Post-Merger Integration (PMI) has been a challenge for many companies, as is amply testified by the countless articles and books written on this subject around the world. Global research indicates that, in most cases, a clash of corporate cultures or incompatible cultures are among the top five reasons why PMIs have not been successful.
Companies are very seldom really interested in understanding cultural issues during the pre-deal phase. In most cases, resources are focused on the negotiations, and on financial and legal Due Diligence (DD) for the purpose of closing the deal. In some cases, companies spend time on operational DD, but very rarely from the perspective of corporate culture. Even those companies that claim to take cultural issues into consideration during the pre-deal phase often face just as many challenges during the post-merger integration as those that neglect this area entirely.
In my opinion, one of the major failures related to culture is that companies are unable to identify the unwritten rules of their organizations. What companies see and observe during the negotiation, the interviews they conduct with key individuals and the various kinds of DD carried out, relate to what I call the written rules – policies, procedures, descriptions, codes of conduct, etc. After closing, when the sweet talk about the deal is over and the integration process starts, the unwritten rules slowly make their presence felt through simple expressions such as “yes, but” or “however”.
These caveats tell us what drives each individual’s day-to-day behavior and reveal the existence of “unwritten rules”, or what I call it “The internal politics of the business”, – the honest advice one would give to a friend about how to get on in the organization.
These unwritten rules are neither good nor bad, only appropriate or inappropriate for what you want to achieve from the integration. You must be aware of them, and plan well in advance on how to tackle them.
But where do the unwritten rules of companies actually come from? They typically start with top management. On the one hand, they derive from the way top management thinks and acts, and, on the other hand from what can be conceived of as the “written” rules that they establish or maintain.
The unwritten rules are what help people survive and thrive. They are a set of highly sensible coping skills adopted by all employees – not just by those destined for the top.