Question: Is it important to have cultural integration with an acquisition?

We are a 200+ people organization, with a strong culture, which recently acquired a smaller business in another state.

This business is in the same industry, but employs a smaller, younger workforce with a distinct company culture. There will be no overlap in the clients served by the two businesses.

How important is it for us to culturally integrate the new entity? If it is, what is the best way to do it?

3 Expert Insights

It's crucial.  In my experience your acquisition will at worst fail entirely and at best will lose at least some of its value if you don't work to get the best from the organization you've acquired.  Their culture needs to be acknowledged (it's probably at the root of why you bought them in the first place) and this will require a real exploration on both sides of what you want to boost, integrate and dispose of.

It's not easy and it will take time and effort and most probably an external resource that really understands cultures and how they work.  This is our core competence and I'd welcome a conversation if you were open to it.

It is very important to culturally integrate with the new entity. It just has to be done right. Be careful because seemingly logical answers can backfire in this situation. Bigger companies (you) have naturally different cultures than smaller ones (your acquired company). Forcing one to act like the other is not always a good thing and it can have very unintended consequences.

Different generations (Traditionalists, Baby Boomers, Gen X & Gen Y) also have very different work cultures. One is not better than the other, they are just "different" from each other. Forcing your newly acquired company, with its younger employee base, to act like an older generation group of people is not the right answer and can disorient employees to the point of creating a mass exodus of your newly acquired group of talent.

I recently taught a class in a generation-diverse business titled: "Leveraging the Generation Gap". You need to make sure that certain core values are the same for both company locations but be very cautious to force other so-called "cultural alignments" that might be perfectly healthy for that size and age of the acquired company. Imagine if the tables were turned on you and a smaller and younger group of people acquired your business and forced you to adopt everything about how they live their "culture". Ask yourself how successful would that merger be?

I suggest you select a group of employees from each group and have a facilitated off-site session led by a neutral outsider (me) to sort out what has to change and what does not have to change. Do not destroy the good reasons why you bought this other company by destroying a culture that works for their company size and age group. You might find that you want to change something in the new and bigger company that has its roots in the company you acquired. Just because you bought them does not mean that you cannot learn something valuable about how they run their business.

Relating to humans, their personalities and wishes, cultural issues are delicate. Trust is the key to bring them to practice your culture, the challenge is how to do it without loosing key personnel. The best way is to help them converge to your culture and possibly, as a sign of good will,  you may adopt something positive in their culture.

Trust is built through people, personal meetings, share of knowledge and listening even when we disagree. Work has to be done to peel off counter-change shields, identify leaders and bring them to your side and, positively neutralize resistance. With persistence and trust it can be achieved in relatively short term.

I will be glad to provide more information.