Dealmakers Planning for a Successful Merger or Acquisition: Aligning the Rest of the Total Organization

work meeting

Last month In MidMarket Talk, we dealt with Dealmakers Planning for a Successful Merger or Acquisition: Aligning the Management Group (Part 2) and discussed the criticality of aligning the Management Group.  We focused on how to facilitate the All Managers Session and what to do with what comes out of the sessions for management to act upon for the accomplishment of the strategic intent of the merger or acquisition.  


We are clearly still in Phase IX of the Roadmap or Integration (First Year). This phase is about refinement and accessing potential. While in the previous Phase VIII or Integration (Two Weeks) was about getting people individually comfortable with and accepting of the new employment situation – this Phase is more about maximizing group performance and organizational efficiency and effectiveness.


During this Phase the Integration Manager should begin to focus on group and cross-group issues.

  • If the acquisition is small enough to act as a single team, then the focus turns from individual issues to Team issues and the many ways to form, build, and maintain an active and engaged team of people pursuing a common purpose.
  • If the acquisition consists of more than a single team the focus turns from individual issues to both Team and Company issues. Cross-functional issues/relationships in pursuing the business strategy as well as individual team issues are the focal points of activity. (More on Cross-Functional Partnering later in this article)


Some Specific Recommendations/Considerations for HR and the Integration Manager

While organization charts do a good job of identifying specific responsibilities and activities by unit, what is not dealt with is how the “space in between” the organizational units (the “white space”) is managed. Management of the “white space” is an area of mutual responsibility and one with considerable potential for productivity, efficiency, and quality increases when handled appropriately.


This is the period where the face of the activity should, over time, shift from the Integration Manager to the ongoing management team. After the All-Managers’ Session and the Feedback-Based Management Planning Sessions, individual managers should be in a very good position to take over and lead the integration efforts. 


An organization is a biological system. When things are altered in a system there is often a lag time between when a change is affected and when resulting unanticipated consequences or problems show up in the system. The management group needs to be aware of this and deal with these challenges accordingly. 


Management needs to find real and meaningful things around the integration to celebrate as the organization goes through this period. People collectively need to feel accomplishment and success for the extra effort involved in adjusting to new situations – this is a way of meeting this organizational need.


Under normal conditions, group/team performance will tend to gravitate towards the lowest acceptable level. High but achievable standards are central to organizational effectiveness and success with alignment and integration. Tactically, management needs to know that the expectations/demands that team members place on each other are far more powerful than anything coming from management. This is leverageable. 


Throughout this phase management needs to periodically quantify the nature and frequency of activities/behaviors that help fulfill the six leadership needs of the organization. Overall long-term success or failure of the acquisition rests on adequately fulfilling these organizational leadership needs appropriately. (Carleton & Craig, p. 23)


The major focus of Aligning the Total Organization is letting all of staff know of the directions and focus of the new organization. Everyone needs to be clear on the reasons for the merger or acquisition. Additionally, as Carleton and Lineberry point out, staff needs to know “the direction of the new organization and the changes that are required for its success. Every member of the staff must be personally informed and invited to help the new organization succeed.” (Carleton & Lineberry, 2004, p. 111)


Planning now needs to focus on designing the All-Staff Sessions which are “one day events composed of group from twenty to as many as one hundred people at one time. These events are carefully orchestrated session where the primary presenters are the organization’s executives and senior management. An outside consultant or facilitator emcees the session and keeps it on schedule.” (Carleton & Lineberry, 2004, p. 112)


Staff Involvement Day: Sample Agenda and Materials

Program Goals

At the end of the day, participants in the Program will:

  • Understand the Case for Change, and the business and economic reasons driving recent and planned change.
  • Understand the impact of their attitude about the company and the energy that they put into the job on the company's success.
  • Be clear on the specific Organizational and Management Commitments in progress or planned to address key business issues.
  • Understand what the company's vision, mission, strategy and values mean in their jobs.
  • Understand the company's values and practices, and the 360 Leadership Survey feedback reports to managers.
  • Individually identify and take action that will directly contribute to the vision, mission, strategy and values.
  • Collectively recommend actions and initiatives for consideration by the Executive Board and senior management that will help the company succeed.

