‘Cultural alignment’ in M&A: more about feeling good than high performance
What if the cultural alignment we’re told to aim for is actually harmful to the performance of the organisation?
The concept of ‘cultural alignment’ driving performance is a corner stone of post merger integration plans, and it feels like common sense… a group of people with not just shared vision & values, but the same ways of thinking. In an aligned organisation meetings flow smoothly, decisions are made unanimously and are swift to be agreed.
Research popularised by Matthew Syed in Rebel Ideas in 2020 shows that diverse thinking in teams and internal conflict in teams actually deliver better results, specifically in complex situations.
M&A, and post acquisition transformation, certainly meets the definition of complex change.
In high performing teams, researchers found that there are more disagreements, more conflict, and people are less certain they have come to the right conclusion.
Rather than align behaviours, decision making and mental models of the target and acquiring leadership teams, research suggests you should harness the conflict for better performance.
Taking a step back in time to due diligence, the implication is that when you’re looking at the target leadership you’re not looking for how aligned they are with your way of thinking, nor how ‘good’ they are. If you’re looking to improve the quality of your decisions as a combined future management team, you want to find leaders who think differently to you.
With this in mind, it’s funny to think back to all those M&A articles on ‘how to achieve alignment post-deal’… The leadership in your acquisition target are likely to have extremely relevant knowledge and behaviours to the challenges you face. Shouldn’t you be thinking how to capture this and harness it, rather than align it with yours and lose it?
Sincerely,
