be critical to success – visit the business units personally to establish a relationship with the leadership. A key part of any plan must include a communication’s strategy and plan, and listening to all sources of information related to the transaction (message boards; web-sites; blogs; suggestion sites; labor issues; customer and vendor feedback; sales and customer service input etc.). Understand that communication in the twenty-first century is instant, and broadcast worldwide without benefit of editing or verification.