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Managing the people and culture side of M&A

Jan 09, 2023
By: Tom Cox

What happens when an entrepreneurial company is acquired by a mature one? There will be some key differences among the combined groups of employees, so companies want to minimize the conflict for the easiest possible transition.

The Predictive Index can help

Analytics from the Predictive Index can help combined cultures and teams to understand each other better — seeing their differences as well as commonalities.

This in turn helps with communications among teams. Individually, the analytics give managers the ability to understand members of the team, and the analytics provide information on the employees to leverage.

The Predictive Index assessments provide the data necessary to create the most effective transition possible due to a merger or acquisition.

A famous merger

In 1998, German manufacturer Daimler-Benz merged with U.S. automaker Chrysler Corp. for $38 billion. Industry analysts hailed the move, saying it would combine Daimler-Benz’s legendary quality with Chrysler’s low-cost manufacturing expertise. But less than a decade later, Daimler-Benz unloaded Chrysler for just $7 billion.

What went wrong? Everything. In a classic example of corporate culture clash, two companies from different countries with different languages and different management styles simply could not mesh.

Germans blamed the Americans for quality problems. Americans accused the Germans of arrogance. Instead of creating a trans-Atlantic industrial powerhouse, Daimler-Chrysler became the latest in a series of well-publicized merger failures.

What if you implemented M&A consulting and third-party merger support?

Combining two organizations can create a new and better entity. But the process is complicated. It involves assessing each organization’s financial and operational strengths, customer base, market presence, product or service expertise, organizational culture and myriad other factors.

An objective, premerger analysis by an outside party can help determine the best path to success. They can help before, during and after the merger or acquisition is complete. Afterward is an especially good time for outside assistance to be of tremendous value to the management team in identifying potential problems and developing new strategies to solve them.

You can explore these questions and more with your M&A consultant:

  • What are the similarities and differences among the companies?
  • What will the new structure look like and who will fill the boxes?
  • How will leaders make the correct decisions in those arenas?
  • How is the new culture defined and how is it communicated?
  • What is the benchmark for new roles, if any?
  • What are the strengths of the current staff members?

How Wipfli can help

The M&A consultants at Wipfli can help guide you through the entire complex process, from pre-deal planning and deal completion through post-deal integration. In addition, our organizational performance consulting team can help with blending cultures. Learn more about Wipfli’s organizational performance consulting services.

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