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Joining Forces: Making One Plus One Equal Three in Mergers, Acquisitions, and Alliances

Name: Joining Forces: Making One Plus One Equal Three in Mergers, Acquisitions, and Alliances
ISBN: 9780470537374

by Mitchell Lee Marks, Philip H. Mirvis

August 2010

Intermediate to advanced

368 pages

8h 44m

English

Jossey-Bass

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Copyright
Preface: Joining Forces
What This Book Is AboutWhat's New in This Edition?StrategyOrganizationPeopleCultureTransition Management
The Authors
I. Creating Value in Mergers, Acquisitions, and Alliances
I. The Elusive Equation
1.1. M&A Scale and Scope1.2. Creating Value1.3. Strategy and Synergies1.3.1.1.3.1.1. Economies and Cost Savings1.3.1.2. Resource Combinations1.3.1.3. Revenue Enhancement1.3.1.4. New Knowledge and Capabilities1.3.2. Searching for Synergies1.4. Combination Forms1.4.1. Combining Organizations and Cultures1.4.2. Cultural Fit1.5. The Human Side of M&A1.5.1. Transition Management1.5.1.1. Stages of Change1.5.1.2. Psychology of Adaptation1.5.2. A Cautionary Tale1.5.2.1. Buying Values1.5.2.2. Cultural Clash1.5.2.3. Learning Together1.6. Making One Plus One Equal Three
II. What Goes Wrong and How to Make It Right
2.1. Combinations Historically and Today2.2. Phases of a Combination2.2.1. The Precombination Phase2.2.2. The Combination Phase2.2.3. The Postcombination Phase2.3. The Merger Syndrome2.3.1. Personal Signs of the Merger Syndrome2.3.2. Organizational Signs of the Merger Syndrome2.3.3. Cultural Signs of the Merger Syndrome2.4. Joining Forces—Best Practices2.4.1. Precombination Management2.4.1.1. Strategy2.4.1.2. Organization2.4.1.3. People2.4.1.4. Culture2.4.1.5. Transition Management2.4.2. Combination Management2.4.2.1. Strategy2.4.2.2. Organization2.4.2.3. People2.4.2.4. Culture2.4.2.5. Transition Management2.4.3. Postcombination Management2.4.3.1. Strategy2.4.3.2. Organization2.4.3.3. People2.4.3.4. Culture2.4.3.5. Transition Management2.5. Four Truths About Combination Management
II. The Precombination Phase
III. Strategic and Operational Preparation
3.1. The Four P's of Preparation3.2. A Disciplined Approach to M&A3.2.1. Cisco's Five Rules for Acquisitions3.2.1.1. Adapting to Changing Circumstances3.3. Purpose: Putting Strategy to Work in M&A3.3.1. Strategic Intent for M&A3.3.1.1. Gut Check3.3.2. Clear Search Criteria3.3.2.1. Criteria for Health Care Deals3.4. Partner: Search and Selection3.4.1. Thorough Screening3.4.1.1. Diligent Due Diligence3.4.1.2. Behavioral and Cultural Due Diligence3.4.1.3. Cross-Cultural Surveys3.5. Parameters: Defining the Relationship3.5.1. The Operating Relationship3.5.1.1. Integrating for Synergies3.5.2. The End State: Cards Faceup on the Table3.6. People: Managing the Human Dealings3.6.1. Planning During the Precombination Phase
IV. Psychological Preparation
4.1. Combination Mind-Sets4.1.1. Mind-Set of the Buyer4.1.2. Mind-Set of the Acquired4.1.3. A Partnering Mind-Set4.2. Engaging Minds4.2.1. Sensitization Workshops4.2.1.1. Role Reversal4.3. Human Reactions to a Combination4.3.1. What Makes a Combination So Stressful?4.3.1.1. Stress Begets More Stress4.3.2. Emotional Reactions to M&A4.4. Challenges in the Precombination Phase4.4.1. Retaining Desired Talent4.4.2. Winning "Their" People Over4.4.3. Dealing with the Acquired CEO4.4.4. Middle Managers' Role4.4.5. Managing the Sales Staff4.4.6. Connecting to Everyday Employees4.5. Preparation on the Seller's Side4.5.1. Preparing to Be Acquired4.5.2. Preparing People for Divestiture4.6. Precombination Phase Action Checklist
III. The Combination Phase

