Mind the Cultural Trap in M&A

We are all familiar with the explicit and hidden risks in M&A, as we all went through the painful process of a Due Diligence aimed at minimizing the risks of an acquisition. Legal due diligence, HR due diligecence, tax due diligence…..

Hundreds of consultants and millions spent to gain an adequate level of knowledge and confidence… Still, as we all know, 9 out of 10 operations fail, despite the length and the depth of the Due Diligence. In many cases this is not because of business model mismatch or «industrial» unfit. In many cases the merger or the acquisition fails because of the Cultural Gap between the key Managers or the Management Teams of the  Organizations. And nobody run any due diligence on this before the transaction was executed and boldly announced to the business community…

Running a thorough analysis on the Cultural fit between the Organizations – before a merger is executed – might sound like a waste of time…..it is not, and can save you millions and help you to minimize the risk of a merger between organizations that have a cultural mismatch

What we observed is that non-organic operations have a higher chance of succeeding if managers and leaders (on both sides) have beeen educated to become «T Shaped»: very knowledegeable about their specific business, but also open and flexible to adapt to a new environment or new challenges.

To cope with the new world you need to become T-shaped professionals

• The more you move into complexity, complex roles and jobs, higher responsibilty, wider geographical exposure, intercultural environment…the more you need to get T-shaped to succeed
• Organizations need to become T-shaped and not arrow shaped or long-line shaped…
• The vertical bar on the T represents the depth of knowledge in a specific area, whereas the horizontal bar is the broad understanding across different disciplines