Chapter 1 Key imperatives of addressing culture in M&A transactions The group highlighted nine imperatives to addressing culture in M&A, in three broad categories: ƒ Culture Successful transactions require ƒ Leadership people to change, and to do that we ƒ Developing people need to be specific on the changes, not just the what, but the why and About culture how. We need to tell them what 1. Culture and cultural integration are important in all the priorities are, and what actions transactions where people are involved, but even more they need to take, that they had not so in talent-based deals, where people are the most done before. And you can’t throw significant asset of the target. too many changes at one time and 2. Don’t leave culture to be an integration activity. Start expect anyone to work through early. Most cultural problems are entirely predictable and them effectively. That’s just not how can be traced back to decisions made — or not made — early in the deal life cycle. The consequence of leaving humans are wired to work. Nor can culture work to the post-close phase is that, by then, it’s you talk about the importance of too late to effectively resolve many of these predictable changes if those changes have a problems or issues, and the opportunity to prevent them weak line of sight to specific goals happening in the first place will have been lost. and risks.” 3. Prepare the approach before any deal surfaces. Develop the cultural approach and framework so the organization is Integration Leader, Corporate Development ready to apply it in the transaction. It’s far more difficult to create a new approach during the heat of any deal. 4. While a framework is vital, the components are what matter. Be clear what the term “culture” means in this context to better facilitate conversations about the significant components within that term and how these components directly impact deal success. 5. It is not just about behaviors. Do not get caught up thinking that culture is just about behaviors. To impact the deal, it boils down to people — specifically, what they should do differently than what they have done before. They must know what the priorities are and the actions to take more so than “behavioral changes.” Priorities and actions get to urgency and importance, while “behaviors” can fall into the category of “generalizations,” often to be addressed much later in the post-close phase. 4 willistowerswatson.com