Culture Eats M&A for Breakfast: Why Aligning Values is Non-Negotiable
Culture. It’s one of those buzzwords that gets thrown around in every workplace conversation, especially as companies grapple with attracting and retaining top talent in a competitive job market. But what does culture really mean? Is it just the inspirational slogans on the wall, the weekly team-building activities, or the foosball table in the breakroom? Spoiler alert: it’s none of those things—at least not entirely.
At its core, culture is the shared values, beliefs, and behaviors that shape how people work within an organization. It’s about what your company values, how those values influence beliefs, and ultimately, how those beliefs translate into behavior. Do you value customer service? Innovation? Safety? Do employees share beliefs about work-life balance or meritocracy? And how do these priorities show up in day-to-day actions, like giving feedback, celebrating successes, or even how meetings are run?
Culture can feel elusive because so much of it is unwritten. It’s the “personality” of an organization, often understood only through experience. Imagine being the new person in a company. No one hands you a guidebook titled “How We Really Operate Here.” Instead, you pick up on cues—who speaks up in meetings, whether people answer emails at 10 p.m., or how leaders react when something goes wrong. These unwritten rules tell you more about the culture than any handbook ever could.
Understanding the Layers of Culture
To really understand culture, it helps to think about it in layers. Edgar Schein, a renowned organizational psychologist, offered a helpful framework. He described culture as having three levels:
- Artifacts and Behaviors: These are the visible aspects of culture. Think dress codes, office layout, communication styles, or even the foosball table. They’re easy to spot but only scratch the surface.
- Espoused Values: These are the stated values and beliefs—things like mission statements, company policies, or the leadership’s declared priorities. They provide clues about what the organization says it values.
- Basic Assumptions: This is where the real action happens. Basic assumptions are the deeply ingrained beliefs and behaviors that are so natural to employees they often go unnoticed. They shape how people think, feel, and act—making them the hardest (but most important) aspect to uncover.
When Culture Gets Noticed
One fascinating thing about culture is how often it flies under the radar—until something goes wrong. Schein likened culture to the roots of a tree, quietly shaping everything above ground. You only notice the roots when something disrupts the tree’s stability. Similarly, organizational culture becomes glaringly obvious during times of friction, such as during a merger, when new leadership takes over, or when a hire doesn’t fit in.
This is especially critical in mergers and acquisitions (M&A), where two distinct cultures must come together. Often, companies focus heavily on financial and operational due diligence, but cultural compatibility gets overlooked. The result? One company’s deeply rooted assumptions clash with another’s, causing friction that can derail the entire integration process. For example, if one company thrives on a fast-paced, results-driven culture and the other values collaboration and stability, those differences will create tension—unless they’re addressed early on.
It’s Not Just About Ping-Pong Tables
One of the most common mistakes companies make is confusing perks with culture. As I heard at a recent conference, someone quipped, “How could anyone leave us? We have a ping-pong table!” Culture isn’t about perks. It’s about shared values, behaviors, and trust. A foosball table might be a fun artifact of a laid-back culture, but it can’t replace the deeper, more meaningful elements that define how people work together.
Why Culture Matters—Especially in M&A
Culture isn’t a “nice-to-have.” It’s the invisible force that shapes everything from how teams collaborate to how leaders make decisions. In M&A, this invisible force often determines success or failure. Studies suggest that cultural misalignment contributes to nearly 30% of failed mergers and acquisitions. That’s because while legal and financial agreements are straightforward, culture operates in the background, influencing everything from employee retention to customer satisfaction.
If you’re not assessing cultural fit during an acquisition, it’s like walking into traffic with your eyes closed—you’re asking for trouble. Companies must dig deep, asking questions like: What makes us unique? What do we value most? What cultural elements are non-negotiable? Only by understanding your own culture and the culture of the organization you’re merging with can you craft a roadmap for integration.
Culture isn’t just about what you say—it’s what you do. And in M&A, what you do about culture could be the difference between seamless integration and a costly failure.
*This blog is part of a three-part series exploring the critical role of culture in organizational success. While this installment focuses on the importance of aligning values in M&A, the next blogs address the importance of cultural due diligence and two widely used frameworks for analyzing culture. Stay tuned for the full series to gain a holistic understanding of how culture shapes your organization and drives sustainable success. To learn more about workplace culture and how it affects M&A's, please contact our organizational development specialists.
Article Contributed by Gary Kustis, Ph.D.
