Smoke & Mirrors: Reducing cultural impact post close

WANTED: A CEO who hasn’t been told that cultural alignment will make or break their acquisition post-close. The importance of cultural integration to long-term acquisition success has been so thoroughly promoted, discussed and explored over the years that it’s surprising that acquisitions are conducted at all without a depth of cultural analysis that would make legal due diligence appear superficial.

And yet that’s just the point: Despite the acceptance by most executives that cultural differences remain the leading cause of M&A failure; and irrespective of all the research, articles, best practices, services and tools that firmly place cultural assessment and alignment at the heart of successful acquisition and integration, a fact remains clear to anyone working in the field of M&A: Cultural differences identified pre-deal rarely prevent that deal from completing, even when those differences are acknowledged to be significant. Recent research supports this view, in which 76% of executives surveyed believed their deals would go ahead regardless of the degree of cultural fit.

So why the disconnect? Does it mean that a large majority of executives across the world are regularly fooled into believing that the academics and consultants have it all wrong, only to pay
he price later? Or does it mean that we, as integration experts and professional service providers, still haven’t found the right approaches, services and tools to help leaders who – rightly or wrongly – will continue to view cultural differences as important enough to keep in mind during integration, but not important enough to influence the deal? At BTD, we believe that, despite (or indeed as a result of) the breadth of cultural assessment offerings in the market, most businesses still either make too much or too little of culture. We also believe that – one way or another – it still helps to have some level of awareness of the differences in...