Merger and acquisition activity is very intense right now, as larger
real estate service providers look to pad their portfolio of services
and expertise, and expand their reach into secondary and tertiary
markets by acquiring other firms. Recent examples of some of these
mega-deals include Blackstone’s recent acquisition of Gramercy
Property Trust for $7.6 billion and Greystar’s acquisition of EdR.
This M&A activity is also extending across borders as more mid-level companies, regardless of industry, seek to take advantage of
the benefits of globalization and tap into overseas markets.
Let’s say you’re one of those
companies. You’ve done the
research, identified the best market for growth and made the leap
to merge with or absorb a foreign
company. Now comes the hard
part: integrating your new holding
into your corporate fold.
As one of the largest developers
of class A commercial space in the
It is no secret that different companies will have different ways of
‘doing business’ and it’s often a challenge to merge the distinct
styles of work. This challenge becomes even more protracted when
an international element is introduced where differences can
extend beyond the realm of corporate culture.
These cultural differences can manifest themselves in a number
of ways and can be as small as the best way to pronounce the country name (Grand CayMAN, not CayMON in the Cayman Islands) to
as large as expectations of working hours (extended lunches in
Spain and the summer vacation shutdown in France and Italy). If
they’re not resolved, these clashes can lead to diminishing morale,
lowered productivity, a lack of projected synergies and significant
financial losses if the deal fails to achieve its project value.
So how do you win the company culture wars? Here is a guide.
Identify the Differences. Imagine you’re a large US-based brokerage that’s just acquired a small real estate data and analytics company based in the Cayman Islands. The team is made up of more
than 100 employees across brokers, finance, marketing, senior
leadership and administration. By comparison, your new acquisition only has a staff of 20 including analysts, administration and
management. The first step to integration should be identifying the
differences and similarities between the company cultures.
Use Your Tools. This can be done through a series of handy tools:
process flow charts to map how work is done; decision paths to better
understand how decisions are made and who has the final say; and
staff surveys to identify current attitudes, behaviors and priorities.
These tools can lead to important insights. In our fictional case study,
these tools identify two major differences. With the company you’re
acquiring, all major business decisions are made solely by the business head, while your firm’s decisions are made by team consensus.
Your company has a strong customer-centric approach to doing business. The other is more focused on the importance of gathering data
as opposed to presenting it in a form that’s useful to the customer.
Acknowledge the Expectations Gap. You decide that you want to
help the company you’ve acquired understand your way of decision-making and customer-centric approach to work. Identifying these
gaps in expectations enables a concrete plan for change. This plan
should include a firm agenda and goals for defining the company
culture and values that you want to work towards. The president or
CEO should take the leading role in setting and championing this
agenda ensuring that they clearly communicate the what, why, and
how of any changes and reiterate that they are core to the business.
Define the Values. Your values cannot merely be a series of adjectives
or mission statements. They need to be demonstrated by measurable
behaviors and ways to incentivize the adoption of these behaviors.
Identify Your Change Champions. Once you’ve decided on an
action plan, it’s important to identify key people at both organizations who are seen as having influence over their peers to act as
value or change champions. Make sure to choose your change
champions from all levels of staff, not just senior leadership, as companies often neglect the soft power that long serving or administrative staff have in influencing their peers.
Realize It’s a Process. Alignment is a process, not a destination,
and with every M&A there will often be periods of friction as
employees adjust to new ways of working. However, if the senior
leadership is committed to building a positive and integrated company culture, then staff will be sure to follow. ◆
You’ve Acquired a Foreign
Company. Now What?
Alignment is a process, not a
destination, and with every M&A there
will be periods of friction as employees
adjust to new ways of working.
BY JACKIE DOAK
Jackie Doak is president of Dart Real Estate in Grand Cayman, Cayman
Islands. She may be contacted at firstname.lastname@example.org. The
views expressed here are the author’s own and do not reflect those of
ALM Real Estate Media.