Utilising Business Culture for M&A Success
Business culture is one of the most influential factors when it comes to mergers and acquisitions. Unfortunately, it is also often one of the most overlooked.
When it comes to successful integration, culture issues are one of the biggest obstacles to overcome. The effective merging of two businesses is almost impossible if the cultures are vastly different from one another and ignoring integration can present significant challenges further down the line.
In order to give their businesses the best possible chance for successful M&A, business leaders should be utilising culture to create an attractive proposition for deal making, and consider the following:
The importance of planning
When businesses finally come to the realisation that culture is proving to be a blocker when it comes to M&A, it is often too little too late. Culture should not be an afterthought that is shoe-horned in an M&A strategy, it needs to be developed and nurtured from day one. However, where this has not happened, it should at the very least be at the top of the agenda as soon as a business starts to think about acquiring or selling. A strong culture throughout the business means that news of M&A activity is less likely to shake the foundations of those talented employees that you have worked so hard to acquire and nurture.
Consider the transaction
Recognising aspects of your own business’ culture in the early stages will enable effective planning to complete a deal with a company that has a culture aligned to yours. Taking into consideration the type of transaction being undertaken is key: will your target company fully integrate with yours? Will the companies retain their own identities? Culture plays a large part in this, and clearly defining the type of business culture that will support your own is fundamental to ensuring that the deal is a success.
Identify a leader
More often than not, multiple CEOs trying to lead one merged company results in a chaotic and challenging environment. Ultimately, someone needs to be in charge, and sharing the responsibility will create an unbalance within a business’ culture. Identifying your leader in the early stages, and recognising whether they can adapt to and embrace the cultures of both businesses, will result in organisational unity and successful integration.
Too many businesses fail to recognise the importance of culture within a deal until it is too late. To ensure that their deal is completed successfully, businesses must utilise the power of business culture throughout the M&A process, from the early planning stages right through until the transaction is completed.
With experience in a number of key sectors and representation throughout the Americas, Europe, Africa and Asia, Benchmark International can connect you with the right opportunity. To find out more, visit http://www.benchmarkcorporate.com.