V. Leading the Combination
5.1. Exemplary Leadership from Both Sides of the Deal5.1.1. Preserving an Acquired Company's Culture5.1.2. Leading a Transformation5.2. Leadership Tasks in the Combination Phase5.3. Vision for the Combination5.3.1. The Combination Storyline5.3.2. Critical Success Factors5.4. Principles for the Transition5.4.1. Principles for Merging5.4.1.1. Rules of Engagement5.5. Selecting and Developing the Leadership Team5.5.1. Appointments: Before or After the Deal?5.5.1.1. Making Appointments as You Go5.5.1.2. Profiling and Picking Talent Through Management Ranks5.5.2. Senior Team Development5.6. Speaking to Employees5.6.1. The CEO Address5.6.2. Getting Managers Ready for Their Speech5.6.3. Rallying the Ranks5.7. Speed of Integration5.7.1.5.7.1.1. Focusing and Prioritizing Executive Attention
VI. Putting Companies Together: The Transition Structure
6.1. Transition Management Activities6.2. Transition Structures6.2.1. Components of a Transition Organization6.2.1.1. Integration Steering Committee6.2.1.2. Transition Managers6.2.1.3. Transition Teams6.2.2. Transition Structure Benefits6.3. Enhancing the Effectiveness of Transition Teams6.3.1. Organize the Work6.3.1.1. Organize teams around value creation.6.3.1.2. Employ a credible and rigorous issue-identification and decision-making process.6.3.1.3. Attend to teams' internal processes.6.3.1.4. Mind relations with the rest of the organization.6.3.2. Select Skilled Transition Team Members and Leaders6.3.3. Clarify Team Charters and Guidelines6.3.4. Determine Deliverables and Timetables6.3.5. Accelerate the Work of Transition Teams6.3.5.1. Knowledge Building6.3.5.2. Relationship Building6.3.5.3. Process Improvement6.3.6. Cross-Team Coordination6.3.7. Challenge Sessions and Reviews6.4. Looking Outside the Box6.5. Transition Planning and Implementation
VII. Managing People Through the Transition
7.1. Combination Stress Versus Commitment7.2. Managing Front-End Fears—The Four I's7.2.1. Insight7.2.2. Inspiration7.2.3. Information7.2.4. Involvement7.3. A Comprehensive Communication Campaign7.3.1. Communication Content7.3.2. Communication Processes7.3.3. Regular Updates7.4. Managing Emotions as Companies Combine7.4.1. Sensitization and Surfacing7.4.1.1. Using "Play" to Surface Merger Issues7.4.1.2. Counseling and Support7.4.1.3. Walking the Talk7.5. Dealing with Staffing and Redundancies7.5.1. Staffing Scenarios7.5.2. Downsizing7.5.3. Maintaining Morale7.6. Putting HR Together7.6.1. Accelerate Integration7.6.1.1. Workforce Reductions7.6.1.2. Upward Communication7.6.1.3. Total Rewards7.6.1.4. People Strategy7.6.2. Addressing Identity and Acculturation
VIII. Easing the Clash of Cultures
8.1. Culture in Combinations8.1.1. Why Company Cultures Clash8.1.1.1. Stages of Culture Clash8.1.1.2. Losing and Winning8.1.1.3. Stepford Wives Versus the Hell's Angels8.2. Managing Culture Change in a Combination8.2.1. Define a Desired Cultural End State8.2.1.1. Multiple Modes of Acculturation8.2.2. Deepen Cross-Cultural Learning8.2.2.1. Culture Clarification Exercises8.2.3. Pace the Combination with Cultural Sensitivity8.2.4. Drive the Combination Toward the Desired End8.2.4.1. Cultural Pluralism: Preserving a Culture8.2.4.2. Cultural Integration: Best of Both8.2.4.3. Cultural Assimilation: Absorbing a Culture8.2.4.4. Cultural Transformation: Building a New Culture8.3. Cross-National Culture Clashes8.3.1. Managing Culture Clash in International Combinations8.4. Combination Phase Action Checklist
IV. The Postcombination Phase
IX. Building the New Organization and Culture
9.1. Building the Postcombination Organization9.1.1. Top-Level Oversight9.1.2. Repurposing a Business Unit9.2. Building Cross-Functional Relations9.2.1. Clarifying Cross-Unit Needs9.2.2. Meshing Policies and Practices9.3. Culture Building9.3.1. Three Culture-Building Scenarios9.3.1.1. Keeping the "Old Ways"9.3.1.2. Acculturation by Default9.3.1.3. Acculturation by Design9.3.2. Culture Building in Cross-National Combinations9.4. Leverage for Culture Building9.4.1. Culture at the Working Level9.4.2. Culture Training9.5. Branding the Combination
X. Joining People and Teams Together
10.1. Postcombination Teambuilding10.1.1. The Timing of Adaptation10.1.2. Building Postcombination Teams10.2. Understanding Postcombination Mind-Sets10.2.1. Sources of Tension in Building New Teams10.3. Molding Individuals into a Team10.3.1. Psychological Enlistment: Forming the Team10.3.2. Role Development: Team Organization10.3.3. Trust and Confidence: Getting Down to Work10.4. Developing Effective Postcombination Teams10.4.1. A Prescription for Teamwork10.4.1.1. Building a Business Team10.5. Transforming an Asian Leadership Team10.5.1. Unity-in-Diversity10.5.1.1. Becoming a Leadership Community10.5.1.2. From Teaming to Transformation
XI. Damage Control and Recovery
11.1. Picking the "Wrong" Executive11.1.1.11.1.1.1. Damage Control11.2. Stuck in Transition11.2.1. Getting Unstuck, Moving Forward11.2.2. Empathy11.2.3. Engagement11.2.4. Energy11.2.5. Enforcement11.3. Redirecting a Combination11.3.1. Fast Start: Adopt and Go11.3.2. Operational Versus Strategic Integration11.3.3. Hurd to the Rescue11.4. Listening and Learning11.5. Postcombination Phase Action Checklist
V. Building M&A Competence
XII. Tracking and Learning from the Combination
12.1. Knowing What Is Going On12.1.1. Benefits of Combination Tracking12.1.2. Resistance to Tracking the Combination12.2. How to Track a Combination's Progress and Impact12.3. What to Monitor and How to Do It12.3.1. The Tracking Process—Gathering Action-Oriented Data12.3.2. Guidelines for Tracking the Impact and Progress of a Combination12.4. Tracking a Financial Services Combination12.4.1. Measurement and Corrective Actions Over Time12.4.1.1. Precombination Measurement12.4.1.2. Combination Phase Measurement12.4.1.3. Postcombination Measurement12.5. After-Action Review: A High-Tech Acquisition12.5.1. Good Intentions Gone Awry12.6. Tracking Customers
XIII. Joining Forces—Building M&A Competency
13.1. Levels of M&A Competency13.1.1. Level 1: Learning ... for Now and for the Future13.1.2. Level 2: Building a Core Competency in Combination Management13.1.2.1. Mastering the Art and Science of M&A13.1.2.2. Gaining Experience Through M&A13.1.3. Level 3: Building an Internal M&A Shop13.1.3.1. Staffing the M&A Group13.1.3.2. Building an In-House M&A Shop13.2. Building a Competence in Combination Management13.3. Ensuring That People Matter
Endnotes
PrefaceChapter OneChapter TwoChapter ThreeChapter FourChapter FiveChapter SixChapter SevenChapter EightChapter NineChapter TenChapter ElevenChapter TwelveChapter Thirteen

