While mergers and acquisitions are increasingly popular worldwide as a business strategy, they have a poor track record: Less than half of all mergers are considered “successful.” Acquisitions which look strategically impeccable on paper can turn out to be value destroyers in reality. Few companies achieve the synergies, create the profits or realize the cost savings they anticipated.
Smart companies recognize the need for a compelling reason to join two companies and that without employee support the anticipated benefits will be unachievable. When companies openly communicate with, and help prepare, employees for change in the workplace, the probability of success increases.
The above are all doubly true when a merger or acquisition is a cross-border one. Differences in culture can make it particularly challenging to achieve the desired synergies or efficiencies. Each company has its own distinct corporate culture – how decisions are made, how communication happens, the degree of formality, the amount of risk-taking, etc. Even within the same country, and the same industry, corporate-culture differences can be very sharp. Such disconnects can doom an acquisition if they are not addressed. When you add national culture differences to the mix such as communication style, attitudes toward time, and degree of hierarchy, the gaps can become insurmountable if nothing is done to help bridge them.
Japan Intercultural Consulting is often called upon to work with firms being acquired by Japanese companies, to help them prepare for interacting with their new parent. We will typically do an executive briefing specifically for the leadership team, focusing on issues such as decision-making and coordination. This is then followed up by our Working Effectively with Japanese seminar for middle managers and rank-and-file employees who will be interfacing with Japanese counterparts.
Recently we have had the opportunity to also work with several overseas firms doing acquisitions in Japan. In such cases, the Japanese employees of the acquired firm typically have little experience working with people from overseas, and will benefit from Working Effectively with non-Japanese training. Also Working Effectively with Japanese will frequently be useful for parent-company employees who will now be working closely with or supervising people in Japan.
In post-merger situations we also recommend holding a teambuilding session that brings together the leaders of the parent company and of the acquired firm to discuss how they will work together and what kind of culture they want to create together for the combined entity.