There is a lot of talk about merging cultures within a business after a merger of companies. Everyone talks about the efficiency savings made and the increase in staff morale. But is it as easy as people think?

Let’s take the example of company A., They go on an acquisition binge to buy more businesses in their industry to consolidate costs and increase market share, they do a culture assessment of their own business, they are family-owned with a strong collaborative culture so want to merge the new culture into the business.

They seek out businesses that share the delivery standards, good customer base and a collaborative culture, over time they find 4 companies 1,2,3, & 4 to acquire and bring them into the group.

They spend money on rebranding the business, they lose some customers because they were loyal to the old company and the change gives them an opportunity to move on, which is normal, they also lose some staff through natural attrition for the same reasons.

But now they just have 5 companies with the same name, the culture has not changed, company 1 still sees itself as company 1, the staff ponder over the “good old days”, they join in but only have company 1 solutions to any issues, the leadership teams become merged first and there is always a little bit of protectionism from them towards their original staff.

a ball of plasticine

You end up with a ball of plasticine with 5 colours, not a single ball all of the same company. these differences spread and entwined with each other, impossible now to pull apart but never mixed.

When people talk about merging companies, merging the cultures is the hardest part, it takes one business to be dominant and to force others to change which itself can be detrimental to staff, and customers as the acquired businesses go through flux to make the changes.

As with plasticine, the only way to create a ball with a single colour (culture) is to pull it apart, fold it and squeeze it back together in a ball multiple times before the colours (cultures) merge into a new colour.

If the primary company is large enough, or strong enough it can become the dominant power, but if you are buying businesses that are of an equal standing then the colours would become a whole new colour.

At Mobius Capital we don’t have all the answers, and no one does, but we believe in retaining the cultures of the businesses we acquire, keeping their identities but creating a cultural change of openness and support between each of the businesses, the same efficiencies can be found, joining company operations where it makes sense to do so, but retaining what was the company culture at the core

What do you do to merge cultures within your own business? and if you are not in acquisitions, would you consider selling your business to a group that is looking to retain the culture that you have created?

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