from Lessons From 1,000 Deals

Organizations being acquired and merged face an insidious threat: A loss of alignment between corporate strategy and the existing culture.

If these two fall out of sync, you’ve got a real dilemma on your hands. But the disconnect often gets disregarded by top management and the board of directors, even as it quietly undermines operating effectiveness.

So what causes strategy and culture to fall out of alignment?

Think of it this way: Strategy is forward-oriented. It’s today’s game plan for tomorrow. Culture, on the other hand, is essentially the product of your yesterdays. One is shaped by the future, the other is forged by the past. That’s a dramatic difference and it has huge implications.

When companies are being acquired and merged, there usually is some strategy rerouting that rapidly occurs. That’s not too difficult. But culture doesn’t behave that way. Culture fights being changed—that’s its nature, actually, its duty—and it’s damn good at the job.

See the problem?

The big challenge for top management is to shape culture such that it aligns with, and supports, significant changes in your plans for tomorrow. Trust me, this doesn’t just happen automatically.

Any significant shift in strategy can produce a dangerous misalignment. The likely result? An invisible, internal fight breaks out between strategy (shaped by your view of tomorrow) and culture (a legacy of the firm’s yesterdays).

Look out! Because culture usually wins the war. Or to put it another way, far too often the past fouls up your future and another merger goes down in flames.