achieving post-merger success. copyright © 2004 by john wiley & sons, inc. reproduced by...

Achieving Post-Merger Success. Copyright © 2004 by John Wiley & Sons, Inc. Reproduced by permission of Pfeiffer, an Imprint of Wiley. www.pfeiffer.com

Chapter Summaries

Achieving Post-Merger Success:A Stakeholder’s Guide to Cultural Due Diligence, Assessment, And

Integration

J. Robert CarletonClaude Lineberry

2Achieving Post-Merger Success. Copyright © 2004 by John Wiley & Sons, Inc. Reproduced by permission of Pfeiffer, an Imprint of Wiley. www.pfeiffer.com

Cultural Assessment and Integration Flowchart


Presentation Contents

PART 1: MERGERS, ACQUISITIONS, AND ORGANIZATIONAL EFFECTIVENESS

1. MERGERS, ACQUISITIONS, AND ORGANIZATIONAL CULTURE

2. THE ORGANIZATION AS A SYSTEM

3. ORGANIZATIONAL SYSTEM ALIGNMENT

PART 2: CULTURAL DUE DILIGENCE AND ASSESSMENT

4. OVERVIEW OF CULTURAL DUE DILIGENCE

5. PERFORMING CULTURAL DUE DILIGENCE

PART 3: CULTURAL ALIGNMENT AND INTEGRATION

6. ALIGNING AND INTEGRATING THE EXECUTIVE GROUP

7. ALIGNING THE MANAGEMENT GROUP

8. ALIGNING THE TOTAL ORGANIZATION

9. SUCCESS MEASURES

10. SUMMARY AND CONCLUSION


Part 1Mergers, Acquisitions, and Organizational

Effectiveness

CHAPTERS

1. MERGERS, ACQUISITIONS, AND ORGANIZATIONAL CULTURE

2. THE ORGANIZATION AS A SYSTEM

3. ORGANIZATIONAL SYSTEM ALIGNMENT


Chapter One

MERGERS, ACQUISITIONS, AND ORGANIZATIONAL CULTURE


Chapter OneMergers, Acquisitions, and Organizational

Culture

Introduction• The pace of mergers and acquisitions

around the globe is increasing.• Forming alliances – mergers, acquisitions,

alliances, etc., is the growth strategy of choice for large and small companies.



Culture

The M&A Report Card• The failure rate of M&As is unreasonable,

unacceptable, and unnecessary.• Between 1965 and 1997, some 55-77%

of M&As failed to deliver their anticipated results.



Culture

M&A Failure Costs• Average 3% loss of equity• Loss of external focus• Low staff motivation and morale• Loss of key executives and staff• Loss of brand focus• Decreased customer satisfaction



Culture

Why Mergers and Acquisitions Really Fail• Culture clash is primary cause

What is generally done about it• Little or nothing at all



Culture

Why so little effort to manage culture• Arrogance that no culture issue existsor• Belief that, if culture clash exists, nothing

can be done about it

This could be interpreted as malfeasance!



Culture

Prevailing wisdom is wrong• Body of knowledge exists• Experience

• British Airways – the first successful large-scale corporate transformation

• Many other examples

But …. still the exception, not the rule



Culture

Misunderstanding of culture• What is meant by corporate culture

Culture has many components A manifestation of an overall system Cannot be dealt with in isolation Almost every aspect of an organization affects

its culture



Culture

Definition of organizational culture• Many different definitions• “the way we do things around here”

A critical aspect of organizational survival and success



Culture

Culture and performance – hard dataKotter & Heskett – comprehensive

study• Adaptive vs. non-adaptive cultures;

Revenue increase of 682% versus 166% Workforce expansion of 282% versus 36% Stock price increase of 901% versus 74% Net income increases of 756% versus 1%



Culture

National Versus Organizational Culture

Outside scope of this book, but;• Well-researched subject• Different national cultures add complexity to analysis of

corporate culture• References:

Rhinesmith (1996) A Manager's Guide to Globalization Medina-Walker (2002) The Guide to Cross Cultural

Success Hofstede (1991) Culture and Organizations


Chapter Two

THE ORGANIZATION AS A SYSTEM


Chapter Two The Organization As a System

Organizations are systems and obey the following:• The behavior of each element of a system has an

effect on the behavior of the whole system.• The behavior of the elements of the system, and

their effects on the whole system, are interdependent.

