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Culture and Authentic Leadership: Missing Components for Successful Mergers and Acquisitions

Forbes Books
POST WRITTEN BY
Ronit Molko, Ph.D., BCBA-D

Mergers and acquisitions are on the rise in North America, and this includes the field of autism services and behavioral healthcare. However, despite the expectations and capital behind them, mergers and acquisitions often fail. Perhaps we should devote more time to considering how culture can aid investors and managers in navigating integration. 

Research professor, best-selling author, and powerhouse speaker Brené Brown equates courage and strength with vulnerability. It’s a message that has personal resonance for me. When I first became a CEO, I spent considerable time afraid of being seen as vulnerable or as someone who didn’t have all the answers. Many leaders fall into this trap; so many people are counting on you, it creates unbelievable pressure to be seen as in-control and impervious. It was once I was able to be vulnerable that my leadership became truly authentic.

We have been conditioned to hide vulnerability for the sake of professional success. However, authentic leadership requires vulnerability; it requires opening yourself up to critical feedback and being honest about uncertainty. It means being courageous and taking chances, but also knowing failure will happen and when it does, you learn from your mistakes and persevere. These are qualities that naturally make us feel a loss of control, but that vulnerability in leadership fosters a genuine company culture.

When leaders are open about their experiences and the challenges they face, they allow for genuine connections to be formed with their colleagues and staff. It also encourages every person in the organization to be more forthright and honest. This fosters an environment and a culture where people have more appreciation for each other, and where creativity and ideas are shared more freely. That cohesiveness will absolutely improve performance and outcomes.

Culture is inextricably linked with strategy. If you don’t have an intentional culture that aligns your employees, it can get in the way of executing strategy—as the saying goes, culture eats strategy for lunch. Yet, I have seen many investors not devote the proper consideration to company culture when executing mergers and acquisitions. In fact, Queen’s University’s Industrial Relations Centre has concluded through its research that mergers and acquisitions often fail because “managers neglect human resource issues.” When asked about the failures of mergers and acquisitions to deliver the projected results, the misalignment of culture between the merging organizations is often referenced as a significant factor.

Culture is critically important for any merger or acquisition to be successful, particularly in the field of autism services. Many of the service providers in the autism industry have been founded and built by clinicians who are very mission-driven and want to make a difference. If that company is acquired or merged without a clear vision, mission, and a structure for how company culture will be maintained, there is a risk of losing the best clinicians to competitors. In addition, since the consumers of those services, the families, are often very attached to the brand and culture of their service provider, loss of clients and reputational damage are also the result of failure to pay attention to culture.

A strong, intentional culture driven by authentic leadership is essential to successfully managing a merger or acquisition in this space. It should be one of the chief concerns of investors and executives entering into any such endeavor. Moreover, any integration between companies needs consideration of existing cultures and whether or not those cultures are congruent. Trying to integrate misaligned cultures inevitably creates friction and negatively impacts business performance.

Deloitte, an industry-leading audit, consulting, and advisory company emphasizes the importance of culture in mergers and acquisitions. They recommend making culture a major component of managing the changes to the company by assigning it to specific individuals and insisting that cultural work be focused on issues that are specific and well-defined. In other words, empty platitudes cannot replace a genuine culture with authentic leadership.

“The Steering Committee should reject soft, vague, and poorly defined presentations of culture. Instead, culture owners should be required to discuss issues that are specific, well defined, and supported by specific examples that can be tied to business results. This is the difference between culture being addressed by general exhortations to enact "teamwork" and being addressed by analysis and interventions to increase measurable collaboration among the members of, for example, the new company's merged sales force.”  -- Deloitte, ‘Cultural issues in mergers and aquisitions

As the field of autism services continues to grow, investor capital will continue to consolidate the market through mergers and acquisitions. If these larger platforms want to retain the clinical talent needed to thrive and reduce the inevitable hurdles that come with such structural changes, there needs to be more focus on culture. Leaders should remember that an authentic culture can only be maintained through authentic and vulnerable leadership, and investors would benefit from placing more emphasis on ensuring an authentic leadership and positive culture are in place before pulling the trigger on their plans to consolidate the market.

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