Organizational Culture Expert Offers 4 Tips for Combating M&A Failure through Organizational Constitutions

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2014 has been a banner year for merger and acquisition activity by volume – though 40-60% of those unions are expected to fail. Nationally renowned organizational culture expert S. Chris Edmonds offers 4 tips for top executives to position their change initiatives for success through the use of organizational constitutions.

The problem is, most leaders have not experienced a successful culture change.

A recent BusinessInsider.com article revealed the volume of global mergers and acquisitions has reached its highest level in seven years. “Companies have strategic imperatives to do deals, they have the cash to do deals, and they can borrow additional cash at record-low rates,” explained Frank Aquila, a mergers and acquisitions lawyer at Sullivan & Cromwell, LLP. “It really is a bit of a perfect storm when it comes to deal-making.”

Unfortunately, a “perfect storm” for big deals can quickly devolve into a crisis for employee engagement, as companies attempt to integrate not only operations, but also disparate organizational cultures. As cultures clash, companies can struggle to realize the efficiencies they need to improve their standing in the marketplace. The hard numbers tell the story of this disconnect: 40-60% of this year’s mergers and acquisitions are expected to fail.

“The problem is, most leaders have not experienced a successful culture change,” observed S. Chris Edmonds, organizational culture expert and author of the upcoming book "The Culture Engine: A Framework for Driving Results, Inspiring Your Employees, and Transforming Your Workplace." “And even fewer leaders have led a successful culture change. Leaders owe it to their stakeholders to become aware of and address the issue of culture alignment, particularly when they undertake major change initiatives.”

As the fourth quarter of 2014 (and year-end reporting) approaches, Edmonds urges top executives to familiarize themselves with his proven approach to designing and aligning organizational cultures. “An organizational constitution provides top executives with the step-by-step tool they need to lead their organizations through major change, especially when the stakes are high and the timeline is tight. In 18 months, these constitutions can inform gains of 40% in both employee engagement and customer service scores, as well as 35% gains in net profits for the business. These gains can make the difference between a successful merger or acquisition or a failed one.”

With a promotional launch of Edmonds’ book "The Culture Engine" planned for the last week of September in 2014, the author is offering four complimentary tips for creating organizational constitutions – documents that Edmonds refers to as “disruptive technologies” in terms of their effect on market position and bottom-line results.

Tip #1: Define desired values. Define what “great team citizenship” looks like for every leader and employee. These values form the foundation of an organizational constitution, as they reflect the ideals upon which the business operates. Values should focus on desired principles, such as standards for honesty, integrity, work/life balance or the meaning of organizational loyalty.

Tip #2: Identify valued behaviors. Specify the behaviors that every leader and employee should demonstrate, in every interaction, with both team members and the public. Be sure the behaviors are concrete, observable, and measurable. When taken in concert, people’s behaviors will serve as evidence of the organizational constitution. This evidence will be noticed by both internal and external stakeholders, and will be used to judge the quality and health of the organization’s work environment as well as the organization’s performance .

Tip #3: Examine current beliefs. Most people don’t examine their beliefs every day. They just do things that seem to make sense to them. A crucial step in creating an effective organizational constitution is highlighting “flawed” beliefs that may be driving undesirable behavior. For example, a work environment operating from a “competitive interaction” norm instead of a “cooperative interaction” norm encourages withholding of information and “I win, you lose” battles daily. Create a safe space in which leaders and employees can pinpoint and discuss negative beliefs and redirect them toward more productive ones.

Tip #4: Manage behaviors – not attitudes. Contrary to popular belief, people’s attitudes can’t be managed. By definition, attitudes are internal, inside each leader and employee. Even initial high performers can lapse into poor attitudes and lackluster production when they’re placed in pressure-cooker situations. Managing behavior is the only concrete, measurable way to encourage good/dissuade poor organizational citizenship.

In "The Culture Engine," Edmonds expands upon these four tips and offers additional insights into building an effective culture that will weather both the daily moves of the marketplace and the toughest change initiative. Joseph Michelli, New York Times #1 Best-selling author of 6 business books including Leading the Starbucks Way and The Zappos Experience offers the following praise of Edmonds’ work: "Where has this book been? 'The Culture Engine' demystifies the 'what' and 'how' of driving your company's culture to produce transformational business outcomes. S. Chris Edmonds operationalizes culture while offering practical tools necessary to align your people and gain profound competitive advantage. Thank you for this game-changing book."

A promotional launch for "The Culture Engine" is slated for the last week of September in 2014. The author will be sharing his expertise during a complementary webinar hosted by Weaving Influence on Wednesday, October 1, at 12:00 pm ET. For more information or to sign up, visit the webinar sign-up page. To review a complementary downloadable book chapter, watch the book trailer, learn more about bulk buy offers, book the author for interviews or guest blog features, sign up as a blogger supporter, or download shareable graphics and tweets, please click the embedded links or visit http://www.thecultureengine.com. To see what others are saying about "The Culture Engine" or to write a review, please visit the author’s Amazon page.

S. Chris Edmonds is the founder and CEO of the Purposeful Culture Group, which he launched after a 15-year career leading and managing teams. Since 1995, he has also served as a senior consultant with the Ken Blanchard Companies. Chris has delivered over 100 keynote speeches to audiences as large as 5,000, and guided his clients to consistently boost customer satisfaction and employee engagement by 40+% and profits by 30+%. He is the author or co-author of six books, including "Leading At A Higher Level" with Ken Blanchard. His next book: "The Culture Engine: A Framework for Driving Results, Inspiring Your Employees, and Transforming Your Workplace" will be published by John Wiley & Sons in September 2014.

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Megan Constantino
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