When Two Become One: Creating Shared Culture Through Collaboration

Executive Summary

Merging two organizations can create unsettling disorientation for employees about the new organization’s mission, purposes, and values. The reality of the merged organization is that the cultures of the former organizations no longer exist. And yet, the culture of the new organization is emerging and unknown. Leadership of the new organization must attend primarily to the development of a new culture. By ignoring the cultural aspects of the merger to focus exclusively on its logistical, administrative, or operational concerns will detrimentally impair the long-term performance and success of the new organization. The culture of an organization drives how employees make sense of the organization’s identity, the work that they must accomplish, and how they will work to achieve its goals. In fact, culture points to an even deeper drive in people to create something new of the world that has been given to them. Therefore, a merger affords a unique opportunity to create a new culture that inspires the desire of its people and cultivates new leadership within its ranks. A merged organization can stimulate the development of shared culture through collaborative, heterogenous teams. ?

Background

Companies that seek competitive advantage through mergers by leveraging the strengths and assets of two organizations discover quickly that even the best strategies fail without proper attention to organizational culture. A 1999 Hewitt Associates survey of 218 major US organizations cited that integrating corporate cultures was the top challenge for 69 percent of surveyed companies.[i] In fact, organizational leaders must grapple with the question of the cultural impact on mission and strategy when the diverse realities of different organizations collide during a business merger. What kind of organizational cultures sustain long-term growth and performance? How can such cultures develop among a merged workforce and newly diversified constituency? And what place do individual cultural expressions and values have within a diverse organizational context? The implications of these questions challenge managerial assumptions of what constitutes a successful merger.

Research studies demonstrate why organizational culture is positively correlated to long-term performance. In their book Corporate Culture and Performance, John Kotter and James Heskett unpack three theoretical links between corporate culture and strong performance. Theory I associates excellent performance with strong culture, although little definition of a “strong” culture is proffered.[ii] Theory II posits that a strong culture involves an appropriate strategic fit between the organization’s ethos and the industry within which it operates.[iii] However, it fails to reckon for how changes within the industry should shape the organization’s culture.[iv] Theory III attempts to overcome the weaknesses of Theory I and II by arguing that only cultures that allow organizations to recognize and adapt to environmental changes will perform successfully in the long-term.[v]

Leaders, however, often struggle to respond quickly to the rapid rate of change inherent in increasingly globalized organizational contexts. Mergers may be seen as attempts to respond to new market realities. But, the intended benefits of mergers, such as strengthening market share, product offerings, and quality processes, are slowly realized while the new company’s board, employees, and customers awaken to its new cultural reality. Even the most adaptive cultures take time to trickle throughout all sectors of the company and embed themselves within the hearts and habits of all constituents. So, how can today’s organizational leaders possibly drive successful long-term performance without damaging a deliberately long-term process of drawing together into unity the rich diversity of cultural perspectives and expressions among its own constituents?

Why Culture Matters in Organizations

In their research on the common practices of successful, visionary companies, Jim Collins and Jerry Porras, authors of Built to Last: Successful Habits of Visionary Companies, discovered that these companies performed well over the long-term because their leadership focused primarily on building the company rather than on sustaining their products or acquiring visionary leadership qualities.[vi] This research challenges the importance of starting with that “one great idea” accompanied by a well-developed product and marketing strategy, as is often touted in strategic management courses and textbooks. In fact, Collins and Porras found that organizational leaders who began with the “one great idea” often gave up on the company when that idea failed.[vii] Rather, visionary companies understood that the company itself was their greatest creation. Collins and Porras affirm that the great products and services provided by visionary companies emerged from first being outstanding organizations even after years of little entrepreneurial success.[viii]

This implies that the enduring quality of any company is not observed in its repertoire of products and services nor in the profitability derived from those products and services. Even mergers that intend to leverage each company’s assets to strengthen market opportunities do not, in themselves, create sustainable performance. Instead, what made these visionary companies truly outstanding was the cultural impact it had on its constituents and the larger society. Andy Crouch, author of Culture Making: Recovering Our Creative Calling, explains that culture “is what we make of the world” and describes “our relentless, restless human effort to take the world as it is given to us and make something else.”[ix] In this sense, a company’s products and services are merely the artifacts of the creative capacity of an organization's cultural resources – its people, talent, money, opportunities, and influence. A vibrant organizational culture is able to adapt these resources creatively and construct them in such a way that something new emerges to impact and even shape positively the environment in which the organization operates.

