Virtual Summit Recap: Dimensions to Cultural Integration

Hello M and A Friends. This podcast is brought to you by dealview. M&A is coming back. Would you like to avoid wasting hundreds of hours managing Excel Trackers and building PowerPoint reports? Do you want to make your process more efficient? Well, I have great news for you. Deal Room is an MNA management software to save you time headaches and improves collaboration so you realize value faster. Learn more@dealroom.net here's to the deal.

That was my lovely daughter Shila. If you want to keep up with the latest on M and A Science, our live streams, networking events, when we release new resources, visit mascience.com and subscribe to our newsletter. You can Also follow our LinkedIn page to catch highlights of our interviews and if you like our content, please tell a friend so we can keep growing our community of forward thinking M and A practitioners. Now on to the interview. I'm Kisam Patel and you're listening to M and A Science where we talk with Deal professionals and learn valuable lessons from their experience. This podcast focuses on stories, strategies and what actually happened during M and A Deals. This interview is a rewind from our virtual Summit. Hope you enjoy it. If you want to see the full version with video, visit mascience.com hi everyone.

My name is Marsha Lewis and I'm the Director of Marketing at Deal Room. Please join me in welcoming our next speakers. We have Val Strappa, Managing Director and Healthcare integration leader at JPMorgan Chase & Co. And Jonathan Shirey, Director at Guidehouse and they will be discussing 21 dimensions to cultural Integration and Take it away guys.

Thanks Marcia. Really appreciate everybody joining today and Kisan again, thank you. Thank you to M and A Science and your team. It's been a fantastic two day event so far. Before I jump in, as Marcia mentioned, I'm Jonathan Shari, I'm out of the New York City, I'm a Director with Guidehouse. Most importantly, I'm actually with Val Strappa who leads M and A Integration for healthcare at JPMorgan Chase. Before we jump into the focus of the topic, which is culture, maybe you could talk to us about your extensive background in M and A because you've had really interesting experiences globally as well.

Yeah, thank you. Hi Jonathan and first of all, thank you for having me here. Congratulations to Kieson and all the speakers. A little bit about me personally. Italian by background, born in Argentina, lived in Mexico for 20 years and now I'm a permanent resident in the US. First part of my life I was a professional tennis player and then I decided I wanted to be an engineer, industrial engineer by background. Right after graduation I joined McKinsey. I spent a few years with them and then right after McKinsey joined GE and GE was considered the machine of M and A and integration with ge, I spent significant amount of time portfolio integration across several countries in Latin America. And then when I joined Citibank five years later, we went through a really large and complex acquisition in Central America, Vancouver. I know we're going to talk about culture. That's where you see different cultures within cultures. And it was a fascinating acquisition. Great team, great people. And then also with Citi, what I did was integrations and also divestitures globally. So that was another experience that added to my background in M and A. And now I'm leading the integration of a healthcare payment company at Fintech that we acquired with JP Morgan. And this is actually our second one and it's been a great journey.

Wonderful. Thanks, Bao. If anybody's wondering where the talent lies in today's conversation, Bao has been a professional tennis player, engineer, management consultant, and M and A professional. I'm still trying to figure out M and A. So this is a little bit of a lopsided discussion, but certainly glad to be part of the brand recognition of you, Val. On a more serious note, today's discussion is really focused around culture. For the last three decades, anytime you look up the top five reasons why an M and A integration fails, it's always listed around culture, but it hasn't always been well defined. Maybe as a starting discussion point, why is culture even important?

As I was preparing for our conversation, I was going back to Jack Welch's most significant podcasts or YouTube videos. And he said it right there. He said, the biggest mistakes I've made when we acquired companies, and he said we acquired 200 companies a year roughly, was when we made decisions just on numbers and we didn't pay enough attention to culture. Because in the end, the characteristics that make company an attractive merger or an attractive acquisition are reflected in the talent you acquire and the way they get things done. You can conclude that in the end, the underlying reason for the deal is the talent and the culture you are acquiring. For me, culture is everything.

You know, one of the things that I found very interesting along the way is I think when people start to talk about culture, it's always on a different definition. And that's been one of the biggest challenges around getting alignment in culture. One of the areas that I've spent some time researching is trying to define culture. And we've discussed Value. And I've Talked about the 21 dimensions that I've been researching and how that bubbles up. One of the areas I think you've really honed in on, though, is the people side. And one of the examples you gave in our discussions was the importance of how you execute the culture itself in alignment with people. And could you elaborate a little bit more on that type of example and how that shows that even though two companies are interested and prioritize our people, the way they execute it is different?