• However subgroups of the elements are formed, each has an effect on the behavior of the whole and none has an independent effect on it.



System thinking awareness• Almost all agree organizations are systems• Little awareness of what this means at

executive level – executives must:• represent and champion their functionand • be an advisor to the CEO of the group on overall

organizational system effectiveness

A critical skill during change



The individual as a performance systemGeary Rummler’s six areas of analysis critical to

understanding individual performance

•Skills & knowledge

•Feedback

•Individual capacity

• Performance specifications

• Task support

• Consequences



Winning the battle while losing the war

Without systemic thinking:• Rational changes in one department can

cause adverse effects in another• Net result is worse than before the

change



Non-systemic working puts individual team needs before the needs of the whole organization• Unresolved conflict between departments

and teams• Members of senior management teams

thinking only within their silos

Optimizing each part of a system does not optimize the system.



Synthesis before analysisWhen examining a “problem area”:

1. Understand how the problem area fits into the overall system and how the overall system affects the problem area

2. Analyze the problem area



Culture is not a system component, but:

• It is embedded in the system• It is a product of the system• It cannot be taken out of the system

or dealt with in isolation

Culture is a result, not an element, of the overall organization system.



Daily managerial behavior

People notice• Not what managers say, but• What managers do

"What you do speaks so loudly that I cannot hear what you say!"


Chapter Three

ORGANIZATIONAL SYSTEM ALIGNMENT


Chapter Three Organizational System Alignment

Organizational AlignmentBased on diagnosis – data-based, not

solution-based• Systemic and systematic• Organizational Scan process• Helps determine best and most effective

actions to take to resolve the issues confronting the organization



Systemic approachTwo keys to effective change:

1. First - ascertain what factors, both formal and informal, are driving the current system

2. Second - plan for altering or modifying those factors needed to support and sustain the new desired performance



• solid, proven, and highly intuitive diagnostic template for initial diagnosis of the organizational system drivers

Organizational Alignment Model

EXTERNAL ENVIRONMENT

MISSION/VISION

STRATEGIC GOALS VALUES

INFRASTRUCTURE (Structure, Systems,

OBJECTIVES Processes, Policies, etc.) PRACTICES

ACTIVITIES BEHAVIORS

RESULTS

STAKEHOLDERS



Organizational System Model• A model to sort out the complexity

considering an organization as a system • Gives guidance as to what to look for and

where to look• Incorporates the industrial engineering

model of work with the sociological model of work



Combines the•Industrial engineering model of work - a set of conditions exists within which a process operates to deliver an output

With the•Sociological model has work being performed by people within an organization

Organizational System Scan Model

CONDITIONS

PROCESS

OUTPUTS

ORGANIZATION

Direction - Business Situation - Mission/Vision - Strategy - Structure - Goals

Systems - Planning - Policy/Procedure - Support - Information Systems - Budgeting - Monitoring

Results - Success Measures - Profitability - Competitive Position - Stakeholder

Satisfaction

PEOPLE

Values and Beliefs - Ideal Values - Actual Values - Climate - Objectives & Demands - Expectations - Politics

Leadership- Management - Practices/Behaviors - Selection/Development - Reward/Recognition - Skill/Knowledge - Motivation/Feedback

Productivity - Performance Levels - Morale - Empowerment

- Loyalty/Commitment - Business Awareness - Continuous Improvement

WORK

Resources - Workload - Schedules/Cycles - Tools/Equipment - Data/Information - Physical Environment

Methods - Work Processes - Resource Allocation - Process Monitoring - In-Process Correction - SOP's

Products/Services - Product/Service Delivery

- Customer Satisfaction - Quality - Quantity - Service Levels



•Experience, research, and advancements in the understanding of organizations showed an adjustment was needed•The development of another row of three boxes, focused on External Factors of the organizational system•This new row represents the organization’s perception of and direct response to the external environment in which it finds itself operating

Organizational System Scan Model – additions

EXTERNAL FACTORS

CONDITIONS

PROCESS

OUTPUTS

Marketplace

- World Economy - Geopolitical Climate - Regulation - Competitors - Technology - Location - Business Cycle