Overview

If 75 percent of all mergers fail, what makes the other 25 percent succeed?

Mergers, acquisitions, and alliances are more vital today than ever before in driving business success. This indispensible guide offers proven strategies and sound solutions to the multitude of integration issues that inevitably arise, and shows how to create a combined business that meets its strategic and financial objectives, competes better, and offers personal and organizational enhancements. Dubbed "merger mavens" by Fortune magazine, the authors report lessons learned from their experience in over 100 combinations. Executives, managers, and employees alike—in all industries and sectors—will find useful examples, strategies, and tools here.

Praise for Joining Forces

"This book will help both M&A veterans and those new to the game. The authorsprovide great insights into the human, cultural, organizational, and strategic factors that matter in M&A success."—Richard Kovacevich, chairman and CEO emeritus, Wells Fargo & Co.

"Don't commit to the merger or acquisition without them! I have personally witnessed how hard it is on everyone—employees, shareholders, communities, and especially executives—to work through an improperly managed merger. I have known Marks and Mirvis for almost twenty-five years and the only mistake our organization made was that we did not consult them soon enough. Their new book reflects unequalled experience and intellect. Don't merge, acquire, or be acquired without it!"—Michael R. Losey, CEO (emeritus), Society for Human Resources Management (SHRM)

"Joining Forces is a terrific resource for managers who want to understand thehuman dynamics of mergers and acquisitions, and a must-read for those who have to lead their companies through one. It is based on the latest research and providespractical insights and advice from authors who know M&A inside out." —Edward E. Lawler III, Distinguished Professor of Business, Marshall School ofBusiness, University of Southern California

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Getting it Together: The Leadership Challenge of Mergers and Acquisitions

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