How selling a business can lead to a stronger culture.

There is something incredibly finite about a sale. Whether we talk about a cherished car or a lovingly tended home, a business proudly built from scratch or indeed a business product; the moment we complete the sale the popular perception is that we hand over the rights. 

This idea of finish, of closure, is something which struck us recently when listening to someone talk about their recent house sale. Their quiet acceptance of the fact that part of the garden which they had nurtured for over thirty years was going to be ripped up in favour of a garage served to highlight the way in which a sale can be far more than an exchange of money and property. But does it have to be like this? Well in this instance the seller could have included a clause in the contract which restricted development on the garden and some do take such steps to protect part of the house or garden but it is fairly unusual in house sale terms. 

Taking steps to preserve the culture 

In business too, whether we talk about sales, mergers or acquisitions, leaders can take some steps to preserve the culture or product and mitigate the effects of the sale. Of course, in some instances those charged with acquiring or selling an organisation may have no interest other than to maximise the potential gain for shareholders and investors. But unless some form of asset strip is on the cards then taking care to identify and retain some of the key elements of the business culture may not only help to ensure a successful transition, it may also prove beneficial to the acquiring organisation. In fact, when mergers and acquisitions fail to achieve the expected synergies, one of the key failure points is insufficient attention being paid to organisational culture. 

This need to pay close attention to culture comes up time and time again whenever there is a change within an organisation. In recent weeks we’ve looked at the way in which culture and engagement play their part in creating successful transitions as start-ups take on new employees or as business control passes to the next generation. The same is true when looking at M&As.  If you care about your product, your employees, or your customers then handing over control need not equate to handing over the culture. 

Our principles are not for sale” 

It’s an idea which may be illustrated by the takeover of the Innocent Brand by Coca-Cola. The Innocent values are so intrinsic to the Innocent brand and methodology that the deal was based on the understanding that the values would remain in force.  As Co-founder Adam Balon commented: ‘Our principles are not for sale, but our smoothies are.’ 

So why don’t more leaders take the time to really understand what they are acquiring or to preserve some of the values of the organisation which they are looking to dispose of? Partly it comes down to a lack of time and partly to a lack of understanding about the importance of organisational culture in driving results. When mergers or acquisitions are being contemplated the emphasis tends to be on financial and legal due diligence and on identifying potential cost savings. But unless cultural due diligence is brought into the mix then there will never be a true understanding of the organisation being acquired, nor will there be a realistic chance of achieving synergy. 

All too often sales are seen as the end of the story, a time for closure. But if proper consideration is given to cultural due diligence and future culture design then the story can not only continue but can deliver long-term customer excellence and growth.