Investment

- Strategic Alliances - Partnerships - Mergers & Acqui- sitions - New Product

Development - Privatization

- IPO

Positioning

- Market Share/Dominance

- Economies of Scale/Scope - Reduced Vulnerability - Increased Revenue - Globalization - New Markets


Chapter ThreeOrganizational

SystemAlignment

• The organizational system model reflecting our current understanding of the dynamics of an organizational system

CONDITIONS

PROCESS

OUTPUTS

EXTERNAL FACTORS

Marketplace - World Economy - Geopolitical - Climate - Regulation - Competitors - Technology - Location - Business Cycle

Investment - Strategic Alliances - Partnerships - Mergers & Acqui- sitions - New Product Development - Privatization - IPO

Positioning - Market Share/ Dominance - Economies of Scale/Scope - Reduced Vulnerability - Increased Revenue - Globalization - New Markets

ORGANIZATION

Direction - Business Situation - Mission/Vision - Strategy - Structure - Goals

Systems - Planning - Policy/Procedure - Support - Information Systems - Budgeting - Monitoring

Results - Success Measures - Profitability - Competitive Position - Stakeholder

Satisfaction

PEOPLE

Values and Beliefs - Ideal Values - Actual Values - Climate - Objectives & Demands - Expectations - Politics

Leadership - Management - Practices/Behaviors - Selection/Development - Reward/Recognition - Skill/Knowledge - Motivation/Feedback

Productivity - Performance Levels - Morale - Empowerment - Loyalty/Commitment - Business Awareness - Continuous Improvement

WORK

Resources - Workload - Schedules/Cycles - Tools/Equipment - Data/Information - Physical Environment

Methods - Work Processes - Resource Allocation - Process Monitoring - In-Process Correction - SOP's

Products/Services - Product/Service Delivery - Customer Satisfaction - Quality - Quantity - Service Levels



Purpose•To gather current data on the "organizational situation," as perceived by its functions and people, for use in decision making by top management •The Organizational Scan clarifies organizational intent and direction and captures information about the "real organization’s" alignment with that direction — its values and belief system, day-to-day life, priorities — in short, its culture. It also assesses relevance and helpfulness of organizational systems, policies, and procedures.

Benefits•Provides the CEO/Top Management with an efficient and comprehensive diagnostic scan of the organization at all levels•Identifies areas of potential greatest leverage for increasing organizational effectiveness as desired•Indicates priorities for action to move/transform the organization, which focuses and facilitates planning•Provides an assessment of the organization's readiness for change, and the adequacy of the organization's leadership and management to effect that change and, perhaps most significantly•Enables the alignment of the organization's strategy, culture, and infrastructure to the business reality confronting it

Uses of the Organizational Scan Model



• There is very little in organizational life that has broader impact and a greater number of potential changes in daily operations than the merger of two organizations into one new, integrated organization, as happens in a merger or acquisition.

• This is system change at its fullest, where a system model like the Organizational Scan Model can be extremely valuable.

• The issues are many and complex, and an organizational system model can be invaluable in helping to sort out and organize all of the data and information that must be considered.


Part 2Cultural Due Diligence and Assessment

CHAPTERS

4. OVERVIEW OF CULTURAL DUE DILIGENCE

5. PERFORMING CULTURAL DUE DILIGENCE


Chapter Four

OVERVIEW OF CULTURAL DUE DILIGENCE


Chapter FourOverview of Cultural Due Diligence

Due Diligence• The investigation of one party by

another party to gather information that will assist in decision making and risk analyses

• In conjunction with transactions between people or companies



Traditional Due Diligence considers; General Corporate Information Management Industry, Market, and Competitor Assessment Financial Information Assets and Facilities Intellectual Property Contingent Liabilities Tax Information Legal Information Insurance Sales and Marketing Customers Strategic Alliances

Rarely if ever gives any consideration to the dynamics of the two organizations’ cultures, their degree of compatibility, or the potential culture clash problems that are almost sure to arise after the deal is done.