Staff Involvement Day: Agenda

  • Welcome and Preview of the Day
  • Introductions
  • The Case for Change—As mentioned earlier, It is critical for all staff to be clear on the business reasons for the merger or acquisition, the direction for the new organization and required changes needed to succeed. It is equally important that each staff member knows what the consequences are for failure. 
  • Question and Answer Session
  • Forces for Change: Organizational and Management Commitments
  • The Company's  Vision, Mission, Strategy, Values—Staff needs an orientation to the new organization’s vision, mission, strategy and values. They also need to know about the values and practices outcomes agreed to by management in their sessions. 
  • Leadership Mandate 360 Survey and Management Action
  • Making A Difference:  Your Personal Challenge
  • Making a Difference:  Team Ideas To Make The Company Better—What we are talking about here is getting session participants to more fully engage, take some risks and offer performance improvement ideas to make the new organization work better and achieve its strategic objectives. It is imperative that management responds rapidly within just a very few days about these recommendations or commitment will be destroyed. This does not mean acceptance of all ideas but a response why the suggestion could be implemented or why it could not.  
  • Closing Comments

Staff Involvement Day: Ground Rules

It is helpful to have established and mutually understood "ground rules" regarding the individual and group responsibilities of all participants.


Proposed ground rules may include:

  • Time Keeping—Start and complete all activities on time.
  • Mutual Respect—Treat all participants, presenters and team coaches with respect.
  • Honesty and Openness—Raise any issue or concern and get a fair hearing
  • Confidentiality—Maintain confidentiality of information, if requested.
  • Program Environment—Work together to help create an adult, participative, enjoyable and spirited environment (Carleton & Lineberry, 2004, pp. 185-186)


Working Together In The New Organization: Partnering Process And Tools

Supporting the sharing of ideas and efforts in a way that contributes to the effectiveness of the whole group; working in collaboration with others for mutual benefit. The following section is adapted from a Vector Group, Inc. process paper called Partnering or Teamwork between Teams.


Partnering and Teamwork 

All organizations, especially new organizations created by a merger or acquisition, need people to work effectively both within groups and between groups.  For example, successful product development requires the efforts of a team, not just creative individuals working in isolation; and bringing the product to the marketplace requires close coordination between engineering and design, marketing, and other groups.  In the latter situation, very strong teamwork based on allegiance to either of the "old" organizations - the acquirer or the acquired - within teams can actually get in the way.  It can lead to an "us against them" mentality in which teams resist each others' demands, and even compete with each other for resources, rewards, or credit.


Often a major issue for organizations is building effective partnering relationships.  Partnering becomes critical in the new organization when groups or teams with different interests must work together toward mutual goals.  


Partnering is a way of working interdependently with other groups or organizations that gains maximum benefits for all.  Although both partnering and teamwork are interdependent relationships, there are some real differences between the two.  Work teams typically have a single overriding mission; in partnering relationships, the overall missions of the groups may be quite different.


There are four key components of partnering:  one "what" and three "how’s".  The "what" of partnering is mutual goals; partnering cannot work unless groups recognize that they have mutual goals.  The three "how" requirements are openness, respect, and shared responsibility.


Mutual Goals

Avoiding the destructive "us vs. them" mentality requires that both parties in a potential partnering relationship have mutual goals or interests -- and have a clear agreement on what those mutual interests are.  For example, vendor-purchaser relationships can become adversarial when vendors see the goal as selling the most product for the highest price or least effort.  Purchasers are then encouraged to look at getting as much as they can from the vendor at the best possible terms.


In reality, both parties have a mutual interest in having the product or service function effectively, and in seeing that the other gets a good deal financially.  Purchasers who help a vendor get a good deal also ensure themselves a healthy, cooperative supplier who can perform well for them, and will be likely to put out extra effort.  Vendors who help a purchaser get a good deal, also ensure themselves a loyal, supportive customer.


