Why do so many mergers fail? “One Culture” is often an illusion. Decryption of managerial errors and ways to achieve a successful union.
“Culture eats goodwill for breakfast”, Peter Drucker could have prophesied. According to studies, between 40% and 85% of merger deals fail to create the promised value. However, at the moment of docking, the Epinal image of the captain of industry triumphs: he succeeds by galvanizing the teams. Cultural shock too often remains poorly addressed and organizational myopia sets in, with gaps widening between what is happening on the ground and strategic injunctions.
Decryption in 3 acts.
Act I. The announcement of “One”: unity by decree
The project has been announced to the market, the social processes have been carried out… We can finally talk to the assembled teams. The first message must be powerful and mobilizing, affirming the ambition to leave no one behind.
Thus the “One xx” project was born for the teams (xx corresponding to the name of the company).
The bug is twofold. The problem is that the “One” remains at this stage only a leader’s aspiration. For employees, it is just an intention. At this moment, in the best case scenario, everyone observes their counterpart in the absorbed entity (or which absorbs ours) with cautious curiosity; in the worst case, the trench warfare to see who “will have the upper hand” has already started in the cafeterias.
Secondly, the more unity is hammered, the less it exists: brandishing the “One” means recognizing that unity does not exist. Why insist that we are “One” if it is obvious? By imposing this label, management is sowing the seeds of cynicism. Lacking concrete benchmarks on what this union entails, everyone is retreating to their historical bastions. To state the “One” too early is to freeze divisions.
Act II. The remodeling of the COMEX: the alignment of the facades
After this announcement, speed of execution will be essential: proof is needed that the project is coming to fruition. Those who, at the highest level, do not immediately embody the ambition of “One” are thanked. Alignment is non-negotiable.
This action to display an alignment of the Management compromises the creation of a collective. Those who are ousted under the pretext that they are “not in the project” were often those who dared to raise the frictions on the ground. They constituted the “old guard”: certainly sometimes resistant, but endowed with immense historical legitimacy. By cutting them, we cut the bridges that could have taken the troops towards the target, from their historical culture to a common culture.
Second pitfall which reinforces organizational myopia: what freedom remains for COMEX members to report the reality of culture shock? After seeing their peers fall, silence becomes the rule of survival. Organizational myopia takes over: the top thinks it is piloting a unified ship while, on the ground, the flotillas are still seeking a common course.
Act III. Operational asphyxiation: A “bugged” organization
The organization now lives at three speeds. Top Management is already thinking about “what’s next”. The field sees every day the gaping cultural divides that no one dares to speak openly about. Between the two, Middle Management is divided.
We then try to treat the symptom with inspiring conferences on “managerial courage” or “confidence”. Wasted effort. We don’t release energy through words when managers are worried about their own survival.
The result is a loss of performance resulting from two phenomena in particular.
First, considerable energy is expended in comparison with others. For example, the Department will launch a customer orientation program. In its implementation the teams will spend a lot of time explaining that “they” are natively customer oriented and that efforts must come first from others. The teams look at each other from the sidelines rather than looking towards the customer.
Second phenomenon: the end of feedback. More precisely, the managerial strata kill the rises from the field before they reach the top. Who will dare to carry the message that the “Day 1” cooperation was only a fiction?
Inertia sets in. Value evaporates.
Epilogue. Don’t ask for unity, give them a challenge
To succeed in the alchemy of a merger, the CEO must exchange incantation for diagnosis and dialogue, in three stages.
1st step, recognize the worlds present: We do not build on a void. We must promote the historical pride of each entity. It is above all a question of promoting heritage in order to better detach ourselves from it.
2nd step, explain the change: Culture is not a vague concept; it translates into behavior. What are we stopping? What do we keep? What are we creating?
3rd step, carry a unifying ambition. The “One” is not an end: It is a means. Don’t ask your teams to be “One” for the sake of unity. Give them a higher ambition – a market challenge, a societal mission – which makes cooperation essential. For Disney-Pixar “Restoring magic through innovation”; for Sandoz and Ciba-Geigy which became Novartis “Becoming the world leader in life sciences”; for Worldline, since the Pierre-Antoine Vacheron era “Being the bearer of the sovereignty of payments in Europe”.
So that culture does not devour value for breakfast, we must start by facing reality: unity cannot be decreed, it must be earned.
