I walked into my office on that first day and saw the folder on my desk. I picked it up and read it out loud: Employee No. 97642. It hit me—I was now just a cog in the wheel. At that moment, I realized everything was going to be different.
This story, describing the impersonal aftermath of a merger, was recently shared among a group of industry leaders who were discussing how emotional intelligence affects workplace performance and morale. It highlights a rarely discussed but extremely important element in the deal-making process: culture.
I talk a lot about culture because I believe in it. Those who don’t are missing the boat.
This year’s M&A issue features cybersecurity during M&A, the complexities of cross-border and international M&A, and the intricacies of translating values and business models to foreign markets. As you read along, whether you’re looking to buy or sell at home or abroad, keep in mind the importance of culture when you’re sitting across the table from your potential partner.
Culture is all about the hard and soft values your organization expresses in its behavior. It is the key to wins and losses. It is your brand. It is your employees. It is your physical office space and the fine print in your employee handbook. Culture is not something you can fake. Culture 101 is about being authentic.
There’s a Deloitte white paper on my desk that warns not to act solely on products or numbers when considering a merger. The paper’s premise is fitting for this issue: “Organizations today undergo mergers, acquisitions and joint ventures for many reasons: among them, to acquire technologies, products and market access; to create economies of scale; and to establish global presence. However, culture has emerged as one of the dominant factors that prevent effective integrations.” Case in point, Employee No. 97642.
Culture has to be baked in to everything from decision-making and leadership style to adaptability and appetite for risk, to how people work together and build relationships. Then, and only then, can it create better value for your clients and ultimately help you realize success.
Let’s face it, culture alone may not stop an attractive transaction (a fact Deloitte also acknowledges). So it is the keen responsibility of the people managing the deal to ensure its success by embracing, instead of ignoring, it. If you’ve recently bought or sold, don’t throw your hands up in defeat. Even after the deal is done, steps can be taken to ensure a smooth integration or, perhaps even better, the birth of a new culture. The point is, your employees are your number one asset and they should not be cast aside.
The 2017 Edelman Trust Barometer found that the credibility of CEOs fell by 12 points this year to 37 % globally. According to Edelman, the primary axis of communications is now peer-to-peer, underscoring the role employees play as your brand ambassadors, whether you realize it or not.
Culture gives meaning to your company. Culture is your internal brand and your external insights. It is your values and beliefs, and it is linked to measurable business results. Done right, making culture a major component of your next merger or acquisition might actually turn a cold file folder stamped with an employee number into a real person eager to go to work every day.