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Mergers and Acquisitions Culture Clashes - Diagnosing and Dealing with Them

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As part of our series on the role of culture in Mergers and Acquisitions, we are delighted to bring you renowned organizational psychologist, author and thought leader, Philip Mirvis, Ph.D. Join Bryan Adkins, President of Denison Consulting, as he hosts Dr. Mirvis in the session: “M&A Culture Clashes: Diagnosing and Dealing with Them.” In this webinar, Dr. Mirvis will discuss "culture clashes" in mergers and acquisitions: how to spot them during due diligence, how to diagnose them once a combination is underway, and how to deal with culture differences in putting companies together. Culture clashes can be a barrier to making mergers work. They can--and should--be understood and managed. Here we'll look at how culture can be assessed through measurement tools and managed through different integration strategies.

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  • 1. M&A Culture Clashes: Diagnosing and Dealing with them
    Philip H. Mirvis
    Fortune magazine “merger maven”
    with Mitchell Marks
    @DenisonCulture.com
  • 2. M&A Culture Clashes: Diagnosing and Dealing with them
    Philip H. Mirvis
    Fortune magazine “merger maven”
    with Mitchell Marks
    @DenisonCulture.com
  • 3.
  • 4. Merger hit rate
    65-85 % of Mergers and Acquisitions Fail
    Vs. precombination earnings of 2 cos.
    Vs. promised returns by executives
    Vs. costs of capital
    WHY?
  • 5. Combination Phases
  • 6. Define the End State
    acquired
  • 7. Company A
    Engineering & Marketing
    Quality
    Matrix
    Planning
    Professional
    Collegial
    Teamwork
    Our Way
    Company B
    R&D
    Speed
    Functional
    Ready, Fire, Aim
    Entrepreneurial
    Political
    Star System
    My Way
    Theoretic Synergies
    Leading Edge Technology
    Broader User Base
    Faster Time to Market
    Product Reliability
    Technology Transfer
  • 8.
  • 9.
  • 10. Think
    Organization
    & Culture
  • 11. How and where to Integrate?
  • 12. Degree of Integration
  • 13. What’s happening in this picture?
    Company A
    Company B
  • 14. Physical Signs and Public Behaviors
    Norms and Values Private Behaviors
    Beliefs on ‘Human Nature and Reality’
    “Layers” of Culture
  • 15. Culture Clash: Stages
    Perceive Differences
    Magnify Differences
    Stereotype
    Denigrate
    Same or Different?
    Very Different!
    They are all that way
    We are good; they are not.
  • 16. Perceive
    Differences
    Economic Consulting
    Business Consulting
  • 17. Magnify Differences
    Stereotype
  • 18. We vs. They
  • 19. Win vs. Lose
  • 20. Diligent Due Diligence
    Synergies: Strategic and Financial “Fit”
    Organizational and Cultural Fit
    Complementary organization structures/systems
    Depth of management talent
    Understandings of the market
    Cultural norms and values
    HR relations, stakeholder issues
    Do your homework- Internet, reporters, academics, retirees, former employees, etc.
    Culture Surveys!
  • 21. The Denison Organizational Culture Model
    Mission
    Defining a meaningful
    long-term direction
    for the organization
    “Do we know where
    we are going?”
    Adaptability
    Translating the demands of the business environment into action
    “Are we listening
    to the marketplace?”
    Consistency
    Defining the values
    and systems that are the
    basis of a strong culture
    “Does our system
    create leverage?”
    Involvement
    Building human capability, ownership, and responsibility
    “Are our people aligned
    and engaged?“
  • 22. Software Acquisition
    Overall strong profile
    Key areas for leverage: Teamwork, Empowerment, Creating Change, Agreement and Coordination & Integration
    Need for Strategic Direction & Goal Alignment
    Integrated IT Company
    Stronger Internal Focus
    Key areas for leverage: Teamwork, Empowerment, Core Values, Agreement and Goals & Objectives
    Need for Strategic Direction, Capability Development & ADAPTABILITY
  • 23. Software Acquisition
    Integrated IT Company
  • 24. Culture & Integration
    High
    Combine
    Carefully
    Combine
    Quickly
    Coordinate, Combine
    Slowly
    Integration:
    How important
    to Strategy?
    Savings? Synergy?
    Combine as Needed
    Separate
    Low
    Hard
    Easy
    Culture Clash:
    Ease of Integration?
  • 25. Post merger cultures
    Multicultural
    Integrated: Distinct but all part of the family
    Pluralistic: Many tribes, in confederation
    Segregated: Superiors and inferiors
    Monocultural
    Melting Pot: One “happy” family
    Pressure Cooker: One family or else
    Ethnocide: Kill ‘em off

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