Dealmakers Planning for a Successful Merger or Acquisition: Aligning the Management Group (Part 1)

Management Team

Last month In MidMarket Talk, Dealmakers Planning for a Successful Integration: The Challenge of Identifying and Retaining Key Talent Once the Deal is Final we took a step back and described essential steps in identifying and retaining key talent for the new organization.  The Executive Group made several critical decisions on moving forward with the new organization. This month we move forward to discuss the alignment of the Management Group; this follows the alignment of the Executive Group. If Dealmakers are true advisors, they need to advise their client on the criticality of aligning the Management Group.  


This article on Aligning the Management Group will be in two parts. This first part will focus on the All Managers Session and how to facilitate those sessions. Part 2 (next month) will show what to do with what comes out of the sessions for management to act for the accomplishment of the strategic intent of the merger or acquisition.  


The Management Group includes those ranging from senior management to first-line supervisors and this group is the driving force for organizational behavior. The Executive Group can set the direction for the new organization, but middle management drives the culture. In a new organization combined of two (or more) organizations, effectively leveraging the Management Group is critical for integrating the cultures. 


As Carleton and Lineberry point out, “Day-to-day management behavior is quite possibly the most powerful form of cultural communication and influence in any organization. Therefore, it is important that all managers in the new organization be absolutely clear on and committed to where the organization is, where it is going, why it is going there and how it will get there.” (Carleton & Lineberry, 2004, p. 99) It is also tantamount for every manager to know his or her role and responsibilities in helping the organization achieve its strategic objectives related to the merger or acquisition.


Once more, Vector Group’s Roadmap for M&A Success identifies nine phases:

  • Phase I -Target Identification
  • Phase II -Target Evaluation
  • Phase III -Pre-Go/No Go Decision Meeting 
  • Phase IV -Due Diligence
  • Phase V -Integration Planning
  • Phase VI –Go/No Go Decision Meeting
  • Phase VII -Share / Asset Purchase Agreement
  • Phase VIII -Integration (First two weeks)
  • Phase IX -Integration (First year)


We are now into Phase IX and the focus is all about getting the management group aligned and integrated. This phase also includes conducting a review of leadership/management in helping the leadership team keep actively focused on and working together to bring expected results. The reality is moving the management team to action in achieving the ROI. What does this call for in in terms of new behaviors and focus? The answer to this lies in a series of meetings called All-Managers Sessions


All-Managers Sessions: Gaining Strategic Alignment

The All-Managers Sessions have several components but the content itself will not accomplish a successful integration. Each of these sessions would be at least two days in duration that will help the Management Group gain clarity on the organizational direction. 

The first (component) is achieving clarity on the current business situation, mission, vision, strategy, and intended cultural values of the new organization. Included within this component is the clear articulation of the consequences of not achieving full integration and implementation of the new organization’s business plan. This plan needs to include both consequences for the organization and consequences individually for the managers attending the session.


This is where managers work with mission, vision, and strategy statements in preparation for passing this information on to their people in a manner that is appropriate to their areas of responsibility. This is best done in small groups of no more than ten people. after each manager has made a first pass at what the statements mean for himself or herself and his or her people and how to best communicate this information, they can share their planning with their small group and discuss it. (Carleton & Lineberry, 2004, p. 100)

After the work session, it is critical to engage in an open forum to discuss any questions, issues or concerns the Management Group might have on the current business situation, mission, vision, strategy, and intended cultural values of the new organization as identified above. We often use our Strategic Alignment Model to facilitate this discussion. All elements found in the model must be a concern of the Management Group for the new organization. 


Vector Group Principals developed the earliest version of this model back in 1986 while working on the transformation of British Airways (BA) from “bloody awful” and the least favored carrier across the Atlantic to the “World’s Favorite Airline” and later to the “World’s Most Profitable Airline.” 


People always say, “a picture is worth a thousand words” and this model certainly helps create dialogue between an advisor or consultant with his or her client organization. Simply stated, this model creates a common language so that everyone can achieve a clear understanding of the organization, outside factors that affect it, strategic goals to achieve, organizational values and practices that determine how organizational members behave and internal forces that drive the organization to deliver results to its stakeholders. 


