“Survey after survey will point to up 90 per cent of mergers failing and it doesn’t have to be that way. The trouble is that so much of the focus is on the work up front with legal and finance, without there being a sense of how things are actually going to be brought together. That’s what’s missing so often and it still amazes me.”

For Tim Morton, president of Prompta Consulting, Canada’s first diversity-certified consulting group, the business of mergers and change management has always been personal. He was part of a culture that was being destroyed at the beginning of his career in the mid-90s—and has helped countless others around the world since.

RA-RA-RA (and The Inevitable Failure)

“It’s a big part of why and how I do what I do today. The first transformation I was on there was a lot of Ra, Ra, Ra from the leaders—‘this was going to be amazing.’ They painted the vision of what we were going to be—and then they sent consultants to do the work,” said Tim. “But the business wasn’t involved or included. We weren’t engaged for input and, as a result, they didn’t understand what we were doing or how we were doing it. It was a huge failure.”

What stands out for him though is not his experience, but the larger impact. “Our business suppliers, our partners, our customers—we let them down,” he said. “Then all those great people we were working with started to leave and it was time to go. My thought was then—it doesn’t have have to be like this.”

As the driving force of Prompta—which translates to ‘readiness’ in Latin—Tim helps companies bridge that gap with an approach that puts a priority on the soft tissue of people, while applying proprietary survey technologies to helps leaders quantify the commerce of culture.

“This is why we help clients think of mergers as a culture change journey. You’re coming in with two cultures and they are never similar. You have different leadership styles, different ways you interact with the customers, different roles. You just have a different history,” said Tim. “And so, to say on day or week one—look at our great culture—it just becomes a bit of a sad joke.”

“What is so sad is that a lot of that a lot of that wonderful value that gets created—the culture and all those ways of working—they can get thrown out the window,” said Tim. “We even see cases where instead of creating value through these deals, we see value being dismissed. It’s actually destroying the value in a lot of cases.”

Hard Numbers on the Soft Tissue of Success

Keeping and creating that value is key to his ongoing efforts.

Facilitating that change in a language that everyone in merging organizations can relate to, Tim and his Prompta team utilize a Readiness for Success program that puts a focus on the soft tissue of mergers—and provides leaders the hard numbers they need. The six pillars of the program—Vision, Success Criteria, Leadership, Operations, Culture and Capabilities—are all integral to smooth mergers and success alike.

Thanks to the company’s use of Natural Language Processing (NLP) and Predictive Analytics Platform (Prompta AI), leaders can now see the hard figures around the soft tissue and human issues in their companies.

“Essentially, we help them understand culture as the way you get things done,” said Tim. Through presentation, survey and machine learning techniques, Prompta AI helps organizations see the stress points in those pillars and address the changes before the failures become critical.

No Slam Dunks in Complex Change

The biggest pitfall of all for merging companies is assumption. ‘We’ve got this’—are words Tim hears too often.

“Too often leaders don’t know they have a role in merging cultures. They look to experts and abdicate that role because they were convinced by somebody else ‘we’ve got this covered,’”said Tim. “On the other hand, we’ve had some tremendous successes because the leaders were engaged, and they were sponsoring. They were active and visibly showing that vision forward.”

He recounts a recent client conversation that goes to the heart of the issue of too many mergers.

“There are some leaders who just think it’s going to be a slam dunk. It’s a merger of equals with what they think are similar cultures that have gone through change before,” Tim said. “Sure, Covid gave us plenty of experience with change, but that was 911-change, get everybody off the plane as fast as we can—a merger is more complex. It’s all about asking how do we get them back on? And how do we get them on one plane when they were on two planes before—and what do we do when they haven’t been on for 18 months?”

Culture not a Tick-the-Box Exercise

And while Tim recognizes that some companies are created and developed to eventually sell and merge, he points to the continued failure rates and the all too common pitfalls across industries—even when both companies want to “make it happen.”

“Cultures are too often assumed to be similar and that happens to often close the deal. They’ll point to the fact that they share ‘trust’ as a value, for example, but trust is very different between every organization—it evolves over time from your ways or working and ways of being.”

He relates a story from the other end of the spectrum when he was brought following a merger stalled by too literal an interpretation of merging cultures. “Part of the problem was that they planned a one-week retreat at the end of the deal closing in order to merge the cultures together,” said Tim. “Unfortunately, it really is a journey to merge cultures—not an event.

”You can’t just wake up and say, here’s our values today—I’m going to put these on our website and on our wall,” said Tim. “If you don’t really dig deep into your culture, it’s just a tick the box exercise. If you don’t address the change around how people work together or integrate, how they operate, how leaders treat one another or how hire and onboard, nothing has actually changed.”

A Final Word: On Choices and Voices

Other, less pleasant changes will inevitably follow. These day, Tim stresses, the talent poachers are often at the cyber door even before the employees are thinking to look elsewhere in a merger scenario.

“People have choices and it’s not just about the dollars anymore. It’s about what environment they want to work in, what the company really stands for and if they can go out with their friends and be proud of the organization they’re with” said Tim. “That’s the essential part. Is your company one that values diversity, equity and inclusion? Do leaders treat everyone with the same level of respect? Does everyone within the organization have a voice?

Anchoring those aspects and being that leader, Tim adds, will always pay dividends, but is absolutely integral when leading teams through a merger.