Building a Culture: From Declarations to Actions After Mergers

When organizations merge, the alignment of their cultures is crucial for long-term success. A recent example is Nuveen's $13.1 billion acquisition of Schroders, a historic British asset manager. At the core of this transaction is the need to effectively merge different corporate cultures, which often proves more intricate than merely announcing a new cultural vision.

The Challenge of Culture Declarations

Many leaders face a common pitfall when merging entities: they rush to declare a new culture without laying out the necessary groundwork for what that actually entails. CEO Bill Huffman of Nuveen, reflecting on his experiences with numerous acquisitions, emphasizes that rather than dictating a vision, the initial focus should be on listening and understanding the other organization.

However, simply declaring phrases such as, “We prioritize customer satisfaction” or “We collaborate as a unified team” often leads to confusion. Different members of the team interpret these statements in varied ways. For instance:

• A member of Nuveen's operations team may interpret “listen and learn” as a signal to delay integration efforts.
• A Schroders portfolio manager might see this principle as signifying no expected changes.
• A finance director may dismiss it as an empty corporate line that does not influence financial decision-making.

The Translation Gap in Culture

This disconnect directly illustrates what can be termed the Translation Gap. Strategic goals set at the corporate level often struggle with execution on the ground. What leaders conceive is not always what employees understand or practice.

For meaningful cultural integration, leaders must translate high-level ideals into practical, observable behaviors. Without such clarity, employees may revert to established routines that can hinder integration efforts. Therefore, it is essential to address several key questions:

• When faced with varying processes, should teams adopt the old practices, analyze them, or create new ones?
• Who is responsible for justifying changes when differing methods clash?
• What actions define “listening” in different business scenarios?
• What should occur if someone highlights a concern about existing practices?

Translating Culture into Actionable Steps

Transforming declarations into a living culture requires a structured approach. By first establishing a core guiding principle and translating that into fundamental commitments, organizations can create a framework for actionable behaviors.

For instance, one might take Huffman's idea of “assume the other side knows something we don’t” and break it down into tangible actions:

• Encourage team members to inquire about how existing processes function before suggesting alterations, ensuring valuable practices are retained.
• Monthly, highlight one effective practice from the acquired firm that surpasses current operations, fostering a shared learning environment.

Maximizing the Transition Period

The initial 12 to 18 months of integration represent a critical window for both Nuveen and Schroders. While keeping the two companies operationally separate can safeguard interests, it doesn’t inherently teach teams how to work in conjunction. Defining collective behaviors prior to merging ensures a cohesive understanding as the organization evolves.

This period presents a unique opportunity for leaders and team members from both sides to collaborate and clarify what concepts like “listen and learn” mean in their specific contexts. By actively testing and refining these actions together, both organizations can build a strong, unified culture based on mutual respect and clarity.

From Vision to Reality

Huffman’s proactive mindset demonstrates an understanding of the value brought by the acquired company, a rare perspective among many CEOs. However, it’s essential to move beyond simple affirmations of cultural vision. Real cultural integration goes beyond declarations; it requires actionable mindsets and behaviors that employees can seamlessly adopt in their daily tasks.

To foster true cultural alignment, organizations must prioritize defining what those behaviors look like and how each employee can integrate them into their work. This transformation from mere statements to genuine culture is key to a successful merger process and sustained organizational health.