As you start putting an integration office together, I think there's three main objectives, right? Of course it's deliver the business case of the acquisition. That's no doubt about it. But as an integration office, the first three things you want to do is business continuity. Don't disrupt the acquired company, right? Make sure that employees and clients will continue to do business the way they did business the day prior to the acquisition. Second one is how do you extract value from that acquisition? And third one is how do we build an operating model that fits within the acquired culture and operating model, but also that preserves the value of the asset that you just acquired? From my perspective, cultural integration starts before the deal closes, right? And when you go through the due diligence and you start analyzing a company, many times I think we look at the values of the target, but we don't go deeper. I think in many cases I've seen it's like, oh, they share the same values, right? We care about, for example, we care about people, and we care about having our people develop within this company. But I don't think that level is enough. Culture manifests itself in behaviors. How do you behave in a meeting? How do you make decisions? How do you appraise performance? How do you recognize execution? So one great example, going back to the consultants conversation, but I was listening to the McKinsey podcast on extracting value from M and A, and they said it very nicely. They said two companies can have the same value. We care for people. But for one company, it could mean this is a lifelong employment. So people that joins the company expects to retire with that company. For company B, we care for people. Could be we were going to evaluate your performance every six months, and we're going to make talent decisions every six months. So just imagine this company A expected to stay with the company for many years, and then company B, you have this talent that used to be evaluated every six months, and tough decisions will be made on talent, that culture. When you put those two together, I think we better do a good Change management or put a good change management process in place. Otherwise it's really hard to understand each other. Right? Just think about behaviors in a meeting, think about how people relate to each other, how do they partner with each other? I think we have to go deep to understand what do we mean by culture and cultural integration.

Yeah, absolutely. And as you're talking through that, that hits a lot of the areas that we found under the people section of 21 dimensions. And so you know when you look at organizations, you've got an organization structure, right? Some organizations are more flat, some are more hierarchy, different titles. We've got staffing and selection and how do you hire, what are the types of people and skill sets that you need? Are those similar, you know, what are the backgrounds? What's your diversity inclusion look like? Also like the tenure of people, right? You mentioned there the difference of people that they're there for the career. If somebody's been at a company for 30 years and another company's young and they've been there for five to 10, I bet that that's probably something that's very interesting for you because you've done both sides, right? Like you've been working with these massive corporations, you've done it globally, but you're also integrating fintechs and so that cultural integration has to be something of importance as you're going through the process. Is that a fair assumption?

Yes, absolutely. If you think about fintechs and you compare fintechs with large corporations, right? Fintechs most likely have grown with the same team of people. They've grown their company, it's their company. I think the most scarce resource they have is time and money. In my experience decisions are made very top down. They have a very process oriented decision making and every decision that it's made is thought through, at least in my experience. I'm not saying that's the case for all fintechs, but the fintech that I interacted with, decisions are made within a very small group of people, cascaded down to the entire organization and information flows very quickly because it's a small group of people. When you bring fintechs into large complex organizations, decisions are not made by a few number of people. It's more of a federated approach, it's a consensus approach and everybody has an opinion, right? Because that's how you make sure that you analyze every aspect of the situation and you have a control function and you have a sales function and HR and everybody will have an opinion if they attend a meeting. And meetings tend to Be large. That has been my experience as I work with large number of people. I saw no difference from GE to Citi to JP Morgan because it's so large you need different people to agree different decisions. That is where you start experiencing the difference in culture. You have a fast moving company that is used to make top down decisions quickly in a very structured way and then you put them together with large organizations and it takes a little longer. And there's a reason for that. I don't call that bureaucracy by the way. I know that many people refers to large corporations and the bureaucracy of the large corporations it could be. I think it's so large that you need to make sure, particularly in highly regulated environments, you need to make sure that you listen to everybody around the table because everybody will bring different expertise to the table. So that to me is the number one thing to look after when you put a fintech and large organization together because that's where both sides struggle. You have company A, that is a fintech wants to move fast or gets frustrated for all the iterations before making a decision. You have company B needs to consult and review and revisit and approve and different levels of approval for one decision. And that can be frustrating if before deal closes or as part of the first 60 days you don't try to a really understand the acquired company culture and try to explain and onboard that culture into the acquired companies, into the acquired culture. You cannot take for granted that these two cultures will understand each other. Actually, I think it's the opposite.