The case for CDD• Culture clash is the main reason why some

55-77% of mergers and acquisitions fail in meeting their intended results

• By assessing the characteristics of both organizations’ cultures as soon as possible in the merger process, potential culture clash problems can be predicted, prioritized, and focused on in a comprehensive Cultural Integration Plan

• Proactive problem solving in advance



Cultural Due Diligence is appropriate in a number of key business situations, including:

• When considering mergers and acquisitions as a growth strategy

• When selecting a target company for merger or acquisition• When finalizing the decision to do the deal or not with a

target company• Immediately after execution of the Letter of Acceptance by

the target company• Immediately after finalization and approval of the merger or

acquisition• As "cultural triage" after the merger or acquisition becomes

effective, to deal with culture clash problems that surface



CDD activity sequence• Acquirer self-assessment

Objective assessment of “own” culture• Assessment of target companies

High-level initial CDD of a number of target companies• Detailed cultural assessment of selected target

company A full and detailed cultural assessment of the target

company and comparison with that of the acquiring company

• Alignment/Integration Planning Informed, data-based design of the overall

Integration/Alignment Plan



CDD by attributional model• Off-the-shelf survey type assessment

• No single assessment model of organizational culture exists

• Lack granularity or depth in their findings• Does not differentiate between value-based and

non-value-based differences• Daily behaviors still need to be determined by

interview, focus groups, and observations



CDD by customized assessment model• Based on a functional model of culture• Comprises

Interviews and focus group Workplace observation Document review Subsequent web-based large-scale

customized surveys



1 Intended Direction and Results

2 Key Measures

3 Key Business Drivers

4 Infrastructure

5 Organizational Practices

6 Leadership/ Management Practices

7 Supervisory Practices

8 Work Practices

9 Technology Use

10 Physical Environment

11 Perceptions and Expectations

12 Cultural Indicators and Artifacts

CDD cultural domainsTypically, the data is organized and presented within

the following cultural domains, where the organization's culture is on display every day.



CDD Deliverables• Detailed Cultural Profile of Both Organizations• Baseline Perceptions of Various Constituencies of Both Organizations

About Current Culture and the Merger or Acquisition• Specification of Cultural Similarities Within the Twelve Cultural

Domains• Specification of Cultural Differences Within the Twelve Cultural

Domains• Prediction, Specification, and Prioritization of "Culture Clash"

Problems and Their Impact on the Merger• Specification of Degree of Difficulty in Integrating the Two Cultures• Specific Recommendations on Avoidance and/or Minimization of

Culture Clash Problems in Integration• Integration Road Map for Implementation of Recommendations



Legal restrictions to due diligence• Full CDD can generally only occur after

Letter of Intent or Acceptance Access to people in target company limited

before this



Pre Letter of Intent or Acceptance activities

1. self-assessment of the acquirer 2. high-level estimate of the probable

cultural characteristics of potential target companies

3. assessment of the potential compatibility with target company executive teams

4. information to inform recommended retention strategies for key people at the target companies



Self-assessment of the acquirerIdentify and manage• Things that are not going all that well

internally, have not been dealt with, and are not desirable to take forward into a new, merged operation after an acquisition

• Areas within the acquiring company that are less than supportive of an acquisition in general



High-level estimate of the probable cultural characteristics of potential target companies

• High-level assessment of the target organization's culture

• Very detailed review of any documents that directly or indirectly give indications of aspects of the organizational culture

• Compare notes with other, non-culture, DD teams



Assessment of the potential compatibility with target company executive teams

• Series of visits, meetings, and social events in the pre letter period

• Enable objective assessment of future key managerial positions



Information to inform recommended retention strategies for key people at the target companies

• Structured interviews of key people – both managers and individual contributors

• Understand what they value in their current organization

• Enable design of strategy to engage their hearts and brains in the new merged organization



Assessing degree of difficulty of cultural integration• Preliminary estimate of the degree of

difficulty and resources required in integrating the two companies possible

• Allows intelligent and informed comparison with several potential target companies

• Informs the design of the eventual full CDD of the selected target company



Getting it right – H-P / Compaq merger• CDD early in the merger process• Cultural integration team from the start• Studied previous merger problems• CDD and cultural integration planning

played a major role in this successful merger

• After a full year of operation, success measures of the new hp are positive


Chapter Five

PERFORMING CULTURAL DUE DILIGENCE


Chapter Five Performing Cultural Due Diligence

The CDD Process• Qualitative

Interviews Focus groups Workplace observations Documentation review

• Quantitative Web-based survey(s) Related to domains or characteristics of the

culture identified from the qualitative process



Typical components of a CDD process1. Qualitative - High-level interviews2. Quantitative – Web-based surveys to sample of

the whole population3. Qualitative – Interviews across the

organizations4. Quantitative – Web-based surveys to entire

populations

Each stage is informed by the previous stage(s)