Strategic Alignment During Mergers and Acquisitions 

The original model, called the Organizational Alignment Model, described two interdependent paths (strategic goals and values flowing from the mission/vision) for providing direction to all those concerned with achieving organizational intent. It brought the lofty global statements of the mission and vision down to day-to-day execution for delivery of organizational results.


The left-hand path naturally resonated with business managers and executives. The strategic path was and is the formal side of the organization and most businesses had this down to a science. It was familiar, straightforward and very business-focused. From the highest order mission (what we are in business to do) flows the strategic goals, objectives and activities (jobs and other tasks) toward achieving results. The left-hand path emphasizes what needs to be done: the broad strategic goals the organization will work toward; the objectives that units and individuals must accomplish to carry out-those strategies; the activities that must be performed to meet goals and objectives. 


The right-hand path was originally an incredibly foreign concept for most management and the average manager likely viewed this path as esoteric at best to touchy-feely at worst. This is the informal path and deals with the more intangible parts of the organization focusing on such things as values, practices and behaviors. The idea of vision was appealing to some but certainly did not catch on with everyone at first. 


The cultural path (on the right) shows how the business mission and objectives should be carried out. Organizational values flow from the vision and validate what is of intrinsic worth to the organization. Practices are the idealized embodiment of what values would typically look like or described as inside the organization. Typical day-to-day behavior reflects those values and practices . . . or not.  


An example of how to define a practice can be taken from our experiences over the years at British Airways (BA) where safety was, and still is, a value. The question to an organizational member might be something like, “If you were to describe safety here at British Airways, what would it look like on a daily basis?” The answer might result in something like taking time before a flight to fully complete the pre-flight safety checklist. For the performance improvement practitioner, any defined practice must be observable and therefore, measurable. A realistic assessment or diagnosis of the organization would show the difference between what the organization desires (values and practices) and what happens every day (behavior). (Craig, 2013)

Dealmakers should know that organizations are complex entities but simply stated, an organization is comprised of functions conducted by people striving for results. Systems thinking dictates that any system has boundaries, comprises many sub-systems within it and interacts with other systems outside of itself (the suprasystem). For our purposes in dealing with organizations, the suprasystem could be the marketplace (most businesses), the local community or society (most non-businesses).


Any factors found outside its four walls can dramatically impact the organization, but the organization has little, if any, impact or influence on those components. “The external environment is any condition or situation outside the organization that influences the organization’s performance. It includes such factors as the economy, governmental regulations, technology, competition, and the sociopolitical environment in which the organization operates.” (Carleton and Lineberry, 1992). 


Certainly, since 1992 external environmental factors such as those listed above have not changed as to what they are but how they affect an organization has changed dramatically in terms of how quickly they do. News reporting, social media and other technology greatly increased our awareness of the systemic nature of the world in which we live. A terrorist attack, a war, a violent weather storm, or other dramatic event somewhere on the globe can have devastating effects on organizations, on business, and on the economy. One needs to look no further than the volatility of Wall Street in reaction to the price of oil, a government shutdown, or anything else that would make investors nervous.


Stakeholders have a vested interest in the success of the enterprise (the organization). Stakeholders influence and are influenced by the organization (can include customers, distributors, shareholders, suppliers, government at any level, employees, the community, or society in general as mentioned previously. The relationship between the organization and stakeholders is stronger, more direct and is reciprocal compared to the relative one-way relationship between the organization and the external environment. 


The Infrastructure was a directional force added to the Organizational Alignment Model based on J. Robert Carleton’s experience at Bank of America.  He realized that the infrastructure could help or impede achieving business strategy. Our recent thinking is that infrastructure can drive culture and culture could drive infrastructure. (Craig, 2013)


A Bit More on Organizational Culture

With our 30+ years in working with organizational culture, we were admittedly late in adding the culture component for the model. We always described culture as “flowing through the organization.” Our recent thinking determined that was not enough and we needed to more clearly illustrate how a culture might look schematically in this model. As people view the model now, they can plainly see that the culture touches everything within the organization and everything both inside and outside the organization (External environment and stakeholders) touches the culture. We decided on a permeable circle to visibly show that influences from both inside and outside the organization flow back and forth. 


