Achieving Post-Merger Success

J. Robert Carleton is co-founder and senior partner of Vector Group, Inc. and a director of Vector Data Services and Vector Europe, Ltd. He has worked in both the public and private sectors and has extensive experience as both a manager and consultant. Claude S. Lineberry is co-founder and senior partner of Vector Group, Inc. He has worked for more than thirty years on a wide range of organizational issues with a variety of clients around the world.

• List of Figures, Exhibits, and Worksheets xiContents of the CD-ROM xiiiAcknowledgments xvPreface xviiIntroduction 1PART ONE Mergers, Acquisitions, and Organizational Effectiveness 51 Mergers, Acquisitions, and Organizational Culture 7The M&A Report Card 8M&A Failure Costs 9Why Mergers and Acquisitions Really Fail 13Organizational Culture and Culture Clash 15A Case Study in Managing Culture—British Airways 16The Prevailing Wisdom Is Wrong 16Culture as the Culprit 17Defining Organizational Culture 18Culture and Performance—The Hard Data 19National Versus Organizational Culture 202 The Organization as a System 23System Awareness 24The Individual as a Performance System 25Winning the Battle While Losing the War 26Cross-Functional Teamwork 29Management and the System 29Synthesis Before Analysis 30Culture Is Not a System Component 313 Organizational System Alignment 35A Systemic Approach 36Getting the Balance Right 37An Organizational System Model 37Checking the Vital Signs 46PART TWO Cultural Due Diligence and Assessment 494 Overview of Cultural Due Diligence 51Cultural Due Diligence 53The Case for Cultural Due Diligence 54Off-the-Shelf vs. Customized Cultural Assessment 56Characteristics of a Customized CDD Model 59CDD Deliverables 60Due Diligence and Legal Restrictions 60Pre Letter of Intent/Acceptance Activities 61Assessing Degree of Difficulty of Cultural Integration 65Getting It Right—The Hewlett-Packard/Compaq Merger 655 Performing Cultural Due Diligence 69The CDD Process 69Cultural Assessment 76Drafting the Cultural Alignment and Integration Plan 81PART THREE Cultural Alignment and Integration 836 Aligning and Integrating the Executive Group 89Planning Cultural Alignment and Integration 89Aligning the Organization 91Discussing Results and Recommendations with CEO 91Aligning and Integrating the Executive Group 94Issues-Based Team Building for the New Executive Team 967 Aligning the Management Group 99Gaining Clarity on Organizational Direction 100Values and Practices 101Gaining Agreement on Values and Practices 102Communicating the Session Results 103Tiger Teams 104Feedback-Based Management Planning Sessions 105Developmental Streams 107Individual Action Plans 109Follow-Up Sessions 1098 Aligning the Total Organization 111Design and Activities for All-Staff Sessions 111The Case for Change 113Work-Process Re-Engineering Sessions 1159 Cultural Integration Success Measures 117Financial Success Measures 117Cultural Integration Success Measures 11810 Summary and Conclusion 121APPENDICES 123Appendix A: The British Airways Transformation: A Systemic Approach 125Appendix B: Organizational Alignment Model: A Reading 133Appendix C: Organizational System Scan Model: An Overview 143Appendix D: Organizational Scan: Sample Probes 149Appendix E: Sample Values and Practices 151Appendix F: Sample Manager 360-Degree Feedback Report: For A. Manager in XYZ Corporation 155Appendix G: Sample Manager’s Action Planning Guide 159Appendix H: Staff Involvement Day: Sample Agenda and Materials 185Glossary 193References 199Index 203About the Authors 209How to Use the CD-ROM 211