1 Intended Direction and Results

2 Key Measures

3 Key Business Drivers

4 Infrastructure

5 Organizational Practices

6 Leadership/ Management Practices

7 Supervisory Practices

8 Work Practices

9 Technology Use

10 Physical Environment

11 Perceptions and Expectations

12 Cultural Indicators and Artifacts

CDD Data organizationTypically, the data is organized and presented within the following cultural domains, where the organization's culture is on display every day.



1. Intended direction and results• Ascertain, from the top of the

organization on down, what the company intends to accomplish What is the business plan about, what is the

strategic intent and purpose of the organization, what results are expected from the business activity of the organization, and, most importantly, how are these things talked about, described, and communicated?



2. Key measures• What the company measures, why, and

what happens as a result The key measures say a lot about the manner

in which the company and its executives and staff are driven, particularly when the consequences for each measure are considered.



3. Key business drivers• What are the primary issues driving the

business strategy? Is the focus on competitive edge and, if so, how is that defined — price differentiation, quality, market share, service, reliability, or what? This tells you how the company views its

industry and its subsequent efforts within the industry – that is, how it defines success



4. Infrastructure• How is the company organized?

For example, are people expected to “go directly to whomever you need to talk to” or must proprieties be observed between different levels or functions? Are business units supposed to drive their business priorities first and foremost and respond to corporate, staff, or other unit needs when convenient, or vice versa?



5. Organizational practices• What formal and informal systems are in

place and what part do they play in the daily life of doing the work? How much flexibility is allowed at what levels in which systems? What is the relationship between political reality and business reality? For example, how are budgets developed and

managed?



6. Leadership/management practices• What is the balance between leadership

and management approaches with staff? What are the basic value systems about employees? How are people treated and why? How is the business plan implemented through the management system? How are decisions made? Which approach is predominant in each area /

department of the company?



7. Supervisory practices• What dynamics are involved in the

immediate oversight of the performance of work? Supervisory practices have a major impact on

employees’ feelings about the company and the work they do. The nature of the interaction between the employee and the immediate supervisor is one of the primary climate-setters for the culture of the company.



8. Work practices• How is the actual work performed?

Is the emphasis on individual responsibility or group responsibility? What degree of control, if any, does the individual worker have on the work flow, quality, rate, tools utilized, and supplies needed?



9. Technology use• What is the company's technology base,

and how is technology used? This must be considered in relation to both

internal systems and equipment, as well as the services and products provided to customers. How current is the technology being utilized? What are people used to in relation to technological support/resources?



10. Physical environment• How do the workplace settings differ?

Open work spaces versus private offices, high security versus open access, buildings, furniture, grounds — all can have a bearing on how people feel about work and the company. Changes in these areas, particularly if they are perceived as arbitrary, can result in bad feelings for years.



11. Perceptions and expectations• How do people expect things to happen?

What do they believe is important? What do they think should be important, versus what they perceive the company feels is important? Strongly held beliefs (perceptions) can be at

the core of their inability to work together.



12. Cultural indicators and artifacts• How do people dress and address each

other? What is the match between formal work hours and actual hours spent working? What company-sponsored activities exist and what are they like? Social norms form an important part of

organizational culture.



Values and Beliefs, and Myths, Legends, and Heroes• Often referred to in cultural assessment• Not included as specific domains• In actuality, these are imbedded in the 12

domains• More effective than direct questioning



Qualitative data most important• Rich in anecdotes and examples• Provides breadth and depth• Gives personal meaning to the culture• Eases the task of cultural change



Cultural assessment• the comparison of data and information

about the cultures of the two companies involved in the merger or acquisition

• Inputs Qualitative CDD data Quantitative CDD data Cultural data form Legal, Financial, and other

due diligence processes



Findings• Typical subject headings for CDD findings

The merger Culture Organizational change Leadership



Cultural Alignment and Integration Plan• Includes

Summary of CDD activities and data sources Summary of the results of the CDD activities Summary profiles of the cultures and sub-

cultures of each company, together with any geographical cultural differences

The key cultural synergies between the companies



Cultural Alignment and Integration Plan• Includes (cont)

