Culture clash is one of the most frequently cited reasons for failed acquisitions. How can something that seems so soft and difficult to measure undermine the potential resulting from an acquisition?
Easily. When cultures don’t align, people become non productive and resistant to change. Some may even find themselves unqualified for the new circumstances and expectations. Working with a business psychologist might offer the quickest remedies to the situation and generate higher levels of productivity and success for the venture.
Following are four key areas where a business psychologist can assist in minimizing the impact of culture clash on the ability to move forward post-acquisition.
Accelerate your understanding of key leaders and teams. Executive and management assessments can provide a comprehensive assessment of key strengths and target areas for development. Using structured interviews and psychological testing tools, these assessments can save you time and money in providing a comprehensive snapshot of these individuals. These assessments provide an objective third-party look that may confirm your gut feelings or provide new insights into forging a productive working relationship with key leaders and teams. Consider it the due diligence of your human capital.
Overcome resistance to change. As a PE firm, you frequently observe the symptoms of resistance to change: avoidance behaviors, angry outbursts, tears, and procrastination. It’s importance to get a better understanding of the root cause of this resistance, fear. Rather than dwelling on fear (as time is money in the PE world), we shift the emphasis to “Honor tradition. Pioneer change.” The key is to determine how to capitalize on the strengths of the acquired organization while making the necessary changes to increase profitability and productivity and achieve the desired return on investment to satisfy investors and key stakeholders.
Coach key individuals. There are often key players critical to the success of the acquisition who struggle. This may require more intense intervention on an individual level. The goal is to align the mindset and behaviors of these individuals with the strategic objectives of the new entity. Our counsel is to act sooner rather than later here. You may need to consider an intervention if key leaders are having difficulty implementing and internalizing the new strategy, adjusting to the pace of change, or prioritizing and translating key messages from the new ownership.
Align organizational culture with business goals. Organizational culture assessments can provide a quick snapshot of strengths and weaknesses. These tools provide an insight into key areas that impact execution, strategic alignment, adaptability, and employee engagement that research has linked to ROI. This data provides objective information that can inform the development of specific action plans that contribute to the success of organizational objectives.
Business psychologists possess a unique set of skills that can be applied early to increase the success rate of acquisitions. These skills can be helpful in avoiding or minimizing potential culture clashes, allowing PE firms to realize the financial objectives of the acquisition more quickly.