The importance of culture during complex mergers

| September 10, 2018

It would not an uncontroversial to say that mergers are one of the most complex, disruptive and unpredictable activities that a company can ever go through. Yet, most organisations will go through the process at least once. It is in these situations that the benefit of business agility is clearly evident.

I got a chance to speak with Robin Mack, CEO at Innovation Transformation, to get his thoughts on the importance of culture during a complex merger. He shares his insights on learning quickly, failing fast and focusing on the now.

M&A’s are difficult at the best of times. Your talk at the Business Agility Conference is looking at the culture and the importance of culture. How do you build a strong culture during a merger?

The most important thing is to talk about it. In the case with Herron Todd White, we frequently asked ‘how is this going to affect our culture?’ In a merger process, most of the time is spent in planning, setting things up, and looking ahead to what it would be like. So, if you don’t make culture part of your decision-making by questioning ‘is this the right thing to do?’ you might end up with a great deal, but not a viable business outcome in the long-term.

So, what does Business Agility during an M&A look like?

It actually looks pretty messy because we’re constantly learning as we go. And, as we learnt something new, we adapted and started to apply those changes to the next piece of the merger. In our case, we spent quite a bit of time looking at the bigger picture and forcing ourselves to come back to ‘what’s the short-term look like?’.

We didn’t want to dwell on the overall design too much as it was constantly changing. We got glimpses of it, but always came back and looked at what we’re doing right now. So, as were delivering each piece, we were always changing, adapting and (sometimes) failing.

What did you learn from those failures?

A lot of our learning during the merger was around engagement and the softer side of things. After all, a deal is a deal and a number is a number, but there’s always emotion involved. In this case, the owners were part of the organisations and had worked there throughout their whole lives.

And so, we were learning more about the emotional side of the merger and the effect it was having on the decision making for the business owners, the board, and for the leadership team that was trying to put this together.

Mergers and acquisitions are hard at the best of times and taking a more human approach is great. Was the outcome positive? Did the people who went through this, compared to other M&As, get a better outcome?

I will say that we got to the right outcome fast. You’ll need to listen to my presentation at the Business Agility Conference to find out how. I don’t want to give away the surprise at the end.

Fair enough. Knowing what you know now, what would you do differently?

I would have engaged much earlier. Getting trust takes a lot of time. Especially when you’re dealing with multiple owners, many of whom have never heard of agile, and you’ve got to take them on a journey. I stepped in after the merger was struggling and not delivering. If we could have started from the beginning with this kind of approach, we may have gotten to an answer sooner.

When someone listens to your talk, ‘Agility in a complex corporate structure, a M&A Story’, at the Business Agility Conference, what new ideas will they walk away with?

They will walk away with practical ideas on how they can apply some of the agile principles to complex situations and where they can get benefit from the thinking behind it. At some point, everybody goes through a reorganisation, a cultural change, a merger, or an acquisition that changes the organisation. The things that we applied here can be applied to any of those situations.

Robin Mack is the Founder & CEO of Innovation Transformation, which helps enterprise organisations think and act more like start-ups. Robin’s background and practical experience with implementing agile, lean and design thinking principles has supported transformation at several of Australia’s largest financial, retail, media, and telco companies over the last decade.

He is speaking at the Business Agility Conference in Sydney on September 24-25 on ‘Agility in a complex corporate structure, a M&A Story’. Get your ticket to hear Robin speak here.