All firms have corporate cultures, whether we acknowledge them or not. And these cultures exert influence, whether consciously or unconsciously, on it members and their performance more powerfully than any other factor in an organization’s life, including its strategies, management, financials, and other resources.[x] Research shows that corporate culture has a significant impact on a company’s long-term economic performance and its ability to adopt strategically and tactically to an increasing rate of change.[xi] But what makes culture such a strong driving force of long-term success or failure for organizations? Kotter and Heskett point to the shared values inherent within cultures that tend to persist over time and define what is important to the organization.[xii] Essentially, these values shape the organization's cultural identity. For example, if an organization values innovation, then it will endeavor to associate its brand externally with innovative products and services and will organize its structure and policies internally to encourage and promote innovative practices.

Because of culture’s relentless pull on individuals and organizations to make something new of the world they inhabit, the company’s culture, whether explicit or tacit, is a compelling force that motivates its priorities, behaviors, and structure. Theologian and philosophy professor James K. A. Smith states it this way: "We are what we love, and our love is shaped, primed, and aimed by liturgical practices that take hold of our gut and aim our heart to certain ends…. humans are…embodied, practicing creatures whose love/desire is aimed at something ultimate."[xiii] Individuals and the organizations they make up are motivated and even compelled primarily by love. And love aims for something ultimate – a vision of what makes a good life.[xiv] Humans intend to make of their world in some ultimate sense which becomes embodied in their cultural values, norms, and practices. In the end, as Smith notes, what we love defines who we are.[xv]

Consequently, culture matters because people order their lives and make decisions based on what they love, their vision of the good life, and how they intend to achieve it. Love motivates people to act in certain ways, pursue relationships, take risks, make sacrifices, and enjoy activities for reasons that cannot often be explicitly articulated.[xvi] An organization’s culture, including its values, mission, and vision, allows its constituents to involve and invest themselves in a community that pursues the ultimate aims they desire. Reciprocally, an organization influences and shapes the values and loves of its constituents because it functions as a culturally formative community. Therefore, leadership is well-advised to prioritize cultural formation as an essential aspect of the merged organization’s long-term success. ?

Creating Shared Culture in Mergers

The challenge for leadership of a merged organization, then, is to build a shared culture out of the different cultural worlds of its diverse constituency. But the goal is not to create a homogeneous culture, but rather a heterogenous culture. The advantages that culturally heterogenous teams bring to organizational success outweigh the potential conflict of their inevitable clashes. According to researchers Mary Maloney and Mary Zellmer-Bruhn, the diversity of perspectives, knowledge, and expressions embedded in culturally heterogenous teams seed creativity in product development, responsiveness toward global markets, and discovery of talent within the organization’s global ranks.[xvii] So how can organizational leaders tap into the rich benefits of their own cultural diversity while still building a shared culture that fuels organizational sustainability and success?

Unfortunately, much of what has been researched and written about culture within multicultural contexts has been contrastive in nature, focusing on “us versus them” value differences of cultures.[xviii] The implication of this research, and arguably its weakness, is that organizational leaders merely need to understand the different cultural values and behaviors of their various constituents and act accordingly. However, while a deepening awareness of and appreciation for different cultures is valuable, leaders of mergers will find their capacity overstretched within an expectation to be all things to all people.

Instead, Maloney and Zellmer-Bruhn propose that the essential task of organizational leaders involves creating socially integrated environments where team members may focus on the organization’s grander identity while minimizing categorical differences between themselves.[xix] Heterogeneity may initially threaten team members because it shakes up how members understand their own identity and how they construe the identity of the team. To compensate, members will make assumptions of others’ motives, expectations, and value-of-input based upon their stereotypes of larger categories.[xx] For example, the engineering department may assume that the production department prefers practicality to innovation, so their respective cultures clash over product design and functionality. Organizations in mergers will, most likely, hold categorical assumptions of each other that will ultimately lead to culture clashes. This usually results in a general hardening of one group against the contributions of others.[xxi]

Combatting this toxicity within teams requires leaders to foster shared culture by developing a superordinate group identity, one that rises above categorizations of others. Authors Noel Tichy and Warren Bennis indicate that a group identity forges a storyline that expresses the ultimate hopes and desires of the group.[xxii] Teams that take valuable experiences and knowledge and weave them into a new narrative of its future success that is emotive, compelling, and able to be taught to and practices by it members will form a shared organizational culture.[xxiii] That story must be internalized by all members of the team in order to build collaboration, guide priorities and behaviors, and enhance strong judgment in decision-making. The story essentially becomes embedded in the organization’s espoused values, and thus, accepted and shared by all team members through the organization's structure and culture to actively foster those values.[xxiv]

