Common Values, Not Cultures, Is Key to Merger Success

Source: CPA Practice Management Forum

Over the past 18 months, there's been a flurry of M&A activity in the CPA community, and author Jay Nisberg predicts this activity will continue for at least another 18 months. According to Nisberg, the six most common reasons for merging are:

1. Developing a succession plan
2. Filling a leadership void
3. Creating an exit strategy
4. Finding quality people (although this reason is less valid today than it was a few years ago)
5. Improving realization, collections, and accounts receivable
6. Achieving long-term financial security

Although many firms contemplating a merger emphasize the importance of "common cultures," Nisberg believes this "may be an unattainable goal, at least at the beginning of the merger process" because culture is so hard to define and is difficult, if not impossible, to change. "The true ingredient of success," Nisberg advises, "is not common culture, it is common values."

Within one firm, cultures can vary between office locations, departments, or even different floors in the same building. So finding two firms with common cultures may be elusive. Common values, Nisberg says, will lead to greater merger success and may help create a common culture over time.

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From CPA Practice Management Forum, CCH Incorporated, 800-449-8114, April 2010, p. 10, "2009-2010-2011: Merger Mania."