Chapter 3 Eight key steps in building the business case Successfully navigating the challenges that come up in a corporate environment 1. Start with the root causes and opportunities and use 3. Prepare a deal life cycle framework showing typical facts to support the case. The most powerful fact is that goals. The starting point being the deal life cycle table managing culture leads to more successful outcomes, and to ground leaders on the complete transaction process, not managing culture poses a higher risk of deal failure. beginning to end, “what happens, when and why it’s The facts that support this statement are drawn from both important and the specific goals culture can support publicly available research on how cultural problems lead to within each phase of the process. Also, the deal limitations deal failure (refer to the commentary on studies on culture commentary reinforces the fact that decisions are often in M&A) coupled with each firm’s own specific experiences made with incomplete information. and reviews of the success or otherwise of their own deals. 4. Describe the output of cultural work in terms of 2. Have a cultural framework built for M&A purposes. This potential deal impact, by stakeholder group. The shows the components of culture that are relevant to the business case needs to go further than the “reasoning” M&A situation and is the subject of our first paper. The and into showing how the results of the work can be framework presents one of the first challenges. used. There are many users of this work but structure any presentation on the value of culture work based on the parts of most interest to each group. The key here is that the information gathered on culture, needs to be broken up and prioritized based on the needs and interests of the different stakeholders at each phase of the deal, with each cultural component mapping or supporting a very specific Make sure that leaders understand transaction goal or risk (the next section shows how the that the framework is for M&A output is used). purposes only; otherwise you will lose 5. Identify the role of the key people that are responsible the argument. If you don’t link this for driving changes. In parallel and equally important is directly with M&A, many will think you the process to identify the people or groups of people, charged with driving the changes throughout the are trying to change the entire culture organization to achieve these goals. Changes depends of your company, which others view on these specific people and the role they will play in the as their remit. We had several battles integration and the changes they will need to make to their internally in this respect, until we own business priorities and actions. understood what the M&A team were trying to accomplish in incorporating culture in their M&A process, and equally what they were not trying to do, they were not trying to change how we defined culture as a firm.” Chief Human Resource Officer, responding to the cultural framework not being the same as their existing definition of culture and the related components Building the business case for culture in M&A 5