But merely emphasizing shared qualities while minimizing individual qualities will endanger the expression of the unique cultural values and perspectives that profoundly enhance teamwork. Instead, organizational leaders must create an environment of mutual trust and openness to the unique contributions that other members bring.[xxv] Social integration processes built into multicultural team dynamics bridge the fault lines along categorical boundaries and create safety for interpersonal risk-taking and self-disclosure.[xxvi] In such a safe space, teams may extract the rich value from each members’ knowledge and perspectives and infuse that value into their emerging shared culture.[xxvii]

Building social integration in multicultural environments, though, will demand much more of leaders than traditional theories and forms of leadership can support. In fact, the foundation on which most leadership theory develops, that in which leaders exert influence on followers to accomplish goals, will impose severe limitations on leadership practices in increasing collaborative, heterogenous environments.[xxviii] In homogenous contexts, team members understand their shared work from within a similar worldview so that leaders need only to distribute that shared work equitably. However, members of heterogenous teams make sense of their shared work from differing worldviews, each of which is equally valid as the others.[xxix] In these contexts, leadership must create social integration (which fosters a new culture) with relational dialogue. Relational dialogue gives equal voice to the different, and often differing, cultural perspectives of all team members in the effort to construct a shared meaning of reality.[xxx] This shared meaning empowers the team to imagine creatively how it can accomplish it shared task. Essentially, through day-to-day interactions in thought, word, and actions, leaders and team members construct a new culture that redefines what is important, worthy, real, and actual.[xxxi] As they do, they are able to make sense of the shared work they must perform in order to set direction, create commitment, and face adaptive challenges to accomplish that work.[xxxii]

Collaboration is the Key

Strong leadership is essential to create shared culture within a merged organization. If top leaders are not convinced of culture’s importance, and therefore, do not steward their power and influence to move people toward one another in an emerging shared culture, then culture clashes will inevitably threaten the organization’s adaptability to new organizational environments. Research indicates that leaders who successfully create an adaptive culture do so through encouraging organization-wide buy-in to a set of timeless values that stress both development of effective leadership along with meeting constituent needs within any context.[xxxiii] Accordingly, the leaders most effective at leading efforts to build an adaptive culture focus on building collaborative environments from which adaptive leadership emerges.

Because shared culture arises when diverse team members relate to one another within a safe space marked by trust, respect, and openness to different perspectives, building collaboration in teamwork is critical. When such team functions well, they create an atmosphere of energy, creativity, and shared purpose.[xxxiv] Leaders that intentionally build collaborative teams throughout the merged organization consequently inspire emerging leadership within its own ranks. But collaboration thrives not by formal appointment of individual leaders based on their ability to lead and influence others. Instead, collaboration thrives in environments where homegrown leadership that inspires direction, alignment, and commitment to shared goals among diverse team members grows organically.[xxxv] While training individuals appointed to formal leadership positions may be necessary to equip them with the tools of leadership, such training may do little to develop a culture of leadership that fosters cross-culture learning and character formation.

An effective strategy for building collaborative environments in which leadership emerges is to institute intentional intercultural and cross-departmental teams assigned to accomplish shared work goals. Such teams become incubators because they open to their members “thought world windows” that they would not otherwise experience. These thought world windows enable members to move past the difficulty of hearing different thoughts or ideas in order to receive insights, knowledge, and information from others to help them shape together the shared work, goals, and norms of the group.[xxxvi]

Leaders that emerge from a heterogenous, collaborative process become the champions of cultural change during the upheaval of a merger. Essentially, they create the shared social reality that forces team members to explore their tacit assumptions of others as well as their own contributions. They encourage team members to appreciate and engage with different cultural perspectives with a view toward determining desired values of the new organization.[xxxvii] They identify and constructively confront currently embedded cultural values that prohibit the new organization from realizing a new vision of a preferred future.[xxxviii] Their leadership is formed out of first-hand experiences in cross-cultural team dynamics, including formation of group norms, solving problems, resolving conflict, creating and executing a plan, and evaluating the team’s effectiveness. These are the homegrown leaders with the capacity to navigate the traumatic disorder of a merger and lead a cultural integration process that helps team members let go of the past, redefine their shared work according to new cultural values, and look ahead to the future.

