My partner Jeff just sent me a link to a page on the PwC website where they unveil the results of their 2012 Annual Global CEO survey. PwC is a client of ours, and we have a lot of respect for their approach; the info they share is well worth your time. It's broad-based and well-documented, and the patterns they extract are both useful and interesting.
One of the trends that caught my eye: US CEOs are about 50% more likely this year than last year to say they are planning cross-border joint ventures, strategic alliances, or mergers/acquisitions. That's a big jump. I suspect it's partly because CEOs don't feel quite so beleaguered as they did last year - the economy isn't booming, better it's better than it was. And when you're feeling less fear and anxiety overall, you have the mental and emotional bandwidth to think beyond your own borders, both literally and metaphorically.
Because some of the work we do with clients is around transition management, this got me started thinking about how easy it is to plan to merge with or acquire another company -- and how difficult it is to actually do it well. And the degree of difficulty only goes up when you throw in the complexities of different languages and countries. In fact, we've learned that the single most important element of managing a successful jv, merger or acquisition is attending to merging the cultures of the companies involved. And when you're combining not only company cultures, but the cultures of different countries, it's even more important.
Listening becomes your most important tool as a CEO or other senior exec in this situation. CEOs (in my experience) tend to over-focus on the financial, due diligence and purely logistical aspects of big transitions like this, and under-focus on the people involved, and how to help them through the transition with the least amount of disruption and disaffection possible. CEOs and their transition teams often don't ask important questions, like: What are people expecting from you, and what do they fear? How have they done business in the past, and how is it similar to or different from (and better or worse than) how you've operated your company? What do they like about their company and what are they most proud of? What do they hope this new partnership will change -- and what do they hope it won't mess with? How similarly or differently are employees treated in this other compeny, and what's the rationale for that?
Too often, I feel that cross-cultural acquisitions and mergers are approached as though these issues are unimportant - there's almost a sense that people will just keep operating like little clockwork gears, unaffected by the changes all around them. That's never true.
I applaud the intention of US CEOs to expand beyond our borders; I believe making businesses more globally based is ultimately good for economies, consumers, and the businesses. And I encourage you to proceed with curiosity and openness, so you can use what you discover to create agreements, models and approaches that will work cross-culturally now and into the future, long after your deal is done.
