Achieving Post-Merger Success: A Stakeholder's Guide to Cultural Due Diligence, Assessment, and Integration

List of Figures, Exhibits, and Worksheets xi

Contents of the CD-ROM xiii

Acknowledgments xv

Preface xvii

Introduction 1

PART ONE Mergers, Acquisitions, and Organizational Effectiveness 5

1 Mergers, Acquisitions, and Organizational Culture 7

The M&A Report Card 8

M&A Failure Costs 9

Why Mergers and Acquisitions Really Fail 13

Organizational Culture and Culture Clash 15

A Case Study in Managing Culture—British Airways 16

The Prevailing Wisdom Is Wrong 16

Culture as the Culprit 17

Defining Organizational Culture 18

Culture and Performance—The Hard Data 19

National Versus Organizational Culture 20

2 The Organization as a System 23

System Awareness 24

The Individual as a Performance System 25

Winning the Battle While Losing the War 26

Cross-Functional Teamwork 29

Management and the System 29

Synthesis Before Analysis 30

Culture Is Not a System Component 31

3 Organizational System Alignment 35

A Systemic Approach 36

Getting the Balance Right 37

An Organizational System Model 37

Checking the Vital Signs 46

PART TWO Cultural Due Diligence and Assessment 49

4 Overview of Cultural Due Diligence 51

Cultural Due Diligence 53

The Case for Cultural Due Diligence 54

Off-the-Shelf vs. Customized Cultural Assessment 56

Characteristics of a Customized CDD Model 59

CDD Deliverables 60

Due Diligence and Legal Restrictions 60

Pre Letter of Intent/Acceptance Activities 61

Assessing Degree of Difficulty of Cultural Integration 65

Getting It Right—The Hewlett-Packard/Compaq Merger 65

5 Performing Cultural Due Diligence 69

The CDD Process 69

Cultural Assessment 76

Drafting the Cultural Alignment and Integration Plan 81

PART THREE Cultural Alignment and Integration 83

6 Aligning and Integrating the Executive Group 89

Planning Cultural Alignment and Integration 89

Aligning the Organization 91

Discussing Results and Recommendations with CEO 91

Aligning and Integrating the Executive Group 94

Issues-Based Team Building for the New Executive Team 96

7 Aligning the Management Group 99

Gaining Clarity on Organizational Direction 100

Values and Practices 101

Gaining Agreement on Values and Practices 102

Communicating the Session Results 103

Tiger Teams 104

Feedback-Based Management Planning Sessions 105

Developmental Streams 107

Individual Action Plans 109

Follow-Up Sessions 109

8 Aligning the Total Organization 111

Design and Activities for All-Staff Sessions 111

The Case for Change 113

Work-Process Re-Engineering Sessions 115

9 Cultural Integration Success Measures 117

Financial Success Measures 117

Cultural Integration Success Measures 118

10 Summary and Conclusion 121

APPENDICES 123

Appendix A: The British Airways Transformation: A Systemic Approach 125

Appendix B: Organizational Alignment Model: A Reading 133

Appendix C: Organizational System Scan Model: An Overview 143

Appendix D: Organizational Scan: Sample Probes 149

Appendix E: Sample Values and Practices 151

Appendix F: Sample Manager 360-Degree Feedback Report: For A. Manager in XYZ Corporation 155

Appendix G: Sample Manager’s Action Planning Guide 159

Appendix H: Staff Involvement Day: Sample Agenda and Materials 185

Glossary 193

References 199

Index 203

About the Authors 209

How to Use the CD-ROM 211