June 2, 2010

Maybe NOW they’ll learn!

Well, Kulturtolk got its two cents in today. Bjørn Christian Nørbech, Managing Partner, was quoted in Aftenposten. This was a follow-up to an article from May 14th discussing how many Norwegian M&A’s have been unsuccessful despite sky-high price tags. Today’s article looks at the why’s. The conclusion? Not enough focus on cultural differences! A study has found that 85% of M&A failures were due in part to culture. The importance and effects of cultural differences on business were underestimated.

It’s about time that companies took a closer look at their organizational culture before forking out money on an acquisition. What happens, ultimately, is that two or more cultures are forced into collision mode before they can unravel, shake themselves off and start creating a new, joint culture. But if companies were prepared for the culture clash, it would be less painful, take less time and lessen negative effects to the bottom line.

Bjørn Christian points out that most of today’s leaders came into the job market at a time when culture was not a focus in business school. It’s not their fault. After all, you don’t know what you don’t know. But these days, we should know better. Companies should be doing a cultural due diligence in addition to the economic and legal due diligence that is a given in an M&A situation.

To read the articles in Bjørn Christian’s native Norwegian, click here.