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As I will describe in an upcoming posting (Mergers & Acquisitions Roadmap to Success), we at Vector Group developed a process called the M&A Roadmap for Success. This evolved from an original design for a specific client to more clearly define and leverage the role of a properly staffed, skilled, and focused Human Resources team in driving the success of present and future acquisitions and bringing desired results. Whoever is involved on the Integration team (which probably would include HR), they must be in a position to lead aspects of the acquisition process centered on the people issues (organizational culture) that so oftentimes cause failure.
As a pioneering consulting firm in the business of Cultural Due Diligence (CDD), we at Vector Group take a strong position that for successful Post-Acquisition Cultural Integration, an Integration Manager (IM) from the acquiring company must be part of the process. The Acquiring Company should generate a list of potential integration managers as early as the Target Evaluation stage. There must be an IM selected before the “Go or No Go decision stage” and in place roughly 30 days before announcing the deal.
Culture and the IM’s Specific Responsibilities Regarding Culture
The IM fills a critical role. He or she should be constantly assessing and evaluating the cultural fit between the two organizations. The IM should be sensitive to and taking note of how people verbally and physically behave in response to the following:
• Discussing and making decisions concerning business direction and results
• Discussing, responding to, and tracking “key” measures (meaning formal or informal things you DO pay attention to because there are real or perceived consequences).
• What business drivers (and why) are considered important enough to track and respond to in terms of daily activity?
• How the company is physically organized, how are responsibilities, accountabilities parceled out and structured – and how rigid is adherence?
• What are the organizational practices – policies, procedures, processes and authority? (Who or what function must review, approve, or be advised of what. And why?) And how rigid is adherence?
• How and how well are the six management/leadership needs of the company being met?
• What are the characteristics involved in supervision of the daily work? What is the nature or demeanor of supervision? Anticipating good, anticipating bad, looking for what is wrong, looking for what is right, suspicious, trusting – issues of general demeanor. Does staff feel that supervision is a help or a hindrance to getting the work done. Is supervision considered to be supportive of the work or irrelevant?
• What are the acceptable behavior patterns in terms of actually doing the work?
• Do technology considerations have a bearing on how things are done or how and what kind of decisions are made relating to getting the work done? Is it important to be “state of the art”, is it important not to be state of the art, when there is a trade-off between technology and personalized contact which way does the company err?
• Elements of the physical environment that have a physical or emotional impact upon the work and people. High security/low security, easy people/information flow versus restricted or controlled people/information flow. Open environment or compartmentalized environment.
• When staff talk about work what are the patterns of expectations and perceptions?
• When people think of heroes or villains in the company what comes to mind, what are the stories told and what are the conclusions or morals of the stories? What kinds of things, or artifacts (awards, mementoes, formal acknowledgments) are treasured or honored and why?
Primary IM Role
In working closely with HR, the Integration Manager will:
• Lead and manage the overall integration planning and implementation
• Develop his or her integration project team and mobilize other project teams as needed
• Serve onsite at the new acquisition as the “eyes and ears” to constantly monitor and evaluate the relative progress of the integration effort
• Act as the primary reporting resource for successes and potential failures
• Identify cultural challenges and provide strategies and/or tactics to ameliorate or mitigate them
• Be conversant and well-grounded in in the Acquiring Company’s culture while being sensitive to the new acquisition’s culture in identifying and leveraging synergies and dealing with divisive situations
• Facilitate meetings, task groups, “tiger teams” or other activities as needed to resolve conflict and/or solve problems
• Design, develop and disseminate an ongoing communications package that is modified as needed in meeting the specific needs of the newly acquired company’s employees
• Conduct management, leadership and team assessments and provide feedback on results
• Identify key metrics for the success of the integration; communicating, measuring and reporting relative achievement
Other Key Responsibilities:
• Lead client engagements and work streams related to process and strategy improvement including project management, integration assistance, and change management
• Execute process transformation, measurable improved operational performance, and organizational restructuring
• Establish client value propositions that tie financial metrics and CFO focus areas directly to business improvement
• Lead proposal development and other new business development activities by leveraging new and existing relationships with C-level executives
• Provide oversight of highly skilled client and company work teams throughout the project lifecycle and help ensure timely execution of project deliverables
• Provide input into engagement decisions including work plan and timeline, project management and resource allocation
The Integration Manager is an evolving role that must rise to the needs of the integration to insure its success. The IM must be present. We’ve seen the failures of distant Integration Managers who did not stay on top of things on a daily basis. This can be tantamount to failure of the integration effort. ©Vector Group, Inc., 2015
Gary W. Craig is Managing Partner and COO for Vector Group, Inc. You may reach him at [email protected]. Vector Group is a global consulting firm specializing in systematic organizational diagnosis and interventions to ensure that corporate strategy, culture, and infrastructure are aligned to achieve breakthrough success. Visit our website at http://www.vectorgroupinc.com or call us at (800) 566-0877.