Summary

Collaboration allows a newly merged organization to promote a shared culture that is adaptive to the changing environments which initially prompted the merger. A collaborative culture extracts the value from the cultural uniqueness of its heterogeneous team members – their knowledge, worldviews, and ways of working – to produce adaptive leadership that is ready and responsive to diverse business environments. Studies show that such cultures are associated with superior performance over long periods of time.[xxxix] They are open to new business innovations applicable to changing circumstances; they value personal growth and development; and they create environments where people feel free to share ideas, try new approaches, and learn from failures.[xl] Ultimately, instilling the value of and establishing a platform for actual cross-organizational collaborative experiences will develop homegrown leadership capable of creating the shared culture necessary to realize the organization’s new vision of success.

Footnotes

[i] Michelle C. Blight, “Surviving Post-merger ‘Culture Clash’: Can Cultural Leadership Lessen the Casualties?” Leadership 2 (no. 4): 395.

[ii] John P. Kotter & James L. Heskett, Corporate Culture and Performance (New York: The Free Press, 1992), Kindle edition, 188-431.

[iii] Ibid. p. 433-693.

[iv] Ibid.

[v] Ibid. p. 697-940.

[vi] Jim Collins & Jerry I. Porras, Built to Last: Successful Habits of Visionary Companies (New York: Harper Business, 1994), 22-31.

[vii] Ibid. p. 27-28

[viii] Ibid. p. 28

[ix] Andy Crouch, Culture Making: Recovering Our Creative Calling (Downers Grove: InterVarsity Press, 2009), Kindle edition, 23.

[x] Kotter & Heskett, Corporate Culture, 132.

[xi] Ibid. p. 168-176.

[xii] Ibid. p. 55-64.

[xiii] James K. A. Smith, Desiring the Kingdom: Worship, Worldview, and Cultural Formation (Grand Rapids: Baker Academic, 2009), Kindle edition, 615.

[xiv] Ibid. p. 370

[xv] Smith, Desiring the Kingdom, 805

[xvi] Ibid. p. 826

[xvii] Mary M. Maloney & Mary Zellmer-Bruhn, “Building Bridges, Windows, and Cultures: Mediating Mechanisms between Team Heterogeneity and Performance in Global Teams,” Management International Review 46, (no. 6): 699-700.

[xviii] Peter van Gelder, “Cultural Differences and Improving Performance: How Values and Beliefs Influence Organizational Performance,” Cross Cultural Management: An International Journal 18, (no. 4): 1.

[xix] Maloney & Zellmer-Bruhn, Management International Review, 702.

[xx] Ibid.

[xxi] Ibid.

[xxii] Noel M. Tichy & Warren G. Bennis, Judgment: How Winning Leaders Make Great Calls (New York: Penguin Group, 2007), 50-53.

[xxiii] Ibid.

[xxiv] Antonio Argandona, “Fostering values in organizations,” Journal of Business Ethics 45 (June 2003): 21.

[xxv] Maloney and Zellmer-Bruhn, Management International Review, 703.

[xxvi] Ibid. p. 708.

[xxvii] Ibid. p. 704-708

[xxviii] Wilfred H. Drath, Cynthia D. McCauley, Charles J. Palus, Ellen Van Velsor, Patricia M. G. O’Connor, and John B. McGuire, “Direction, alignment, commitment: Toward a more integrative ontology of leadership,” The Leadership Quarterly 19 (2008): 636.

[xxix] Wilfred H. Drath, The Deep Blue Sea: Rethinking the Source of Leadership (San Francisco: Jossey-Bass, 2001), Kindle edition, 1462-1587.

[xxx] Ibid. p. 1587

[xxxi] Ibid.

[xxxii] Ibid. p. 1544

[xxxiii] Kotter & Heskett, Corporate Culture, 908.

[xxxiv] Anne M. A. Sergeant, “Success Through Strong Culture,” Strategic Finance (February 2018): 22.

[xxxv] Drath et al., The Leadership Quarterly, 650.

[xxxvi] Maloney & Zellmer-Bruhn, Management International Review, 712.

[xxxvii] Mohammad Essawi, “Changing Organizational Culture Through Constructive Confrontation of Values,” Journal of Organisation & Human Behaviour 1 (no. 2): 2012, 48.

[xxxviii] Ibid.

[xxxix] Kotter & Heskett, Corporate Culture, 697.

[xl] Sergeant, Strategic Finance, 22.