CEO Perspective for 2023 & Beyond: How to Combine Cultures to Create the 1+1=10 Effect
By Rob Zack, CEO, MicroAge
If you asked 100 CEOs how to build a high-performance organization with happy, engaged, and productive employees, loyal partners, and a steady, increasing flow of your ideal new customers… you’d get 100 different answers. That said, many of those would overlap, and pretty quickly, you could triangulate your way to a ‘top 10 or 20’ list that would give you some relatively compelling insight into how you’d go about the task with a high probability of success.
Now, ask 100 CEOs who have been directly involved in either acquiring an organization, or being acquired, and suddenly your 100 different answers turn into 1,000 or more. The question will surely also generate some visceral moaning and groaning about just how difficult successfully integrating two companies can actually be.
If you’ve never lived through it, you may immediately think I’m referring to challenges with integrating systems, processes, and procedures, or around figuring out how to seamlessly handle products, services, sales, support, partners, and customers. Yes, those are all monumental challenges in and of themselves, so I don’t want to discount the importance of getting those right. But the reality is, the biggest challenge is successfully integrating people, teams, and organizational cultures to create what I’m going to call the 1+1=10 effect. If you don’t get that right, it puts your future combined success at risk.
What is the 1+1=10 Effect?
You may have heard this more commonly referred to as the “1+1=3 effect,” but in the case of acquisitions, if done right, I would argue it’s more likely to have a 10x (or more) effect on your growth, hence my 1+1=10 equation (and yes, I’ll take some CEO creative license here).
Essentially, each person in the equation has their own unique value, and when you bring them together, the relationship and bond they create in working together forms even far greater value than separately… the 10x level of value. Human relationships are the key, and an intentional culture designed to nurture, encourage and reward positive relationships – whether peer-to-peer or hierarchical – is the ‘secret sauce’ to getting culture right.
That said, it really does not happen by accident.
Of course, this all assumes you’ve already chosen well on your acquisition target, meaning it’s the perfect fit to help add new value to each organization’s customer bases, each fills the ‘gaps’ of the other organization, and at the same time, the merger gives you new competitive advantages in your market.
Fun fact: “1+1=3” is likely a modern-day adaptation of a quote originally attributed to Aristotle, “The whole is greater than the sum of the parts.”
– “Metaphysics” by Aristotle, circa 350 B.C.
Culture Starts and Ends at the Top
Like it or not, culture starts at the top and ends at the top. You can build the blueprint for a high-performance, engagingly fun culture, but if you don’t live it out day to day in the C-Suite, it’s unlikely to stick. The results of which are often seen in lower productivity, client and associate attrition, and from that, lower revenue. In short, culture is serious business.
So here are some ‘merging culture’ tips worth exploring if you’re on this M&A journey and giving serious consideration to becoming more intentional about how you’ll effectively blend two organizations without sacrificing each organization’s individual identity.
1. Find the common ground between both organizations.
You found each other for a reason. Understand how each entity treats its stakeholders and identify the commonalities upon which you can build the newly upgraded ‘cultural foundation.’ That means respecting where each organization is at the time of the merger and mapping out a plan of where you’ll go together moving forward. Some traditions will stay, some will go, and ideally, you’ll build new ones together. Be most mindful not to simply ‘steamroll’ over one organization’s identity and assume or mandate it must ‘become you now.’ Can you say #massexodus?
2. Recognize that words matter.
It might seem minor in the scheme of things, but how you talk about your people and your business sets the tone for your culture, and once again, it starts at the top. Are you setting a tone of integrity and respect? Are you putting people first? Are you respectfully communicating and collaborating?
Early on, we set some very clear and intentional language that still holds true today, and in my view, is one of the core reasons for our success. Our language is how associates, clients, and partners view us, and they remain at the heart of our culture. If you’re going to differentiate yourself in the market, be sure your culture is permeated with your own positive and intentional language.
Here are a few examples:
TRADITIONAL CORPORATE WORD & MEANING
OUR WORD & MEANING
A number of people assembled together
People gathered for a purpose
A person who works for another for compensation
A person united with another or others in an act, enterprise, or business; a partner or colleague
A person who purchases goods or services
A person or group who uses the services
of a professional
A person or agent who represents an organization, or a person who solicits business in a specific territory
A person who possesses special knowledge
|Manufacturers or Vendors|
A company that makes a product or a business that sells a particular type of product
|Partner or Supplier|
One of two or more people, businesses, etc., that work together or do business together, or a party that supplies goods or services
|Product & Services|
Something that is made to be sold or used; commodity
|Expertise & Solutions|
A special skill or knowledge or an action or process of solving a problem
Expertise & Solutions
A special skill, knowledge, action, or process of solving a problem
3. Finally, don’t take yourself too seriously.
We work hard and we play hard. Work gives us meaning and purpose, while play is designed to build deeper relationship bonds between people, create trust, and build lasting memories. It’s an essential component of a high-performance culture, and sometimes that means self-deprecating humor is necessary.
While I probably wouldn’t have created the “Flat Zack” concept ahead of time (reference picture below – essentially a play off of the kids’ series “Flat Stanley”), I happily delegate the ‘fun making’ to our incredibly capable team and always work to embrace it. Seeing my torso on a stick held by our team and their children was well worth it.
If the average human in the U.S. spends about 30-35%* of their adult age at work, then we as CEOs better find a way to inject some levity onto the scene. More often than not, our egos are left at the door and replaced by kindness, respect, integrity, and yes, fun.
Creating a combined culture means associates from both organizations become energized by new insights and collaborations, helping everyone see and feel the day-to-day impact of joining forces. If done well and planned intentionally, your newly combined culture will become the lifeblood of future success.