Stronger Together: How to Prevent a Culture Clash During an Acquisition?

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The Challenge: Stability versus Innovation

We've previously discussed the importance of both companies having the same goal. That might seem obvious, but what's often overlooked is that seemingly ironclad agreements can turn out to be surprisingly fragile if they are interpreted differently due to cultural nuances. Cultural differences can therefore be a significant stumbling block in collaboration. Large market players typically have a strong hierarchy and structure. Their processes and decision-making are optimized for stability and reliability, and they prefer everything to proceed according to plan, as this provides calm and clarity. However, this can also hinder innovation. The smaller partner is often young, with short decision-making lines, is more innovative, and full of ideas but lacks the resources and capacity for desired growth. A merger can perfectly bring these two worlds together: order where needed and room for innovation where possible. Yet, in practice, it's often more complex. Large companies tend to, in their pursuit of structure, limit the creativity of the smaller company, leading to frustration, as we saw in the example in our previous blog.

How it does work: Collaboration and Respect

Acquisitions like that of De Vegetarische Slager by Unilever in 2018 and Djoser by HolidayBreak in 2005 prove that it can be done differently, with the acquired parties retaining a high degree of freedom and their CEOs maintaining prominent roles within the company. This is repeatedly highlighted in the BNR series 'De Overname' (The Acquisition), where CEOs are interviewed on the topic. In successful cases, the newcomer within the organization is given its own status, meaning it doesn't have to (fully) conform to the acquiring party's hierarchy and retains sufficient leeway for its own way of working with a distinct identity. Where the acquiring party imposes its structure and disregards the unique identity of the smaller partner, employees who no longer feel at home in the organization become frustrated and/or leave, turning the acquisition into a failure. In short:

Three tips for a successful acquisition

1. Consider motivations and culture: Take cultural differences seriously and don't blindly assume they will simply align after the acquisition.2. Respect differences: ensure both parties retain their unique identity. Unity in diversity makes the combination powerful.3. Shared vision & strategy: Clearly define how this unique identity will be enshrined in very clear, firm agreements and elaborate on these in the joint strategy.Read the complete story in our whitepaper “Successful Change Through Drivers”