Dive Brief:

• Between 70% to 90% of corporate mergers and acquisitions fail based on a study conducted by Harvard Business Review. Emad Rizkalla, founder and CEO of Bluedrop Performance Learning, told the Huffington Post that “getting the culture right [is] a big factor in the ones that succeed.”

• Rizkalla notes that company mergers failed at such a high rate. Companies must focus on building a strong corporate culture rather than strategy, and opt to learn instead of influence the outcome.

• Rizkalla shares his experience when his company, Bluedrop, merged with a direct competitor, Atlantis Systems Corp., with the results being favorable because each company had a similar corporate culture and many of the employees already knew each other. This synergy was what made the connection complete once the dust settled on the merger. 

Dive Insight:

The Rizkalla article is a good example of modern day leadership taking a different stance on corporate mergers and acquisitions. Instead of narrowing the focus on an immediate strategy which only serves stakeholders, a renewed focus on building a new and better corporate culture on the foundations of already strong connections occurs.

Rizkalla mentions that is was a challenge to think in these terms, saying that, "as the barrage of day to day financial, legal, HR and regulatory “stuff” began flooding our teams—cultures (and, for that matter even our breakfasts) took a back seat and were soon forgotten.” But months later, in retrospect, he realized that the strong culture had already trumped any well-planned strategy.

Corporate culture can and should start at the top of the organization. An organization that can learn from others, and from the added companies has a key advantage. When leaders have full buy in, it makes it easier for employees to do so too, even when they come from very different strategies and goals. Momentum starts from within and leads to long term success, even in the midst of chaos.