Only a small proportion of companies assess cultural issues as part of their integration plans for mergers and acquisitions (M&As), according to feedback at Mercer’s M&A Ready™ workshops attended by senior Human Resource (HR) leaders globally.

 Just 25 percent of respondents said their company had any type of process in place for dealing with cultural issues to ensure better business integration results. 

 Despite this, most companies appear to have strong awareness of culture and talent issues in M&A situations. When asked about the risk of top talent leaving their organization following an M&A transaction, virtually all attendees said they were concerned about it, and nearly half (46 percent) said they were “very concerned”

 “People issues” in M&A situations also appear to be growing in importance in the minds of attendees: nearly two-thirds (64 percent) said that people issues are more prominent today than they were one or more years ago.

 “It’s a concern that well considered cultural integration plans and processes are seemingly absent in many organizations planning M&A deals,” said Chuck Moritt, Senior Partner in Mercer’s M&A consulting business. “While many acquisitive organizations are aware of culture-related risks that surface in transactions, few organizations are doing enough to mitigate those risks ahead of time.”

 Mercer advises companies to focus on four critical steps for early integration success:

Discover and define direction - Engage senior leaders early in the deal to define and agree on the culture necessary to deliver deal success

 

Dig deeper- Understand each other's "way of working" - similarities, differences, risks and potential success derailers

 

Determine drivers and deploy- Identify a series of drivers to reinforce the behaviors necessary for success

 

Determine traction- Track and reward progress; monitor success of culture alignment over time.