Identification of areas of probable culture clash between the organizations

Whether Company A and Company B can be merged to create a new organizational culture

The estimated difficulty of cultural integration and the scope of the time and resources required to accomplish the integration



The Cultural Alignment and Integration Plan specifically:

Addresses the leading cause of the failure of mergers and acquisitions - culture clash between the two organizations

Provides detailed information that will facilitate development of an efficient and effective Cultural Integration Plan, which addresses the second major cause of failure - lack of speed in integrating


Part 3Cultural Alignment and Integration

CHAPTERS

6. ALIGNING AND INTEGRATING THE EXECUTIVE GROUP

7. ALIGNING THE MANAGEMENT GROUP

8. ALIGNING THE TOTAL ORGANIZATION

9. SUCCESS MEASURES

10. SUMMARY AND CONCLUSION


Chapter Six

ALIGNING AND INTEGRATING THE EXECUTIVE GROUP


Chapter Six Aligning and Integrating the Executive Group

Cultural integration is an essential factor in:• Implementing the new organization's

business plan• Getting support of and commitment to

the plan rapidly from the organization's people

• Primarily an issue of organizational alignment

NB: At this stage, a target company has been selected and the merger or acquisition is going to happen



Aligning the Organization• Clear mission and vision (intent and purpose)• Align, with the mission and vision:

Infrastructure (policies, procedures, internal systems) Strategy (goals, objectives, and daily tasks) Culture (values, practices, daily behaviors)

in order to achieve desired organizational results



Alignment priorities• Alignment process

Best begun at the top of the organization Greatest amount of effort and time spent per

employee is generally at the top of the organization

Least amount of time required per person is at the lower levels



Nine-step alignment and integration process1. Review business plan and overall organizational intent 2. Discuss with CEO to achieve ringing clarity on

organizational intent and business plan 3. Complete a CDD and assessment on both acquiring and

target companies 4. Review results with CEO and plan work sessions with

executive group5. Conduct issues-based team-building sessions with

executive group of the new organization



Nine-step alignment and integration process6. Conduct all-managers sessions with all managers in

the new organization 6.a - If necessary creation of Tiger Team to

investigate and resolve infrastructure issues

7. Conduct feedback-based planning sessions for executives and managers 7.a - Follow-up sessions as necessary

8. Conduct all-staff sessions 8.a - Follow-up sessions as necessary

9. Conduct work process re-engineering sessions as needed



Review of all the findings of the organizational scan with the senior executive, including identification of all broad systemic and alignment issues that require immediate resolution and time-sensitive issues that require immediate resolution before any further cultural integration activities can be initiated



These time-critical issues and opportunities should be the first activities engaged

in by the merged operation. You might say these represent the “low hanging fruit” that can be leveraged for immediate positive impact.

Once the immediate time-sensitive issues covered in the first part of the integration plan are dealt with, or at least well begun, the alignment activity needs to follow in very short order.



Arguably the most critical aspect of leadership and management in a cultural integration effort is the development of a mission, vision, strategy, and cultural values for the new organization and their communication with absolute clarityIssues-based team building focuses on the individual and collective behavior and effectiveness of the new organization's executive team in providing direction, motivation, guidance, and clarity to the new organizationGenerally three to five days of intensive workOutside facilitation experienced in the program is required



Issues-Based Team Building• For senior executive team• Achieve ringing clarity on vision, mission,

strategy, and cultural values• Identify time-sensitive issues• Needs honesty and candor to achieve real

agreement• Outside facilitation best• Further meetings may be necessary


Chapter Seven

ALIGNING THE MANAGEMENT GROUP


Chapter Seven Aligning the Management Group

It is the management group, ranging from senior managers to first-line supervisors, who are the primary drivers of organizational behavior. Their day-to-day behavior is quite possibly the most powerful form of cultural communication and influence in the organization. It is important that all managers in the new organization be absolutely clear on and committed to where the organization is, where it is going, why it is going there, and how it will get there. Outside facilitation recommended is.