What I love about that example is that that's you know, an example of fintech and say a bank or a financial institution. But it's really kind of if you strip it down it applies to any industry where you have a larger corporation maybe buying another different size corporation. There's different maturities in their processes, different approaches. And so I think it, you know, really applies and that's why I think your experience is so interesting because you bring health care, you financial institutions to bear. You hit a point as you're going through around the culture and actually understanding it. One of the things that we find out and it's so fascinating that it's one of the top five reasons for failure. But nobody wants to take ownership of it because I think everybody always points to each other, they're responsible for culture. It comes from the top down. You hear everybody loves to point at hr, which HR looks and says I'm trying to manage the people but not the actual culture. I think everybody believes everybody's A little bit responsible for it. Is there a role for a chief culture officer or somebody that's truly accountable, or does it really need to be spread around in accountability?

I'm a firm believer that cultural integration is not something that you can outsource to a third party, even though that third party is part of the integration team. Because everybody has to own it. Creating accountability for every member in the integration team. And I'm not just talking about integration team as a core team in charge of leading the integration. I'm talking about the program people engaging and involved in these integrations. We all own it, right? We can't just delegate to somebody with bring a framework, bring good communication skills, let's train people. That's it. It's every day that we own the cultural integration and everybody plays a role. I do think it is important to have a structured approach to cultural integration. You can call it change management, cultural integration. And I think that really helps because having somebody that will look into the different aspects of culture and the activities that will help integrate that culture from a systematic or process perspective, it's really important. I don't think that role is accountable to ensure the real cultural integration happens, facilitates the integration. But it's everybody who has to feel accountable for integrating the culture. What is culture? Culture is a set of behaviors and set of actions that are transmitted over generations. Right. And how do we learn those behaviors? Well, by example, or somebody teaches us. Right. This is how we do things in this house. This is how we do things in this culture. One of the big mistakes I've seen and made many times is we take for granted the person in front of us understands how are we supposed to make a decision or how are we talking about a subject or one topic. We could be talking about a process. And party A might be approaching a process one way, company B a different way. So I think making sure that in every interaction, in every meeting, there's a little bit of let's take one step back and let's give everybody a little bit of background of what are we talking about, why are we talking about this, how are we going to approach it? And making sure everybody understands the why and what and has an opportunity to express concerns, questions. It's really important. It might sound like it will slow you down, but in the end, I think it will help you get faster to execution.

Yeah. And you hit on two kind of key areas that we found in our research. One is we've labeled it management, but underneath that is, you know, you said about the models of the behaviors and kind of the norms. There's areas of dimensions around goals and measures, you know, decision making, making processes, the way the leadership behaves and reacts and their focus areas. And a lot of that's also the investment of the strategy. Right? Like if your strategy is going out to a certain clientele, you're going to model your kind of approach around the behavior of that clientele. So that also starts to tie together is like, how do your clients expect you to respond? Are they expecting to answer emails immediately or are they more laid back? Or the locations, you know, the cultural norms of the country? So all of that goes together very well, which I think is a key part of understanding how a company has its own behaviors and norms. And, and so when you look at two different industries, which I know you've, you have experience trying to integrate, does that start to come in the fact that there's different strategies for those industries, or are there a lot of overlapping values or overlapping areas where you can build on the culture and actually create similarities and then take out the 2 or 3% differences?

