Merging Companies: The Cultural Challenge

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Merging Companies The Cultural Challenge

• Addressing differences, capitalizing on best
  practices

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Inattention to Cultural differencesAny merger
is doomed if there is no real effort beforehand
to see whether the two cultures have anything in
common. - Anne Fisher, FORTUNE,
January 24, 1995
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Station Break . . .

• What is culture?

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Culture clash
When two organizations have different beliefs and
behaviors about

• How to make decisions
• How to organize resources
• How to supervise people
• and so on...

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For Example ? Hierarchical vs. Empowered ?
Risk Avoiders vs. Risk Takers ? Reactive vs.
Proactive ? Sales Driven vs. Profit Driven ?
Cautious vs. Innovative
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What fundamentals do you need to have in place?
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I. Management Support The Question Not Asked
of Business Leaders

• Do you make decisions
• about your people and culture with the same
  rigor, logic and confidence as your decisions
  about money, customers, products and technology?

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II. A culture integration is a change process

• A team must be put in place to manage the process
• Goals and outcomes need to be identified and
  measured
• Put a change management process into place
• Diagnosis and assessment precede action
• Project management processes need to be utilized

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III. Integration Principles must be established

• Default principle put in place (e.g. HPs Adopt
  and GO)
• Decisions and changes should be immediate and
  expected to minimize uncertainty and increase
  productivity
• Leverage the change by reprioritizing goals and
  vision
• Understand, teach and employ the key elements of
  change management
• Change as much as the organization can bear
  up-front

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Station Break . . .

• Give us one of your
• horror stories

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Culture Integration A Seven Step Process

• I. Culture Team established
• II. Principles and Goals of culture integration
  developed
• III. Assessment of both cultures conducted
• IV. Focus groups to validate and clarify
• V. Interventions identified for execution
• VI. Project management process put into place
• VII. Communication planning conducted

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I. Culture Team established

• Multiple disciplines on team (8) leader
  identified
• Team established mission, goals and objectives
• Team identified assessment approach to use
  (internal tool)
• Project management process developed
• (Microsoft Project)
• Focus group methodology created

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Becoming part of the Integration Team Structure
Executive Sponsor Carly Fiorina
Investor Relations Mike Milliken
Integration Lead Gen. Swarzkopf
Communication Lead Oprah
Audit Lead Joe Nacchio
Culture Team M. Stewart
Facilities Lead Don Trump
Marketing Lead Suze Orman
Legal Lead Jerry Spence
Acct/Tax/ Billing Lead Wesley Snipes
Finance Lead Warren Buffet
Sales Lead Zig Zigler
Product Operation Jack Lalane
SPC Operations Steve Case
MIS Bill Gates
Purchasing Postal Process Wynn
Client Relations Product Mgmt Marketing
Sales Laura Bush
HR / Benefits Col. Mustard
Conversions/ Proj. Mgmt Rev. Jackson
Development Cheryl Tiegs
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II. Goals of culture integration

• Assess incumbent and target cultures to identify
  opportunities and challenges
• Prepare managers to remake the organization
  through change management
• Translate assessment results into action steps
• Identify best practices across companies (adopt
  and go) not perfection
• Assist both organizations to handle the
  integration efforts through employee
  communications and change management practices

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III. Assessment Created or Purchased and
delivered

• Statistically valid and reliable
• Measures key organizational behaviors
• Used for two purposes differences/similarities
• Measures broad domains (leadership, planning,
  decision making)

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Results
Statistical differences noted between companies
in proactive, performance rewards, strategic,
clear goals and clear strategy ? Items with
confidence interval of 99 and denotes mean
difference of 1
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IV. Follow up focus groups

• Groups of 8-12 individuals interviewed in both
  companies (Cross section of companies)
• Structured questions based on survey results for
  greater clarification
• Short training given to interviewers
• Interviewers from various disciplines
• Interview results turned over to third party for
  analysis

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V. Interventions identified and prioritized
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VI. Project management process put in place
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VII. Regular Communication of results
Communication Updates
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Result Moving from this.
US
Them
Beard Executive Consulting
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To the integration of people and cultures
Common Practices
Combined Capabilities
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Strap on your sneakers.After a
merger, nothing runs faster than the clock.