Report: Avoid Acquisition Acrimony: How to Analyze Culture Synergy Early
The Acquisition Failed Primarily Because of a _________ Mismatch
It’s likely that you filled in the word “culture” as you read the above.
While M&A activity is at a near all-time high, most are doomed by cultural disharmony. While transaction volumes surged to $4.1 trillion last year (one of the highest in history) it’s no secret that mergers and acquisitions have an astonishingly high failure rate: anywhere between 50%-to-85% according to multiple research studies. History has proven this time and again.
Through the years, companies have focused on the financial and operational ramifications of mergers and acquisitions, with cultural implications being a distant afterthought in the process. Culture is the number one reason most acquisitions succeed or fail. And yet, when one company buys another, the matter of culture is often (and surprisingly) disregarded until after terms are agreed to and the acquisition is announced.
The Institute for Corporate Productivity’s (i4cp) study on M&A, which surveyed more than 1,200 business professionals, found that high-performance organizations (HPOs) are 11x more likely to place a very high priority on cultural synergies than lowperformance organizations (LPOs). Sadly, that same research found that LPOs are 4x more likely to place low or no priority at all on this critical element of organizational synergy.
The importance organizations place on cultural synergies in M&A pursuits is something i4cp predicts will gain significantly in the coming years. While only 43% of the total survey respondents indicated their organizations place either a high or very priority on cultural synergies in M&A considerations, 86% indicate they know they should be doing so.
Kevin is CEO and co-founder of the Institute for Corporate Productivity (i4cp), the world’s leading human capital research firm focusing on people practices that drive high performance. i4cp conducts more research in the field of HR than any other organization on the planet, highlighting next practices that organizations and HR executives should consider adopting.
Kevin is also the author of Culture Renovation®, an Amazon bestseller which debuted as the #1 new release in a dozen Amazon book categories. Drawing on data from one of the largest studies ever conducted on corporate culture, Culture Renovation™ details how high-performance organizations such as Microsoft, T-Mobile, 3M, AbbVie, Mastercard and many more have successfully changed organizational culture.
Kevin is currently on the board of Performitiv, and on the advisory boards of Guild Education and Sanctuary. Kevin was previously on the board of directors of KnowledgeAdvisors, a provider of human capital analytics software, which was purchased by Corporate Executive Board in March of 2014. Kevin was also the Chairman of Jambok, a social learning start-up company which was founded at Sun Microsystems and was purchased by SuccessFactors in March 2011. Additionally, Kevin served on the boards of Workforce Insight and Koru prior to their sales.
Kevin is on the board of Best Buddies Washington and helped establish the first office for Best Buddies in the state in 2019. Best Buddies is a nonprofit organization dedicated to establishing a global volunteer movement that creates opportunities for one-to-one friendships, integrated employment, leadership development, and inclusive living for people with intellectual and developmental disabilities (IDD).
Kevin was previously the Founder and the President of SumTotal Systems (NASDAQ: SUMT) which he helped create in 2003 by merging Click2learn (NASDAQ: CLKS) with Docent (NASDAQ: DCNT). The merger won Frost & Sullivan's Competitive Strategy Award in 2004.
Prior to the formation of SumTotal, Kevin was the Chairman & CEO of Click2learn, which was founded by Paul Allen, co-founder of Microsoft. Kevin helped take Click2learn public and engineered over a dozen acquisitions post-IPO. Prior to joining Click2learn, Kevin was president and founder of Oakes Interactive in Needham, MA. Oakes Interactive was purchased by Click2learn (then called Asymetrix) in 1997, prior to going public a year later.