I think every deal is different and it doesn't have to do with the industry. It has to do with the deal itself. From my perspective, everything starts with the strategy of the deal and what the incentives to deliver the business case are. Engaging the integration leader as part of that deal structure. It's going to be critical because many times we think about culture, but we don't think about what are the incentives behind behaviors. So if I have a deal that will incentivize X behaviors, I need to understand that. I need to understand how are we structuring a deal and what that structure will mean for execution. And cultural integration. The structure of the deal has to be well known and has to be a critical component as we define how we're going to approach the integration. And every deal is different. So I do agree with you that you can have a framework for integration and there are some similarities that you can apply. And I'm going to talk a little bit about those. I think every deal is different and it's very much related to the strategy, the spirit of the deal and the structure of the deal. And of course, then the industry, the size of the company, that will play a big role. But I think those two, the spirit of the deal and the structure of the deal will delineate how people will behave as you start integration. What I do think it's a good best practice is you make the integration lead part of the deal structure, that cultural integration starts before the Deal closes. And I think it all starts with having those conversations with the target leadership team to understand who they are, how did they build the company, what is important for them and understand it in a very structured way to understand across the 24 dimensions, to use a framework or a reference. And I know people is asking for your framework, Jonathan, so that would be great for you to share at some point, but in a very structured way, go area by area and understand how do we do things, how do we compensate people, how do you approach decisions, what are the things that you like and what are the things that you don't like about your company? So that to me it's critical. Once you understand each other, then I think there's. And that can be mapped by the way you understand company A and then you share how company B gets things done. And you can say, right, like okay, you compensate based on X and Y and where are these two companies in that spectrum? And you can do it dimension by dimension. So now you understand the difference. So you understand how the two companies approach the way they get things done across the 21 dimensions, but you also identify the differences. So once you have those differences identified, you can decide what are the behaviors you want to preserve and what are the behaviors that will have a potential clash for the ones where you think there's an opportunity to preserve. You discuss how are we going to preserve these behaviors and how are we going to make sure we get closer to each other for the ones that will mean trouble in the future. And once you do, then you can say, okay, so what are behaviors that we want to see in our integration teams or across this program that will help us make sure this culture gets together or it gets integrated. And that is from my perspective, work that has to be done before the deal closes again. And I haven't seen many cases where this aspect of the due diligence gets done appropriately. Then you close a deal. When you close the deal, I think there's a very important conversation that needs to happen, CEO to CEO, to say these are the things that we want to preserve from your company as we integrate. These are the things that we're not going to negotiate because are really important for the acquirer, right? It could be because that's the way they do business, how they are perceiving the market or because of the regulation they are subject to for whatever reason. These are the non negotiables. Then these are the things that we will have to discover as we go through integration. That's why I really like Kiesen's idea of Agile integration. I've done a lot of agile projects, transformations, and even though you have this defined framework, agility is everything. You have a frame of reference. But as you go through the integration, it's important that we are able to adjust the direction is set, the culture we want to create is agreed, the behaviors we want to promote are defined. Now day one happens, and even though that's very nicely well defined, we need to communicate to both leadership teams and both integration program members. All that process that we've gone through, that pre acquisition process takes between 30 to 90 days, 90 better. But sometimes you don't have that time. And then there's another 60 to 90 days of onboarding both teams, putting specific emphasis on those pre deal closure cultural agreements and making sure that the integration team enforces those behaviors in every work stream of the integration. Right. And you have a set of workshops that will allow the teams to understand those differences, understand those expected behaviors, and agree how each integration work stream will behave and work together as the integration takes place. And I know it sounds a little heavy, but in my experience, I've seen it done very well and I've seen it done very poorly. Sometimes when it gets done well, execution and integration happens way faster with less friction. I think that you can make it happen fast, but a lot of friction can come with it. And I think that's where the risky part of integrations happen. Because if you start seeing attrition from the acquired company, there's a sign that you might start losing value of the asset that you just acquired. So again, just to summarize the long explanation, I think every deal is different, but yes, there's a programmatic or process to approach that cultural integration.

I love and I may plagiarize with reference as always, but strategy, spirit and structure. Right? You couldn't have summed that up better. So when you're talking through that, one of the things you just said was you've seen it done well, you've seen it done not so well. When you've seen it done well, is it because there's a prioritization on culture and there's an understanding of the next level and really the definition of the different, as you talked about the spirit to structure and the strategy as well as the different dimensions, or is it some other reason that really triggers the success of a cultural integration?

I think there's a couple of factors. There's not just one. I don't think the process will make the cultural integration just simply happen. Right. So I Do think that having cultural integration or cultural assessment as part of a due diligence, it's critical. And in most due diligences or due diligence reports I've seen, I hardly never seen a cultural dimension to it. My perspective is it has to be done as part of the playbook, number one, then there has to be a structured approach to it. But I think it's also very much through those leadership interactions that the culture of the integration is shaped. And if you can capture the hearts and the minds of the acquired company leadership, that's when you have that inflection point because that leadership will start influencing their own company on new behaviors and they will be the culture carriers for the integration. Then that's when you pass the torch from the integration leader or the acquired company business leader being the ones to make sure you take care of the culture, you preserve the culture, you keep people motivated to the acquired company leadership being the ones who start carrying the voice for this is how we do things in our new normal. And to me, that's when you've accomplished. When people tell you after a year our company continue to operate BAU and most of our employees are focused on clients and employees, that's a huge win. And when you see the new leadership speak the same language and be the culture carriers, that's when you are maximizing your chances of success.