Part of the difficulty in presenting this kind of information to a Dealmaker is the disconnect in language. Dealmakers consist of accountants, lawyers, venture capitalists and other intermediaries. Their disciplines require precise language in contracts, investment, value, risk and the rest. Those of us on the human capital side of things have a very different way of describing organizations and the planning for and the culmination of a deal and its impact on people. Effective consultants think and act in a systemic way which means systems thinking and acting. Getting into detailed discussion of an organization as a living system would probably lose an audience of Dealmakers.  

The concept of organizational culture has not been around that long. Deal and Kennedy published their ground-breaking work Corporate Cultures: The Rites and Rituals of Corporate Life in 1982. Since that time, culture, as a business focus, is becoming much more important to those engaged in making organizations more effective. 


There continues to be a mystique surrounding organizational culture, and it is a misunderstood and misapplied concept. Each organization has a unique culture with any number of sub-cultures contained within it. Describing these cultures is about identifying and describing day-to-day collective behavior. In its essence values and beliefs define culture and it affects and is affected by all other parts of the organization. Organizational culture can create a critical business advantage or, on the contrary, provide an impediment to business success. 


Just what is organizational culture anyway? Here are two descriptions by notables in the field of organizational development:


"A pattern of basic assumptions--invented, discovered or developed by a given group as it learns to cope with the problems of external adaptation and internal integration--that has worked well enough to be considered valid and therefore, to be taught to new members as the correct way to perceive, think and feel in relation to those problems." Edgar H. Schein, 1985 


"Organizational culture is the way we do things around here.” W. Warner Burke and George Litwin, 1989 (Craig, 2007, 2013)

For the sake of simplicity and clear understanding for our purposes here, “the way we do things around here” is about as simple and clear as a definition can be. In moving forward with a new organization following a merger or acquisitions, we recommend picking “the best of both worlds” when planning for the cultural integration. In aligning both the Executive Group and the Management Group, the question regarding culture needs to be, “How do we need to do things around here to accomplish our strategic intentions with this merger or acquisition?”


As described in the June MidMarket Talk article on Aligning the Executive Group, the executives of the new organization must engage in an Issues-Based Team Building® session producing minimum results of clarity and agreement on strategy / business plan and development of a vision and of a set of organizational values to support the business plan.


Values and Practices 

Taking the espoused values identified by the Executive Group, managers must identify behavioral practices that represent those values. Additionally, the Management Group must agree on the behaviors that they will not only support and demonstrate daily but also commit to be held accountable to them. 

New managers must identify relevant and feasible practices to further define each value and specify day-to-day behaviors that will make the value come alive in the organization. The process takes place in a very dynamic work session that allows every manager to participate fully in the development of a set of practices for each of the values. 


The managers, working in groups of ten, are asked to discuss what the new values mean for the management group and what changes in behavior must be made if the values are going to come alive throughout the organization. In effect, each group is asked to do a quick diagnosis, based on their knowledge of various parts of the organization, as to what could prevent the values from becoming real and what behaviors would make the new values truly “the way we do things around here.” (Carleton & Lineberry, 2004, p. 101)

It is also our recommendation to have a set of sample values and practices for the Management Group to clearly illustrate what their final product might look like.

We recently facilitated such activities with an Executive Team and a Management Group. We provided a sample and they came up with the following actual values and practices for their organization:

Value Anchors and Practices

Teamwork – (for the) organizational good

  1. Shares power in pursuit of organizational objectives
  2. Makes sure there is an open exchange of views among team members
  3. Behaves in a way that indicates that you value all members of the team
  4. Makes sure that every interaction provides something of value to all parties
  5. Touches base with staff regularly to keep them informed
  6. Establishes clear ground rules for working together as a team
  7. Puts the needs of the organization above those of any work unit when resolving conflicting demands


  1. Puts the interests of the organization above those of individuals or single groups
  2. Encourages staff to become more knowledgeable about other areas of the business
  3. Makes sure there is an open exchange of views among all parties
  4. Attempts to positively resolve any misunderstandings or hard feelings with other people or groups within the organization
  5. Approaches other units involved in problems with a collaborative stance, focusing on the future
  6. Seeks out knowledge and understanding of other groups ways of working
  7. Establishes and maintains broad personal networks across the organization

Performance Management

  1. Readily recognizes and rewards good performance
  2. Challenges people to exceed their normal performance
  3. Gives informal feedback to people on a regular basis
  4. Makes sure assignments are clear and well-understood
  5. Establishes clear, specific objectives and performance measures for staff
  6. Encourages and rewards initiative in staff even if the initial results are less than ideal
  7. Gives suggestions for staff improvement more often in the form of advice than criticism. 
  8. Recognizes others’ experience by involving them in areas that demand their expertise.


