Mergers and acquisitions have underpinned the transformation of WPP into an international marketing group, but chief executive Sir Martin Sorrell is aware of the challenges of uniting people from different business cultures. Keeping control of the ”different tribes” and “warring factions” is hard, he told the FT recently when outlining his pursuit of his latest quarry, Taylor Nelson Sofres.
But companies that can’t grow organically do not want to pass up opportunities to expand. How can they avoid culture clashes, politics and bureaucracy?
The management consultant - Richard Coughlin
The extent of post-merger culture clashes vary according to the type of deal. The risk of warfare is low in arms’ length acquisitions but where the success of the deal depends on realising synergies from integration, the risk of a culture clash is high – and becomes acute in cross-border transactions.
Four key actions can minimise those tensions: first, quickly create a common purpose – rallying everyone round to beat the competition means they have less time or energy to squabble. Next, take the hard decisions on the senior roles early – managers who have no future will be a destabilising force. Third, talk to people even if you have nothing of substance to say because rumours start in a vacuum. Last, start forming the team before the deal is completed, using substantial numbers of staff from the target company, and offer rewards for successful integration. And above all else, the most important factor is defining one culture for the whole organisation. In a company, nothing is more damaging than unmanaged parallel cultures.
Richard Coughlin is a specialist in complex transformations, including post merger integration, at PA Consulting Group.