You know, it's really fascinating because, you know, you've hit on so many points there around integrating a culture. And one you just mentioned is like the leaders of the acquired company carrying the torch. In that sense, it's almost like, you know, you're getting a referral from the customer, right? And they're saying, wow, this company's great. You know, you're always going to tend to listen to a third party rather than the company that's saying we're great. You know, it also ties into communication which, you know, in my own experiences, either being acquired, I've had a couple of different jobs where the company that I've worked at has been acquired, or I've also worked on the M and A side. And one of the things that's always fascinating is, you know, the communication, it's different. And some companies, when they're, they're making the acquisition, they'll say, wow, I've been communicating a lot, I've been over communicating. But what they don't realize is you may be communicating, say through very corporate emails, yet the other company's used to having these communications and water cooler talks. And so they may not even be reading those emails or actually that message may not be resonating with them. And so that's why I think where you start to go into having the acquired leadership be able to communicate. They know how people in their organization listen to messages. They know that communication style. So bring those two together and now you've got a referral and you've got the property communication methods happening, which is another dimension I think is really important. We'd be remiss if we didn't say communication was an important part of culture or integration. The other area that you mentioned is the non negotiables. I have never been given a list in my career or even seen it from a communication saying, these are the parts that we're never going to change with your culture or these are areas that you're going to keep exactly the same. You'll see Sprinkles, you'll say, oh, we'll still be the same company we were. We'll still have these values. But it's never like this was non negotiable. You can expect this to stay permanent. Is there a reason for that? Do you believe that that would be helpful in your own opinion? Or is there something around the non negotiables that could be better upfront understood, so that people aren't wondering, did I just lose the best part of the company I work for?

Yes. I think it's really important that those non negotiables are very clear. What I meant by non negotiables is the acquirer has to help understand the acquired company how to integrate in the best and smoother way and help fight the right battles. That's how I see it. Right. So if you acquire the company because you want to preserve these assets, these are the assets or the products that's behind the rationale for acquisition. Right. Those are the ones you want to preserve. And you even want to ring fence at some point and want to make sure that everybody knows as an acquirer, we're not going to impose or force our operating model on these three or four things because that's what we really want to preserve. That's the rationale behind the acquisition. But for the acquired company, it is also important to know what are the things that they shouldn't waste their time fighting on as they are integrated. Because fortunately or unfortunately, the acquired company most likely have to integrate with the acquirer. There are things that the acquirer will change for the new company. That's because you don't want to end up acquiring companies and having 10 different processes for the same objective or you don't want to have different cultures within your company. And I think the non negotiables from a cultural perspective are those behaviors that you enforce and that you encourage on people through your performance assessment process. Right. This is how we do business. And even if you try to influence, you're not going to be able to change it. Because if you follow these behaviors, if you follow the way that you're supposed to do business, then you'll be promoted, there's growth opportunities, you will fit in that culture, you'll become a leader of that company. It's hard to negotiate though, same as it is hard to negotiate processes or some controls or some technology integration. So I think it's the same. There are areas as you acquire or integrate a company that as an acquirer you will never negotiate. This is the way we do it and we don't intend to change it. Now there are many things that we can, not only the assets or the products that the new company brings, but the new culture is a breath of fresh air that they can bring and that sometimes will help you challenge the way we do things. And when I say we, most of my life I've been on the acquired side, not on the acquired side. So that's why I said the way we do things. I've been part of many acquisitions where the acquired company challenged the way we did things. And in the end we all got better by rethinking how we got things done, how we made decisions, how much time we invested in planning versus executing. So I think that initial conversation, it's critical because then there's no ambiguity, there's no discussion over things that as you escalate, you know what the answer will be. So why wasting your time? And then there will be things that are great because both sides know how it will play out and it's fine. And you will debate and then eventually you'll escalate and a decision will be made. But having clarity about these are the things that we don't want to change in the acquired company because this is what will preserve the spirit of the deal. And these are the things that we don't expect the acquired company to challenge because that will preserve our regulatory environment or our infrastructure or our product or whatever it is. I think it's important to have that conversation way up front.

