As one CEO said, The need for speed in transactions prevails. If the first stages of the deal do not go well, the rest of the deal will likely follow the same path. The general rule in M&A to ensure that deals do start off well is to focus on decisions and actions that impact the short-term goals first and longer-term goals I don’t buy the cultural excuses. second. Any other activities that don’t support these goals The fact is, we did not have the right explicitly get deferred. The rule results in the principle of ruthless prioritization of initiatives and supporting actions. leaders who could lead through a transaction, or the right managers The dominance (inflexibility) of the big firm’s existing who could manage through it.” culture. The essential starting point in transactions involves two existing cultures: the buyer’s and the target’s. Big firms CEO, Fortune 500 firm have multiple business units, often hundreds of thousands of employees and well-established cultures. Even then, in today’s environment, many of these firms are in the process of changing or adapting their companywide cultures as they try to grow, innovate, transform or just survive. This quote places the responsibility for solving cultural problems firmly on the shoulders of leaders first; the group For acquisitions, the reality is that larger firms cannot change universally agreed that leaders are the people that most their structure to accommodate any one deal (and these firms influence deal success and together with managers are most may do multiple deals each year). In the vast majority of deals, likely to keep the key talent and the rest of the employee the buyer must integrate the target into its culture, even if the population motivated and productive. buyer sees elements of the target’s culture that it likes, which often happens. Everyone takes time to learn culture. This is true for the CEO down to the rank and file. The fact is that people learn HQ’s need for consistency versus preserving and growing culture over time, as they join and work in any organization. the business. From the headquarters level, the buyer wants People cannot learn culture overnight, but in a transaction, to implement many of its required policies and procedures the acquired company’s employees need to learn a lot about (often referred to as “’non-negotiables”). But from the deal the acquirer, very quickly. In the overwhelming number strategy perspective, the business doing the deal wants to of transactions, the target’s people need to adapt to the not just preserve what made the target successful but also acquirer’s way of doing things and not vice versa. grow the integrated business. There is always continued tension between this need to “integrate” and the need to preserve and grow value. How advanced acquirers approach culture in M&A 7