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SIKORA ASSOCIATES, LLC
Culture Due Diligence
PAGE UNDER CONSTRUCTION
Firms invest hundreds of hours and thousands of dollars assessing the financial viability of a proposed merger or acquisition, but...
nStudies consistently report that 60-80% of M&A's are viewed as financial failures (e.g., outperform stock market or deliver profit increases) and that about half simply fail.
nIn a recent Tower & Perrins survey of 132 executives (2003):
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¨The top cause of failure was “cultural incompatibility” (57% of execs)
¨Cultural alignment was named by nearly half (47%) as the most critical “people issue” to address, second only to effective communication (62%)
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In a survey of senior managers by Society for Human Resource Management (2005):
¨Two-thirds had been involved in three or more M&A's in previous 5 years
¨Only 43% of those reported success in expected pre-deal synergies
¨Incompatible cultures named as "major obstacle" to success by over half (56%)
“Culture is deep. If you treat it as a superficial phenomenon, if you assume that you can manipulate it and change it at will, you are sure to fail.”
Ed Schein
Culture exists at several levels
¨Artifacts – visible objects, superficial behaviors, “climate” that is easy to measure
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Espoused Values – what we say we stand for, written mission and vision statements
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Enacted Values – what are behavior says we stand for, “taken for granted” patterns that demonstrate what really matters
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Underlying Values, Assumptions, Beliefs – shared, usually unspoken (tacit) views of the world, what success is, what matters, who matters, and why
If you don’t know what’s under the water it’s hard to avoid collisions.
SIKORA ASSOCIATES, LLC
Helping organizations understand...
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What's under the surface
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