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How a Culturally Intelligent Alignment Strategy Can Save Your Next Merger

The Huffington Post The Huffington Post 19/02/2016 Valerie Berset-Price

When tech front-runners Alcatel and Lucent partnered up in 2006, they hoped to push out competitors and develop a powerfully integrated network. Instead they hemorrhaged finances and talent.
It wasn't because their world-famous tech couldn't interface; it was because their workforce couldn't. French Alcatel and American Lucent weren't equipped to handle their language and time differences or their culturally dissimilar management styles, and the newly formed company struggled in choppy waters for several years. The recent acquisition of Alcatel-Lucent by Finnish Nokia in January 2016 adds another cross-cultural element to its global story, and only time will tell if this transition will result in calmer seas.
This goes to show that pulling off a successful international merger and acquisition is more than just a compatibility of industrial strengths, numbers, and hardware. It takes a strong cultural alignment strategy to pull it all together. Here's how.
Add Intangible Assets To The Due Diligence.
People and cultural factors don't show up on a balance sheet, although they are every reason why the numbers present as they do. Don't underestimate the importance of intangible assets, like national cultures, in a merger and acquisition; the minute you do is the minute you lose your two biggest assets: your best employees and all the money they make you.
We've all heard the story of Daimler-Chrysler; what looks like a smart match doesn't always make a successful marriage. Companies wishing to form profitable international bonds must understand and view the human elements of the merger through a lens of cross-cultural compatibility.
Every company and every national culture comes with it's own priorities and driving elements. Global companies can no afford longer push, impose, or enforce objectives in a winner-take-all scenario. Every side must win some, or everyone will lose. And the loss could be catastrophic.
If You Can't Identify and Validate the Human Data, Find Someone Who Can.
As many executives of multinational companies are aware, the cultural component of a workforce isn't a human resource issue, but rather a bottom line one. International mergers and acquisitions aren't successful because of seamless data integration or impeccable accounting; they are successful because effort was taken to make cultural alignment a corporate imperative.
It's a tricky task to be sure, especially when companies must align countries and cultures from around the world. After all, if employees are hindered in their ability to do their jobs because the expectations make no sense in their cultural habitat, or if they are relentlessly unhappy with culturally uncouth management, more weight will be added to an already sinking ship.
Because the stakes are so high, it behooves companies to have trained professionals alongside to make every effort to identify these cross-cultural pitfalls and keep them from derailing an otherwise profitable joining of hands. It takes a thorough knowledge of the courting cultures to understand how they will blend, which objectives will foster a unified enthusiasm, and which factors will require additional tools, training, and time.
Don't hope for the best. Plan for the worst.
Likewise, it's also important to prepare for when--and not if--things go wrong. Weddings rarely go off without a few snags, and business marriages are a magnified union fraught with a core of critics, Capulets, and Montagues. Some call this a "pre-mortem"; an analysis that entails identifying what could and will go wrong as well as supportive strategies to prevent or mitigate the worst effects.
Having a cultural strategy in place helps companies navigate the post-merger minefields as well as lessening the "culture shock" so many companies experience. Mergers and acquisitions are often the "arranged marriages" of the business world; what seem to the parents as an ideal match often wreaks havoc on the strangers who are now forced to live and support each other.
Because this is where so many mergers go wrong, part of your cultural alignment strategy should include involve and unify senior management, prioritize leadership capabilities, and identify ways to increase communication, employee buy-in, and engagement throughout every level of the newly merged organization.
In the end, sometimes one organizational culture will dominate. However, while this works with some M&As, it can be argued that the most successful mergers are the ones that allow for the influence to flow both ways, creating a new corporate synergy in a joined effort of products, services, and teamwork.
There's a reason why it is easy to compare business mergers with human relationships; it's because it is the human element that often makes or breaks them. And like any successful relationship, thoughtful attention to cross-cultural understanding and good communication is key. A culturally intelligent alignment strategy can help mitigate the pitfalls and increase the chances of not only achieving a happy ending but also the successful start of something new.

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