  1. Behaves as though expecting others to do things right
  2. Behaves in a way that builds and maintains trust
  3. Gives staff a clear-cut decision when they need one
  4. Is consistent in the priorities communicated to others
  5. Informs others as soon as it is apparent that a deadline will be missed
  6. Faces, rather than appearing to “hide” from difficult or unpleasant truth
  7. Keeps facts and interpretations separate by clearly identifying what is fact and what is inference
  8. “Goes to bat” for his/her work team with higher management.


  1. Makes others know that they are free to question and disagree
  2. Confronts issues openly and honestly, as they arise
  3. Encourages open discussion of issues and concerns
  4. Treats requests to change plans or ground rules with an open mind
  5. Gathers sufficient information about needs and priorities of others before evaluating problems and issues
  6. Pays close attention to staff when they are talking assuring staff are both heard and understood
  7. Operates on the assumption that individuals/groups that differ with his/her opinions have legitimate and logical reasons for their views


  1. Holds staff accountable for achieving results, challenging excuses
  2. Follows up on responsibilities delegated to others to ensure that performance has met expectations
  3. Gives people helpful and well-timed feedback on how they are doing
  4. Works to establish milestones and measures by which the team effort may be evaluated
  5. Follows up reliably on matters referred to others for their action
  6. Constructively challenges “excuses” others may give for inaction
  7. Accepts full responsibility for his/her own actions


  1. Takes personal responsibility for making wise use of resources – people, time, money, etc.
  2. Acts in a way that lets people know where you stand
  3. Demonstrates personal commitment and persistence toward achieving the goals of the group
  4. Behaves in a way that communicates high personal standards of performance
  5. Willing to take a firm stand when necessary
  6. Ensures that things are done well, not just “to specifications”
  7. Supports positions he/she believes in even if they are not popular ones


  1. Demonstrates a sense of urgency and energy to achieve results
  2. Rewards innovation and calculated risk-taking
  3. Willing to take necessary action as soon as the need is apparent
  4. Demonstrates a preference for action rather than extensive reflection or analysis
  5. Searches for alternative way to deal with problems when the path is blocked
  6. Deals constructively with problems or issues rather than making, or easily accepting excuses
  7. Solves problems rather than escalating the decision upward

Next month we will discuss what happens after the All Managers Sessions regarding the values and practices, accountabilities, communicating the results of the sessions, developing feedback surveys to gauge perceptions of the manager’s behavior in the new way and creating development plans for staff and action plans for the managers. 


Next month:  Dealmakers Planning for a Successful Merger or Acquisition: Aligning the Management Group (Part 2) or What Happens After the All Managers Sessions?



Carleton, J. Robert and Lineberry, Claude S., Achieving Post-Merger Success: A Stakeholder’s Guide to Cultural Due Diligence, Assessment and Integration, Pfeiffer, John Wiley & Sons, 2004, pp. 99 -109.

Carleton, J.R. & Lineberry C.  S., Culture Change, in H.D. Stolovitch & E.J. Keeps, Handbook of Human Performance Technology, San Francisco, Jossey-Bass, 1992 

Carleton, J. Robert & Craig, Gary W., M&A Roadmap for Success, Unpublished Working Paper, ©2011, 2013, 2017. 

Craig, Gary W., Cultural Assessment: Considerations, Approaches and Implications, Unpublished White Paper, 2007, 2013)

Craig, Gary W., The Evolution of Strategic Alignment: An Historical Perspective with Implications for Performance Improvement Practitioners, 2013, A Work in Progress for Publication.


©Vector Group, Inc., 2018


Gary W. Craig is Managing Partner and COO the Americas and Asia for Vector Group, Inc. You may reach him at Vector Group is a global consulting firm specializing in systematic and systemic organizational diagnosis and interventions to ensure that corporate strategy, culture, and infrastructure are aligned to achieve breakthrough success. The firm’s focus is on Cultural Due Diligence (CDD) and Post-Merger or Post-Acquisition Integration. Vector Group, Inc. pioneered the concept of CDD. For more information, you may visit our website at or call us at (800) 566-0877.


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