Culture implications matter in mergers and acquisitions

zip-it-up-1108601-sA recent HBR article on the post-merger rebranding of two Latin American airlines — Avianca and TACA – made us sit up and take notice. Yes, the new red and grey uniforms and freshly painted aircraft were striking. The ad campaign was slick. But isn’t that what we expect from a major commercial company?

What really intrigued us wasn’t the re-brand, but the fact that it had been 3 years since Avianca acquired TACA. Three years of maintaining and paying for two brands in the market. That’s unusual.

Fabio Villegas, CEO of Avianca Holdings, explained his decision to wait as a once-in-a-lifetime opportunity. “We decided to unify the vision, culture, and operations of the two organizations prior to launching a single brand. It was a difficult decision; another leader might well have believed that a new, aspirational identity would help the integration along. But we wanted to launch with complete credibility; we did not want our branding to strike customers as a mismatch with what they actually experienced. Even more important, I wanted our 18,000 employees to get beyond their differing backgrounds and the separate cultures represented in the new Avianca and feel part of one “multi-Latina” family. Yes, the decision to merge was a strategic one, but I knew that making it work was a human challenge.”

We couldn’t agree more. When two cultures merge it takes a measured, strategic approach to ensure the new whole is greater than the sum of its parts. Rushing and forcing it can lead to inauthenticity – which won’t feel engaging – to employees or customers. In fact, companies often acquire others for the talent and customers. Without thoughtful culture integration and change management, often those very key people can feel left out in the cold and displaced after the acquisition dust settles.

We believe that Villegas’ efforts to unify the combined workforce around the best of both cultures will pay off with higher employee engagement and a better brand experience, which numerous studies show leads to better profitability and performance.

At Harmony Crew we call that smart business.

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