How many of you are involved in organizations or businesses considering mergers? Recently I was at the Farm Credit Learning Conference in Philadelphia where one of the speakers provided plenty of perspective.

Businesses, divisions, or departments that merge usually do so for three reasons. First there must be a financial fit, second a business fit, and finally a cultural fit. Organizations do very well and conduct due diligence on the first two. However, the most critical area is the cultural fit.

An astounding 70 percent of mergers are perceived to be a failure by participants’ expectations. Seventy percent of these perceived failures are because the cultural expectations fail to align. For example, the recent merger between AOL and Time Warner was a disaster because of the cultural fit.

What is culture? It is the beliefs and values of the unit and the assumptions of how we behave, i.e. "this is how we do things here." These soft issues are frequently why family farms, cooperatives and school boards have difficulty. Sometimes the soft issues become the hard stuff.

Performance Feedback

If you are down in the dumps about your farm or agribusiness’ performance, your approach can have a big impact on future performance. For example, if you examine the things that went wrong and develop the right way to approach these issues, performance improved 10 percent over time.

However, when analyzing a situation, if you focus on what went right and how you could improve those things that went wrong, the performance over time increased 80 percent. How frequently do farm and ranch families beat themselves up on failure rather than stepping back and examining what they do well and improving?

It’s always fun listening to other speakers and gaining perspective.

What’s Going On

This week I’ll be heading out to Kansas for some small business seminars and catching up on work here in Blacksburg, as well.

My e-mail address is:sullylab@vt.edu

Editors' note: Dave Kohl, The Corn and Soybean Digest Trends Editor, is an ag economist at Virginia Tech. He recently completed a sabbatical working with the Royal Bank of Canada. He is now back at Virginia Tech with his academic appointment, which is teaching, extension, and applied research.

To see Dave Kohl's previous road warrior adventures type Dave Kohl in the Search blank at the top of the page.

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