Business Culture Blending

Segueway to Success

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By: Brent Hamachek and Tom Kuchan

Our “Segueway to Success” show, talking about our blog, airs each Wednesday at 15:00 CST.  Find today’s show and the archives on our web site:  www.seguewaysolutions.com/Articles-and-Events.html

Mergers and acquisitions are about more than just dollars and cents.

They are also about sense, and that isn’t always factored in.

If the United States were to “acquire” New Zealand tomorrow, does anyone believe that the Kiwi’s would get new “USA Proud” coffee mugs printed and all would be well?  Of course not.  The cultural differences are such that a successful “acquisition” would be a longshot.  It would only be successful if extensive forethought and planning went into it before hand and if the people in charge were paying attention real-time once the “acquisition” took place and making the necessary adjustments on the fly.

The point is that the merging of two companies can be just as potentially chaotic as would be the acquisition of New Zealand by the US.  Unfortunately, businesses often do not spend enough time considering the cultural dynamics of an acquisition before entering into it.  They look at the numbers and do the math.  There is something very misleading about business math vs., say, the math used in physics.

Physics math is used to represent objective scientific laws.  It quantifies the quantifiable.  Business math, however, quantifies the behavioral.  Every business financial, represented as mathematical, outcome is the result not of the laws of nature but of the result of behavior of humans in the workplace and marketplace.  When one company evaluates the merger with, or acquisition of, another company and they look only at the mathematics, they fail to properly account for the cultural differences that might exist between the two companies and, as a result, the wedding fails because there is never full and proper assimilation.

There are different ways to do this.  Cultures can blend; one can be dominant; both can remain separately intact and co-exist, etc.  Whatever method is adopted what cannot happen is that it cannot be allowed to simply eventuate on its own.  It must be planned, overseen and monitored.  Failure to do so will lead to either implosion or explosion, both of which can be understood, quantified and mastered in the world of physics, but neither of which lead to success in the world of business.

No real life example of this sort of foreseeable bad outcome is more current or clear than that of the failed merger between Daimler-Benz and Chrysler Corporation.  Contrived by CEO’s on the back of a cocktail napkin, the merger between the two which was announced on May 7, 1998 never was able to take hold within either culture.  The differences between Germans and Americans was a key impediment to be sure, but it was more (or less) than that.  The merger likely would have failed regardless of geography because there was an underlying theme within it of “don’t worry, we’ll figure that difference out later”.    In 2007 the entities formally acknowledged their failure and separated wasting money, time and lives in the process.  The money they can both earn back.  As for the rest of it…

Segueway principal Tom Kuchan was right in the middle of the failed Daimler-Chrysler merger.  His experience across five continents as the “American” working for the “Germans” to help understand the “Americans” gave him a special vantage point from which to work in and on the acquisition and failed cultural assimilation.  He learned what works and what doesn’t work and has figured out since then how to apply those global conglomerate lessons into the privately owned business market.

Join us Wednesday when Segueway to Success will have its very own principal, Tom Kuchan as its host and guest to discuss “Culture Blending” in the world of mergers and acquisitions.  You are not going to believe the stories he has to share!

Segueway Solutions – http://www.seguewaysolutions.com/

+1 (847) 778-9474

Brent E. Hamachek spent the first 15 years of his professional life in banking, working in 6 different sectors including audit, credit and 9 years as a commercial banker.

After commercial banking, Brent formed Segueway Solutions in 2000 in order to assist privately held companies in transition. To date, he has worked in 40 different industries and has served in the capacity of CEO, CFO & EVP Sales for clients. Brent is a sought after consultant, speaker and trainer offering national and foreign expertise to clients.

brent@SeguewaySolutions.com

Tom Kuchan is a proven leader in global business expansion and effectiveness, risk management, finance and operations with experience in both Fortune 50 and entrepreneurial environments. He has a proven record of defining strategic objectives, translating them into operational tasks, and leading their implementation in diverse geographies and cultures across the globe.

Tom has lived overseas for over twenty years, including Switzerland, Germany and the United Arab Emirates, and has worked extensively across Europe, Latin America, Africa, the Middle East, and Asia.

tom@SeguewaySolutions.com