Yeah. And you know, you hit a fantastic point where you talk about the acquirer also is experiencing change. Right. Anytime you bring on a new company, they're going to impact your culture and so you also need to understand what is negotiable and non negotiable from your own culture.

Exactly.

Which is key. Right?

It's key. And I'm glad you bring that up because I don't think this is a one way transformation or a one way assimilation. This is both ways. And I think again, the role of the acquirer leadership and integration team is to also ensure that the integration teams, both ends, are open to learn from each other and are open to, to challenge how can things get done better. And I've been in so many meetings where granted my background is ge, Citibank, JP Morgan, so large industrial machines that have very well defined rails for execution. Right. There's not much discussion about how things will get done. We know how things get done in these huge organizations. That's the culture, that's how we get things done. And I've been in many conversations where I thought I know how we're going to get things done and we have a good way to approach this problem. And then all of a sudden we get challenged by the acquired company and it's like, yes, wouldn't we be much better if we would embrace that behavior or that process or that best practice? Many times the acquirer itself so concerned about integrating, integrating, integrating that it could be suffocating the asset that they acquired and also losing the opportunity to advance together and even move your own company forward by learning from the new acquisition. It's really important that you keep eyes open and embrace change from both ends of the integration.

Yeah. And I have a great example I always go back on and it's one of those ones that's timeless because it just shows the acquired actually learning a best practice from the acquired company after a period of time of actually ignoring it. And it's also very practical in the sense that we all are looking at the change in evolution and technology from waterfall to agile. And then there's the hybrid of the both. The acquirer company actually was a very waterfall focused company to the point where if there was a project management waterfall technology, they would have had it. They did it very well. They were very robust, documented everything. And this was also at the time when anybody that said that they were agile, it was usually an excuse for saying I don't want to do documentation. If you remember those days, lack of.

Structure, I don't want to be managed, I don't.

Yeah, exactly, exactly. And I still think there's a little bit of that out there in agile. But you know, it's getting, it's getting More along the principles. And so there was a legal day one event coming up and there was an issue where they realized that there was a integration around the file sharing of customer data that was not prepared. And so the acquirer company goes through their process of sizing, scoping, waterfall, all the business requirements and they're like, this is going to take us six months. You had like two months to get in. Right. And the other company was like, wait, wait, wait, wait, let's go back, let's all calm down, let's take a look at this. And they come in and we're like, we can have this done in three weeks. And they got it done in three weeks. It was incredible because I actually watched the light go off on the acquired organization saying, this may be a real best practice. And now that organization has grown into one of the most agile leading organizations within the industry. So it was really just fascinating because it is a situation where you say sometimes the pressure to integrate, the pressure to hit your milestones, doesn't allow you to think strategically and really accept that, wait a second, maybe if we adopt some of those best practices, these can actually accelerate our organization and create more value out of the deal.

Exactly. And I think that's where also your diversity and inclusion practices will be tested. Because embracing a new culture is at the core of embracing diversity and being inclusive. Right. Being inclusive doesn't mean you have to in the integration aspect of it doesn't mean you will always have to say, I'm going to embrace the acquired company's culture or the practices. It means that you take the time to understand why is it important for the new organization, how do they put this value in practice, how will they experience change as we try to integrate them and what is the best way to address it together. And that takes time and that takes real leadership to be part of those conversations. That's why I said, I don't think you can outsource or have a third party take care of your culture. They can facilitate, but those conversations happen in the meeting, happen as you are getting to execution. It's up to the leadership. If you have a work stream, for example, Right. It's up to the work stream leadership to make sure you can steer those conversations and not let one culture or the other be disrespectful, have an inclusive approach to then come to an agreement or resolution. In many situations, I've seen the acquirer trying to impose this is the way we do things. And that's when you lose the hearts of the acquired company because you're ignoring their identity. Right.

And at the end of the day, we're all kids that have grown up into adults. And so nobody, even when you're a kid, wanted to be told what to do. Right. Like you want to grow together, you want to learn, so.

Exactly.

