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To leverage cultural diversity is probably one of the most overlooked disciplines in modern management and leadership. 2/3 of all mergers and acquisitions fail due to cultural clashes and the primary reasons for people to leave their jobs are all associated with the culture of the organisation. So how can you benefit from leverage the cultural diversity and how do you get on the track of improving. These are the topics for this article.
Despite what some people think cultural diversity doesn’t only exist between national cultures. Each of us are members of many different cultural groups at the same time. We are member of a family culture, a corporate culture, a professional culture, an age-group culture, a gender culture, a sexual orientation culture just to mention a few. Each of these cultures have a collective identity, which we accept and obey. And when ever any two or more cultures have to be together we have cultural diversity and an opportunity to leverage the cultural diversity in that particular situation. We do of course also have the opportunity to start acultural conflict. But that is entirely our choice.
Previously cross-cultural management has been focused around outlining the differences between different national stereotypes with no or only little attention to how we can leverage cultural diversity in an effective way. Gugin has a very different approach to deal with cultural diversity. We aim at leveraging the cultural diversity in such a way that our clients become more innovative, more competitive and more attactive for both potential employees and new customers.
Today we live in a globalised world, where cultures blend more than ever before in history. It therefore doesn’t make sense using national stereotypes when trying to find out how to operate in a globalised world or how to make regional entity perform in the best possible way. Such an approach will only reinstate false security and produce more conflicts.
Instead we will focus on a generic approach to leverage cultural diversity in any situation. Gugin’s approach enables the leaders and managers to identify cultural dilemmas and develop solutions that reconciles opposing views in each dilemma. A reconciliation creates two winners, while a compromise always creates two losers. That is why a reconciliation of two opposing views is so powerful and inevitably leads to new synergies and lower cultural friction in the organisation. In our opinion this is the intelligent way of leveraging cultural diversity in your organisation.
Global leadership Development
When a company goes international or merge with another company the leadership skills need to be upgraded in order to be able to tackle the new level of cultural diversity. Gugin has 10 years of experience in leadership development with the focus on giving the leaders the necessary tools for them to successfully manage, develop and lead multicultural teams.
2/3 of all mergers and acquisitions fail to meet their original objectives due to cultural clashes. The consulting firms assisting the merging companies simply don’t take the cultural diversity into consideration. This is a too high percentage and one of Gugin’s core objectives is to help our clients smoothly through that transition process. Preparing the leadership team is a crucial part of this.
Gugin’s offerings include:
- Dedicated corporate training programs
- Workshops to address a specific management issue
- A set of cross-cultural management courses that can be integrated into the company’s existing curriculum
- e-Learning modules
- Open courses and workshops held at key locations around the world
Facilitating post merger integration
Why is it that 2/3 of all mergers and acquisitions fail to meet their original objectives due to cultural clashes? Our research shows that it is because the cultural friction is ignored or underestimated and because the management doesn’t have the necessary skills and/or time to do a proper integration. If your company shouldn’t end up between the 2/3 of the companies that fail we suggest you contact us as early as possible so we proactively can plan the post-merger integration process instead of agreeing on a damage control assignment.
The integration process usually goes wrong because:
- Management loose focus as soon as the deal is signed
- Management doesn’t know how to tackle the integration process properly
- Management has to deal with both the current business and the integration process
- The cultural friction and resistance is often hidden
When you engage Gugin to facilitate the integration process we can assure you that:
- You can spend more time and resources on what you are good at – managing the company
- We locate the potential cultural friction points early in the process so we can develop a plan to deal with them
- We plan the integration process together with you and align it with the strategic and operational objectives and targets
- We keep our eyes and hands on the integration process ensuring that you reach the desired level of integration on time
- We help you protect your most valuable resource – your people, their skills and their knowledge. It is always the best people who leave first when things are not as they should be.
- We facilitate the development of a corporate culture that is supporting the current strategy and at the same time can include the diversity in the merged organisations.
Cultural due diligence
Between 55 and 77 percent of all mergers fail to deliver on the financial promise announced when the merger was initiated, and they fail for the same two basic reasons:
- Failure to assess the potential impact of attemting to merge and integrate the cultures of the companies involved.
- Failure to plan for systemic, systematic and efficient integration of those cultures.
Culture clashes result in internal confusion and in-fighting often characterised by unfamiliar ways of doing and talking about things. These in turn result in huge inefficiencies, loss of momentum and increased internal focus at the same time that the new company needs absolute ringing clarity on purpose, plan and action with strong external focus.
The cultural due diligence process is proactive problem solving in advance
A cultural due diligence from Gugin will give to a clear indication of the cultural challenges you are going to face. One of the deliverables will be a proposed process for dealing with these challenges in the post-merger integration process. We address both the organisational and national cultures in our due diligence using a systematic and comprehensive framework .
Integrating organisations is probably not your core competence – it is ours. By working with Gugin you can keep your eyes on your business, your customers and your competitors.
What do you get from a cultural due diligence?
Detailed cultural profiles of the organisations involved.
- Specification of cultural similarities and differences in our cultural dimensions.
- Prediction, spefification and prioritisation of cultural friction points and their impact on the merger process.
- Estimation of the degree of difficulty in integration the organisations.
- Specific recommendations on ways to avoid and/or minimise cultural friction during the integration.
- Recommendations on organisational adjustments in order to minimise cultural friction.
- Integration road map for implementation of recommendations.
The cultural due diligence process
Not two mergers are alike, so we customise each process in order to maximise effectiveness. Our qualitative methodology involves interviews, focus groups, workplace observations and documentation reviews. The quantitative methods utilise web-based surveys and benchmarks.
We go though the following steps during the cultural due diligence process:
- Cultural self-assessment.
- Organisational effectiveness assessment.
- Assessment of potential target companies.
- Detailed cultural assessment of target company.
- Assessment of strategic objectives in relation to the cultural friction.
- Identify cultural integration success measures
- Alignment- and integration planning.
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