Why cultural fit matters in mergers and acquisitions

When mergers and acquisitions succeed, they create momentum, value, and opportunity. When they fail, they can stall growth, erode trust, and destroy value. One of the most consistent reasons for failure is not strategy, market logic, or financial modelling - it is culture.  

All too often, cultural fit is considered too late, or not at all, when assessing acquisition targets. Yet it is culture that determines how well two organisations, and the people that make them up, will work together. 

One of the reasons that culture is not typically part of the due diligence process is that it is still perceived by some executives as “soft stuff.” Leaders often find it hard to see how culture is a key differentiator, but also how it can be assessed, measured, and managed.  

What is workplace culture? 

Culture is the patterns of behaviour that are encouraged, discouraged, and tolerated by people and systems over time. It shows up in how decisions are made, how people lead, and how we show what we really value, interaction by interaction, choice by choice. 

It lives and gains power in the stories people tell in organisations, the ‘folkore’ that builds through time. It shows up in the rituals of an organisation. And it is reinforced through processes and systems, which might encourage the behaviour you want, or which might completely undermine it. 

When two cultures are brought together without clarity and care, it can create friction. Disengaged talent, loss of key leaders, and slow or failed integration are typical, but just the tip of the iceberg. 

That is why assessing cultural fit up front and planning for cultural alignment post-merger is as important as due diligence on financials or operations. It can easily be the difference between an integration that unlocks value and one that drains it. 

How to map your organisational culture 

 To support organisations who are on this journey, we use our Culture Impact framework to map and understand organisational cultures. This involves: 

• Surveying employees to capture perceptions of how culture is experienced within each organisation - the existing primary culture focus, the health of five key ‘culture catalysts’, and how culture is driven and supported by values, attitudes, and behaviours. 

• Interviewing leaders to understand intent, priorities, and the unwritten rules that drive behaviour. To really understand their views on each organisation’s cultural strengths and aspirations, and to hear their integration concerns and thoughts on potential friction points. 

• Facilitating discovery groups that surface lived experiences, stories, and what really matters to people. This is where you learn the ‘how’ and ‘why’ behind the ‘what’ of survey data. 

Through this process, two vital insights emerge. First, the strengths and uniqueness of each company - what must be protected and retained because it is part of the organisation’s identity and a source of advantage. Second, the areas that must change, including behaviours, habits, or assumptions that could undermine integration if left unchecked. 

From mapping to alignment 

Mapping culture is not an academic exercise; it is a practical guide for leaders. With the evidence in hand, you can create a Culture Integration Plan. This plan sets out your roadmap to a future-fit culture for the new organisation. Typically, this will contain: 

• Non-negotiables to preserve - the values, practices and cultural “signatures” that form each organisation’s DNA and which must be retained at all costs. 

• Behaviours to evolve - the specific habits leaders and teams need to adopt or leave behind to work effectively together. What will you encourage, discourage and role-model in the new culture? 

• Symbols to refresh - from leadership messages to physical spaces, rituals and language. Symbols are the visible signs that tell people loud and clear, “this is who we are now.” 

• Systems to align - such as performance management, decision-making processes and ways of recognising success. They must all reinforce the culture you want to create, rather than pull against it. 

Your Culture Plan becomes a living framework, guiding leaders in both the integration phase and beyond. It helps prevent the drift into “us versus them” mindsets and ensures that decisions about people, processes and priorities are consistent with your desired culture. 

Why it matters 

Organisations that succeed in M&A treat culture as a strategic asset, not an afterthought. They know that value comes not only from market share or efficiencies but from the energy, innovation, and trust that people bring when they feel part of a coherent, aligned whole. By paying attention to culture early and deliberately, leaders can avoid the pitfalls that derail so many deals and instead create the conditions for sustainable success and high performance. 

Like it or not, culture will shape the lived reality of a merger. The question is whether leaders choose to shape it intentionally or leave it to chance. 

See the culture work in action  

Join us for a session with CIPD Aberdeen to understand how we dive deeper to get an understanding of the behaviours shaping workplace culture and how we roll out a roadmap for change. Secure your place.

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