You have to be open and collegial and really provide a platform to enable your teams, which I think is important. And so we have a few minutes left. You know, first and foremost, thank you so much for joining us. And just from a sum up, you hit strategy, structure, spirit. You talked about making sure that the IMO integration leaders upfront in the discussion that they're also part of the due diligence, which is such an important part. You talked about the negotiable and non negotiable, really making sure that you get into the execution and understanding how things are done. Is there any other points that you'd like to outline that if you're an integration leader or even in the M and a cycle that it's important to keep aware of around cultural integration.

I think you summarized it very nicely. Thank you for that. And I really like the spirit, strategy and structure. The only other point I would add is as you think about putting together an integration team, it has to be a team that is knowledgeable about every aspect of the integration of course or subject matter, expert on a specific aspect of integration. But those individuals have to be people that know how to navigate the organization and very aware of change management practices. By change management practices, I'm not just talking about communication and training. It's very cultural sensitive. And also that together with the expertise, they keep the cultural aspect always present. Because without that in mind, that facilitation of mutual understanding is really hard to get things done.

Very well said, Val. Apart from surveys and interviews, what other approaches would you use to baseline the current state of a culture?

On one hand, you have the due diligence of each specific area, right? Hr, technology, sales, product, et cetera. So that's the product you are assessing, right. For each of the areas. And as you do that, you start getting into the cultural assessment because that's the outcome of what the company ultimately does. But I think as part of those specific areas, due diligence or chapters, there has to be an understanding of how the micro cultures play out. How does HR get things done versus it get things done within the acquired company? So I don't think this is just about surveys. This is about getting to know the people. The surveys are a mean to an end. It's a Structured way to make sure you don't miss a question. Making sure you can somehow measure how far or close you are with the acquired company in terms of behaviors. But it's also getting to know the people. Going out for a coffee or getting to know the people, people that you're going to be working with and really understanding their processes and their practices is going to be key. And one thing we didn't talk about and we don't have much time to do that is esg, right? Environmental, social and governance. That tells a lot about the culture that you are acquiring. Do they have a practice of esg? If they don't, then as an acquirer or as you do the due diligence, you can start extracting what do they do in terms of environment and what do they do in terms of social? What's the governance they follow, how disciplined they are. Which is very similar components to your 21 aspects of culture. If you dig deeper into those three, that will tell you a lot about the culture of the acquired company.

Yeah, I think you just hit a couple of the questions as well. So that's great. There's probably a whole other topic when you talk about culture, as you were talking about getting to know people, is trust. Right?

Trust.

How do you build trust? Because that's how people start to accept different cultures and different ways of doing things. Because you trust that the other person has a good intention in place and also has your kind of views and your perspective taken in. And I love the point you made about the inclusion and the diversity. When you're looking at just outside of surveys, there's data out there, right? Like, look at the makeup of the organization, the tenure, the years, the societal backgrounds, the diversity, the equity, inclusion, the education, all of that. You can look at the way that they spend. Are they spending highly under people in training or are they spending in different areas? What's their investment exactly? Decision process. There's a lot of things, I think, outside of the traditional surveys and just kind of hearsay meet, you know, discussions that you can really kind of start to get a little bit more data focused on culture, you know, with the interest of time. Those will be in future discussions. So, Val, again, thank you so much. It was incredible to have you on the session and the virtual summit and, you know, so glad to be of part. Part of it and be able to co host this thing with you.

Thank you for having me. It's been a real pleasure. Congratulations for such a great event. Thank you for having me here.

Thanks so much for listening to this episode of M and A Science. If you want to stay up to date on the podcast and all things M and A Science, including our events, make sure you sign up for our weekly newsletter@mascience.com MA teams that use proven techniques deliver better outcomes. Agile M and A is a science based framework that focuses on responsiveness, adaptability and continuous improvement. You can view the whole book online for free@agilema.com and if you're still using Excel trackers and old school virtual data rooms that charge per page Water Ripoff, I highly recommend taking a look at dealroom. Deal Room is designed for collaboration with internal and external teams. Visit dealroom.net to learn more. You'll also find lots of free resources, templates, ebooks, guides. Thank you again for listening to M and A Science. See you next time. Views and opinions expressed on M and A Science reflect only those individuals and do not reflect the views of any company or entity mentioned or affiliated with any individual. This podcast is purely educational and is not intended to serve as a basis for any investment or financial decisions.