How come I didn’t see that our cultures were as different as chalk and cheese?

Dear Aunty B,

I have been in a joint venture with another company for 12 months.

It was a mistake from the beginning as they have a completely different culture than ours that is focused on fun (that’s what they say!) not making money.

I call it the chalk and cheese comparison. They believe that if they like doing what they do they will keep growing. That’s worked for them so far but that doesn’t work for us as we are a highly targeted company with a three-year plan and everyone wired into those goals. (We are the chalk.)

Two questions: Do we unwind the joint venture slowly or is it better to just cut it off? And, second, why did I get it so wrong? When we did due diligence we asked so many questions yet none caused us to think we would have this culture clash!

Over it,

Brighton

 

Dear Over it,

I bet you didn’t really realise that your culture was built on financial goals and discipline until you went into business with the fun brigade.

You probably thought you were the minister of fun at your joint until you met the real King of Fun and then had your culture redefined for you in a way which made you see your company and culture in a completely different light.

And that is what is so hard about acquisitions, joint ventures or indeed even working with others. At times, it is only the reflection of others that makes you clearly see who you are.

The other problem of course is that when you are doing a deal, you want to look for the areas of synergy. Optimistic entrepreneurs who are problem solvers will look at a deal for the positive outcomes. There are so many things to tick off and it is easy to assume that a culture of a company that looks like yours, smells like yours and acts like yours is the same.

But cultures are like families. They can look the same from the outside but, boy, can they be different when everyone is in the kitchen.

What we need is psychological testing on cultures the way we test potential employees. Bar that, you need lots of probing conversations, not just with the head of the business but the leadership as well.

These are the type of questions you should be asking. What are the things that really matter to you when green lighting a new project? How do you measure success? Who comes first, employees or customers? How do you run your board meetings? What KPIs do you set? What do you deem success?

And so on. As to whether you unwind slowly or fast? It’s hard to tell. But be aware. Think of the work that went into building the synergies. Think of the time it took. It will take that time again and probably more to unwind.

And one thing I promise you: you will underestimate the impact on your business. So think very carefully about how you are going to do it.

Be smart,

Your Aunty B

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