You may recognize I Love You, You’re Perfect, Now Change as the title of a popular musical, but it’s also a common refrain when companies acquire or merge. The shift from “I can’t live without them” to “I’m not sure I can live with them” happens with both couples and merging companies.
So what can you do to prevent culture clash when buying a company? Here's our Seven-Step Program:
- Cultural Due Diligence: Conduct cultural due diligence on the target company. Look beyond the numbers. Failure to do serious cultural due diligence can prove just as expensive and painful as poor financial, legal, or operational due diligence.
- Founder Impact: Assess the impact the founder or original entrepreneurial leadership team had on the business. What kind of dream did they have? What kind of operation did they run? And if the original founders will be exiting, what kind of influence and people will they leave behind?
- Value Drivers: Get crystal clear on the value drivers for the deal. Don’t get caught up in integration for the sake of integration. Plan to integrate only where it is necessary to create value together ...