Feb 24, 2015

Every day in the news lately you read about the latest mergers: Airlines, pharmaceutical companies, insurance companies, large retailers like Staples and Office Depot, all consolidating for so many business reasons.

Some are successful and create flourishing companies that benefit stockholders and employee’s careers. But here’s the really scary reality: It’s been well documented over many years that up to one-third of mergers fail within five years, and as many as 80 percent never live up to their full potential.

The main reason for this is what has been called “cultural clash.”Every company has a culture just as every person has a personality. The culture is the unwritten ground rules and the way we do things around here.

A cultural clash occurs when two companies have different styles, habits and priority of values. Imagine a company in New York City that prides itself in being direct and “telling it like it is” merging with a “Midwest polite” company where people live by the credo, “If you can’t say something nice, don’t say anything at all.” There are bound to be cultural clashes once the marriage takes place.

Avoiding a clash begins with being mindful of our thinking

How can companies avoid cultural clash, and how can leaders and employees best deal with the change so it doesn’t produce undue stress and strain for them? The answer lies largely in the stories we make up in our thinking.

The prospect of a merger and the change it will bring can be exciting to many people who see change as, well, exciting. That same change can be unwelcome and downright scary to others. For many people, this major change shifts the foundation of the comfortable known to the uncomfortable unknown.

People in this camp are likely to think things like, “What happens now? What is this new company? How will I fit in? What are ‘they’ like? How am I going to be affected? Will I lose my job? Will I end up doing twice as much work?

The less they know about what will happen, the more they are likely to fill in the blanks by imagining what will happen, or what won’t happen. In other words, their thinking will have a big impact on how they personally adjust to a shifting business world. Since fear of the unknown is the enemy, the sooner the new game is clear the sooner things can settle down.

Leaders who are considering, or currently in the process, of a major merger or acquisition will find our thought paper, Culture Clash in Mergers and Acquisitions, a helpful guide.

My insights about avoiding culture clash are in this video:

Navigating a merger with a healthy state of mind

Harry Levinson, a management psychologist and professor emeritus at Harvard, always stressed the psychological consequences of the merger experience. He used to say that even when a merger offers new opportunities it still tends to be perceived as a threat to one’s equilibrium.

Whether a merger is for the better or worse, it throws relationships, work behavior, and support systems out of balance. If these psychological losses are not addressed early on, chronic problems in attitude and behavior can result.

Ultimately, integrating two cultures in a major merger or acquisition requires a systematic focus by the CEO and senior team on a process that includes a robust culture integration process. But that process takes months, even years to complete, and leaders and employees have to deal with the merger in the here and now.

So, what be done to navigate a new work situation in the healthiest way possible? Here are a number of suggestions:

1. Learn about the company you are merging with

Learn everything you can about your new “bride.” Getting an understanding of their values, guiding behaviors, and cultural signposts will help you understand where you share common ground rather than focusing on how you are different.

Understanding how things are seen in the other cultures, learning mutual respect, and being open to exploring different points of view are the keys to the human factor in any merger or acquisition.

2. Know where you are on the “Mood Elevator”

Everyone in organizations, from the top to the front line, casts a “leadership shadow.” People who think and behave in ways that demonstrate that they have a growth mindset, energy and vitality, and are ready to embrace change in a positive way, will be seen and felt more positively by others.

This thinking leads to feeling more energized and positive, which affects your ability to do your job well, make good decisions, and even impacts your health. On days when you feel worried, irritated, bothered or angry, life looks a lot different, problems seem harder, solutions don’t come as easily, and you may react to situations and people in a less than positive way.

So, take a moment each day when you arrive at work and throughout your day to be aware of your state of mind. We have found that people who see that they are in lower mood states and who consciously bring their mood up to being curious or even grateful will experience higher emotional intelligence, have better relationships and a higher overall quality of life.

3. Build and sustain rapport

When companies are acquired or combined, people almost immediately start to focus on the differences in the companies. They also quickly begin to “keep score” on who are the winners and losers.

It is understandable to have some concerns. Some people may lose their jobs while others get promoted. The sequence of thinking most people go through is this:

  • First — Will I have a position?
  • Second — Will I have more or less power, stature and influence?

Organizations seem to informally keep score relative to winners and losers, not just for roles, but for the two merging companies.

If you catch yourself thinking or talking in the we-they mode, reframe your thinking to more of being part of a bigger team on which we all win together. A good way to get into this state is first of all to remember that we are all just people, and that we mostly have good intentions for doing the right thing. We all come to work each day hoping to make a difference and contribute.

4. Demonstrate the value you bring to the new company

It’s common once a merger occurs for a restructuring to follow. It’s easy and safe to “stay under the radar” when things are shifting, but doing nothing can be a losing strategy, and, it will bring you little personal satisfaction and likely cause more personal stress.

Instead of worrying about how you will fit in, keep an open mind and focus your energy on demonstrating your capabilities and raising your hand to offer a valued insight when opportunity arises. You may find a chance for promotion or a new way to learn and grow or provide greater value and have a positive impact.

5. Be here now

Finally, it’s easy to get ahead of yourself or distracted from your core purpose in a time of dramatic change.

Try to start each day with a renewed sense of personal purpose, a thought or two of things that make you grateful, and a feeling of being committed to what matters most. Be truly in the moment when working with familiar and new colleagues.

You’d be surprised at the rewards that will come your way through increase trust, people responding to you more positively and in turn being lifted by your spirit and presence.

Mergers are a fact of life in business and are part of a healthy, changing business dynamic. You have the power to make a difference.

This post originally appeared on

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