THE PROBLEM

 Mergers and acquisitions have underpinned the transformation of WPP into an international marketing group, but chief executive Sir Martin Sorrell is aware of the challenges of uniting people from different business cultures. Keeping control of the ”different tribes” and “warring factions” is hard, he told the FT recently when outlining his pursuit of his latest quarry, Taylor Nelson Sofres.
But companies that can’t grow organically do not want to pass up opportunities to expand. How can they avoid culture clashes, politics and bureaucracy?

THE ADVICE

THE EXECUTIVE

Rebecca Ranninger

Every business has a unique culture. Even when seemingly similar companies combine, some level of culture clash, along with its attendant internal politics, is inevitable. These undesirable side-effects can be significantly mitigated with clarity of purpose and honest communication by the right people. During my 17 years at Symantec, we have completed more than 60 acquisitions, and we still learn something new every time. What has remained consistent, however, is the need for absolute agreement as to exactly what we are buying. Is it a particular technology? An established product? A brand? A particularly skilled group of engineers? A position in a given geography?Once this purpose has been established, consistent, honest, and well-thought out communications to the employees of both businesses, as early as possible, can go a long way to minimise some of the unavoidable frictions.

While the acquiring company must clearly set the direction for the future business, the executive leadership of both companies must spearhead the communications. Effectively conveyed, consistent communications can set the right course from the start and smoothly transition the teams. Employees can easily detect insincerity, so only those executives who are unequivocally and absolutelydedicated to the success of the combinednew entity should ultimately deliver the future vision.

The writer is chief human resource officer, Symantec

THE MANAGEMENT CONSULTANT

Richard Coughlin

The extent of post-merger culture clashes will vary according to the type of deal. Clearly,The risk of warfare is low in arms’ length acquisitions but where the businesses remain separate entities. Wherethe success of the deal depends on realising synergies from integration, the risk of a culture clash is high – and becomes acute in cross-border transactions.

My own experience suggests there are Four key actions that can minimise those tensions: first, quickly create a common purpose – rallying everyone round to beat ing the competition means they have less time or energy to squabble. Next, take the hard decisions on the senior roles early – managers who have no future will be a destabilising force. Third, Communicate talk to people even if you have nothing of substance to say because rumours start in a vacuum. Last, start forming the team before the deal is completed, using substantial numbers of staff from the target company, and offer rewards for successful integration. And above all else, the most important factor is defining one culture for the whole organisation. Multiculturalism may be laudable in other spheres but In a company, nothing is more damaging than unmanaged parallel cultures.

Get these steps right and you stand a better chance of achieving cultural harmony and a successful transition.

The writer is a specialist in complex transformations, including post merger integration, at PA Consulting Group.

THE ACADEMIC

Scott Moeller

Think back to your first love. Did it end because you tried to change each other or tried to embrace each other’s personality? Of course, Here, however, the problem is This isn’t about romantic relationships, it’s about the problem of bringing together two companies with established cultures. But a reality check is healthy, especially when you have just done a deal and are about to launch a costly internal integration campaign. With the failed romantic relationship, it didn’t help to discuss what some combined personality could look like but it did help when you remembered what first attracted you to each other.

Back to business mergers: why waste time articulating common cultural aspects? Instead, focus on the goal. Winning business. Quickly. Note the success of Deutsche Bank with its marketing campaign of ‘Leading to Results’ after it acquired Bankers Trust, or Santander with Abbey.

These days, looking at deals, you can’t help but get the impression that the cultural aspect of deals is a bit over-engineered. You’ll notice the internal communications teams are bigger than the external PR/marketing teams. Being internally focused gives your competitors a field day.

Leadership is key to successful mergers, and leaders go with their gut. Why did they buy the other company? Because of their culture? No. They were bought for their business. That’s the message. The troops – and clients – will follow.

The writer is a professor at Cass Business School and co-author of Intelligent M&A (John Wiley)

THE PR

Neil Hedges

The financial aspects of any deal command the headlines, but it is the cultural fit that will delivers the value in the long term. Too many organisations celebrate the potential power of an enlarged organisation but neglect the people whose effort and commitment are needed to deliver it in practice.

Inevitably, this starts at the top: the architects must have a firm grasp of the new organisation’s itsvision and strategy and the way it will pursue these goals. From there, every merger or acquisition needs a clear and robust integration plan that puts effective communication at its heart and keeps the principles of clarity and consistency front of mind. The communications effort must recognise the differing requirements of its audiences from employees to shareholders and customers, but deliver the messages in a consistent way throughout the merger process. Trying to split the PR opportunities from employee activity undermines any attempt to achieve coherent and integrated communication.

The writer is chairman of Fishburn Hedges