Cultural symphony in PMIs – Value maximization through culture-centric integration

By Patrick Heinemann and Jörg Delhaes

Most companies that acquire or merge with another company do not pay enough attention to the critical task of integrating the values, attitudes, and practices of both organizations. Our project experience shows that up to 30% of the expected value of a transaction can be at risk if employees are not keeping time with the rhythm defined by the leadership of the new entity, larger and different to its predecessors. This study presents best practices for successfully merging corporate cultures during post-merger integration (PMI).

Cultural intergration in the course of corporate integration is a complex and nuanced task. In our experience, it is best viewed as a melody that comes together only when the different parts of the orchestra – concert hall (shareholders), intendant (CEO), conductor (integration management office, IMO), violins and other melodic instruments (business functions), drums and other bass instruments (support functions) – are made to play in harmony before a discerning audience (of customers, suppliers and other stakeholders).

Our vision of the "PMI Orchestra" is based on best practices from more than 500 Roland Berger PMI projects worldwide, insights from academia and more than seventy first-hand interviews with top executives and other professionals. It drives our advocacy for a truly culture-centric approach to PMI at every stage of a merger or acquisition. We apply a synthesis of best practices to address cultural integration comprehensively, with the goal of creating a melody that makes the identity and purpose of the new entity clear to everyone.

As intendant and conductor, the CEO and IMO are key to this process. Between the deal’s signing and closing, they must bring together the orchestra of people responsible for key aspects of the integration, set the stage for the performance by defining the integration goal (from full integration to standalone), respond to dissonances as the assembled experts get to work, assemble a full-scored target operating model for the new entity, rehearse intelligently to let everyone internalize their part before the first day of live performances.

Corporate culture is the invisible bond that holds together companies brought together by merger or acquisition. This study by Roland Beger provides executives with concrete measures to succeed in this difficult task – from conducting surveys and workshops to understand internal dynamics, to analyzing the dimensions of the target operating model, to testing systems, processes, and communication channels at the macro and micro levels. It shows post-merger integration to be a skill as precise and practicable as playing a symphony.

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