Since we started in the field of mergers and acquisitions in the 1990’s we’ve been conducting ‘cultural assessments’. These evolved from studies into the failed mergers of the 1980’s which fingered ‘culture’ as the culprit.

This quote is attributed to Peter Drucker, but there’s no evidence to show he actually said it…

“Company cultures are like country cultures. Never try to change one. Try instead to work with what you’ve got”

What Drucker actually said in a piece in the Wall Street Journal in 1991 entitled “Don’t change company culture: use it” was more nuanced:

“What these [businesses] require are changes in behaviour. But ‘changing culture’ is not going to produce them. Culture - no matter how defined - is singularly persistent. Nearly 50 years ago, Japan and Germany suffered the worst defeats in recorded history, with their values their institutions and their culture discredited. But today’s Japan and today’s Germany are unmistakably Japanese and German in culture, no matter how different this or that behaviour. In fact, changing behaviour works only if it can be based on the existing culture.” 

What’s odd about this piece is that Drucker considers ‘behaviours’ to be separate from ‘culture’ - we suggest they are two sides of the same coin.

Equally the example of Japan and Germany losing a global war doesn’t seem relevant to whether or not their national cultures are appropriate for global trading nations. We have also learned over the last few decades that culture is more finally nuanced than national stereotypes: culture exists in a rainbow from teams to organisations and their national environments. We suggest team cultures are more relevant for organisational performance than national culture.

As regards the statement “Never try to change one…”, we would agree that trying to change a company culture in any normal change-management situation would be like choosing to boil a small reservoir to make a cup of tea. 

That’s not true in the specific case of M&A.  

Something just for mergers and acquisitions? Why deals only?

9 times out of 10 it’s going to be easier and quicker to work within the confines of the cultures in a company and find a way to achieve your aims.

M&A is different as there is a need to get the cultures of the target and acquirer working together in a constructive rather than destructive cycle. Even where the desired level of integration is minimal and light-touch, the leadership team of the target will need to find a way to navigate the decision-making structures and resource allocation mechanisms in the acquirer.  

With a deal there’s also the scale of the project both in time and value at stake to justify the effort to ensure culture doesn’t act as a roadblock to your strategy.

When it comes to M&A…no post-deal plan would be complete without a ‘cultural survey’. What’s never been clear to anyone is what the hell anyone does about it, other than sitting through the management presentation of the survey results and saying ‘that was interesting’. We think it is time more companies used cultural change alongside strategic change to achieve their objectives.

Sincerely,