M&A Cultures Assessment
Depending on how success is defined – whether by shareholder value, customer satisfaction, employee retention, etc. – research indicates that the failure rate for mergers is between 50% and 80%. Regardless of the definition of success, the suggestion is that more than half do not live up to the expectations that were the rationale for the merger in the first place. There are several reasons for failed mergers, among them overpayment, inaccurate assessment of the expected synergies, and cultural conflict. The projective differential can be used to help assess the people and culture related issues at any point in the process:- Understanding the ways in which the cultures differ can lead to a more accurate assessment of whether they can be blended, and if so, what steps will need to be taken.
- Uncovering the areas/departments within organizations that will require more attention or provide unanticipated champions in the process of merging organizations with different cultures can help to target your efforts and increase the likelihood of success.