Do the work

In my work I have had the opportunity to work with CEO's who are growing emerging small and medium size businesses. These are talented entrepreneurs who understand their markets, their customers and have engaged their people. Each has created a unique culture - a set of values that underpin the behaviours that define how they do business. The most successful of these understand that culture and financial performance are opposite sides of the same coin. They manage their business risk managing their culture.

Home Hardware is a company that was in the news recently. They are in the highly competitive hardware and home improvement products market competing against Home Depot, Lowe's, and Canadian Tire Corporation. The hardware and home improvement products market is big business. Home Depot, Lowe's, Canadian Tire, and Home Hardware combine for over 1,500 stores and over $22B in sales. Recently Lowe's acquired Rona Inc. a Quebec based hardware and home improvements company. Home Hardware's CEO, Terry Davis, said this about the acquisition of Rona by Lowe's.

"You are going to have a culture clash when the majority of the company you belong to is owned by somebody with a corporation mindset where the control comes from far away, not your office at the back of the store".

Whether Lowe's can successfully integrate Rona is yet to be seen but the impact on culture can not be minimized. The Harvard Business Review reports that the failure rate of mergers and acquisitions sits between 70 -90%. Why? Too many business leaders assume the environment will continue to evolve as it has. It doesn't. Most buyers routinely undervalue the impact of culture on financial performance.

Whether you are growing organically, merging, and acquiring for scale you have to do the work of understanding the culture. Engage the business leaders not only in what people do, but why they do it. If you can unlock the why then you will understand the how. That's the real work.