For those of you who attended our recent executive breakfast on transactions and due diligence here is an extension of our discussion on the importance of corporate culture. For those of you just now tuning in, our discussion centered on, among other things, the importance of culture. Several examples from personal experiences with transactions were discussed where the value of a transaction was severely impaired due to cultural considerations. In one case, the buying company did not have the reverence for customers that the purchased company did. In another, a professional services firm acquisition failed to take into account differences between the all-for-one culture of a partnership and the internally competitive culture of a public company.
Culture, the interaction of a company’s leadership, management and employees with each other, suppliers and customers, is paramount. It trumps strategy. A team which knows how to dominate a market, but cannot work together with trust and enthusiasm might as well not know. BUT a tight knit underdog team not only can, but routinely will beat an alienated group which temporarily leads its market. Famous examples include the original Apple Macintosh development team, George Washington and his rag-tag band of rebels, the combined crew and ground support team of Apollo 13 and the 1980 American Olympic Hockey team, a bunch of amateurs and collegiate players who beat the Soviet team that had dominated Olympic hockey since 1954.
More on this very deep topic after the jump on this Harvard Business Review Blog.