All Manager Session• Attended by;

All who manage people, whether as managers or supervisors

Significant individual contributors• Achieve clarity on mission, vision, strategy,

cultural values – presented by members of the executive team

• Understand consequences of failure, collectively and individually

• Work out how to pass on this information to the teams

• Identify practices for the cultural values• Highly participative cross-functional process



All Manager Session 2• Managers group and regroup for maximum

interaction to create a valid all manager result• Collect issues coming out of discussion• CEO final briefing

Results of session Issues collected Need to communicate to teams Explain that the chosen practices are the basis for

future 360-degree feedback sessions



The investigation and resolution of any infrastructure issues that have surfaced during the CDD or in the issues-based team building or all manager session by3-10 person "Tiger Teams"

Involves lower level management and staff directly with issues

Teams model quick and definitive action



The all managers session is not sufficient to achieve significant modification in day-to-day manager behavior to effectively implement the new management practices that support the new organization's values.A series of feedback-based management-planning sessions is required to help managers identify the change and development that they need to model the values and practices on a day-to-day basis.



Feedback-based planning session• Individual 360-degree feedback on how managers are

perceived in implementing the new management practices in support of the new organizational values

• Enhancement of change management knowledge and necessary skills and knowledge where the CDD or the 360-degree survey has shown a general pattern of deficiency

• Each manager understands what it will now mean to be a manager in the new organization and what is now expected from him or her

• Managers leave with a personal short-term action plan• Event finishes with CEO forum with Q&A session



Typical feedback chart

• The manager is rated by self, boss, direct reports, and peers on each of the management practices.

• The numeric ratings focus on the frequency with which the manager demonstrates the practice, and the importance of that practice from the rater's perspective.



Monthly half-day follow-up sessions for at least six months. Reconnect meetings should be held at 30, 60, 90, and 180 days after the feedback-based planning session at a minimum, with a 360-degree feedback re-survey done in conjunction with the 180-day meeting

These sessions are scheduled and run on a team basis, so the group of 5 to 7 managers who were on a team together become an ongoing support group for individual change. By meeting each month and briefing each other on their individual progress - successes and problems - in carrying out their action plans and amending them as necessary with the support of this group, followthrough is significantly enhanced.


Chapter Eight

ALIGNING THE TOTAL ORGANIZATION


Chapter Eight Aligning the Total Organization

Engages every staff member directly in order to gain their understanding of and commitment to the new organization by involving them in the reasons for the merger or acquisition, the direction of the new organization, and the changes that are required for its successCarefully orchestrated sessions where the primary presenters are the organization's executives and senior managers—an outside consultant or facilitator is requiredOne-day events, composed of from 20 to as many as 100 people, organized in groups of 10 facilitated by a manager.



All-staff sessions agenda• Case for change• Mission, vision, strategy, values, and practices• Management 360-degree feedback and action

plan process• Exercise to create personal engagement in the

change effort – performance improvement suggestions – must be followed up



When there is a need for major infrastructure changes, can either:• Expanded use of tiger teams• Large group re-engineering session (This approach is much more

effective in dealing with infrastructure issues that cross multiple departments or work units across the organization than are smaller tiger teams or action learning teams)

Rapid and efficient Quick decision making due to complete representation


Chapter Nine

SUCCESS MEASURES


Chapter Nine Success Measures

General success measures1. Increase or decrease in share price2. Increase or decrease in revenue3. Increase or decrease in operating profit4. Increase or decrease in profitability5. Payback of capital costs



General success measures6. Recovery of any premiums paid7. Increase or decrease in productivity

levels8. Increase or decrease in market share9. Loss of key executives10.Loss of key staff



Success measures• Staff opinion/attitude survey• Web-based CDD re-survey• 360-degree leadership and management

survey• Monitoring cust. serv. and satisfaction levels• Current organizational measures• “Listening posts” and focus groups• Customer interviews/focus groups/surveys• Other specific measures


Chapter Ten

SUMMARY AND CONCLUSION


Chapter Ten Summary and Conclusion

Achieving Post-Merger Success• Is possible !• CDD and cultural alignment are necessary

components• Stakeholders should be tougher in insisting

on CDD before, and cultural alignment during, a merger or acquisition

• Board members and senior executive accountability require CDD and cultural alignment activities

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