While this sounds simple and logical, much actual behavior in customer-supplier relationships is adversarial.  This happens when one or both parties chooses to focus on areas in which goals are not congruent, to the detriment of areas in which they have mutual interests.  The partnering principles are designed to help those in partnering relationships emphasize their areas of mutual interest, and avoid adversarial behavior.


Potential Problems in Focusing on Mutual Goals

  • "Old company" allegiance and loyalty after the merger or acquisition
  • Scarcity of resources -- e.g., time, money, personnel
  • Many directly competing goals
  • Failure to recognize the value of others' contribution to a mutual goal
  • Lack of mutual commitment to achieving goals


Positive Practices

  • Focus on the results required for the new company to succeed
  • Reconcile goals or compromise on alternatives
  • Set-up agreed guidelines for managing priorities 
  • Manage the conflicts - especially "culture clash" issues - as they arise
  • Relate conflicts to overall joint mission and goals of the new company
  • Accept validity of both positions -- deal with one at a time
  • Expand the partnership to include supporting each others' goals
  • Encourage solving problems at the level at which they occur


Things to Avoid

  • Fighting; active hostility
  • Harboring grudges, nurturing resentments, ill feelings
  • Protectionism or over-control
  • Escalating conflicts
  • Ending the relationship (last resort)



Openness means that both parties in a genuine partnering relationship must feel free to raise any issue or concern and confidently expect that it will be received in a spirit of cooperation.  That is, there should be no "sore points" that can't be raised on either side.  Nor should the parties be protective of information that is relevant to their mutual goals.


A free and open exchange of relevant information is required for partnering to work.  Withholding key information usually becomes evident very soon.  When it occurs, it creates the impression that the other party is trying to gain an edge and almost always lends an adversarial note to the relationship.


Potential Problems in Maintaining Openness

  • "Old company" allegiance makes it difficult to initiate cooperative discussions
  • People withhold useful or necessary information for personal advantage
  • People are concerned about protection

Positive Practices

  • Prepare an opening in advance; try it out on someone
  • Hold a discussion with a neutral third party  referees from both companies present
  • Openly acknowledge past barriers; state desire to forget them
  • Stay open; avoid retaliation if initial attempts are not successful
  • Directly ask for information if it's not volunteered
  • Confront withholding: "We need full information to work together."
  • If necessary, acknowledge the need to protect some information; agree on how to handle it

Things to Avoid

  • Being defensive when addressing questions or concerns
  • "One-upmanship" by sharing information in a way intended to gain advantage or leverage


True respect means behaving towards others in a way that assumes they have value:  that differences stem from legitimate motives, and that people will typically behave in a responsible way.  When differences are respected as legitimate, they can be an energizing force, and a source of innovation and flexibility.  Lack of respect for differences can destroy a partnership through mistrust and misunderstanding.  Differences among people provide great opportunities for synergy or dysfunction.


Most people want and intend to behave responsibly and competently.  When we respect that, and behave accordingly, we are likely to get responsible, competent behavior from others.  Yet all too often, management behavior sends signals that indicate lack of respect for people's intentions.  For example:  when we institute restrictive and overly-detailed expense control systems, we signal an expectation that people will not behave responsibly without them; when we give overly-detailed instructions for an ordinary task, we may signal an expectation that the person will otherwise make a mess of things.


Potential Problems in Maintaining Respect

  • Lack of understanding of others' values and circumstances
  • Lack of appreciation for how others see us
  • Restrictive organizational systems that signal lack of respect to many
  • Reacting to differences in a hostile or defensive manner


Positive Practices

  • Behaving in a way that supports the confidence and self-esteem of others
  • Resolving issues through problem-solving, rather than giving directives
  • Behaving as though you expect others to do things right
  • Acting as if you assume differences in view stem from legitimate motives
  • Providing direction in the form of guidelines, rather than rules
  • Treating irresponsible behavior as an exception, rather than a signal to establish controls or sanctions
  • Looking to expand, rather than limit individual decision-making
  • Asking appropriate questions; taking time to learn cultural differences


Things to Avoid

  • Talking about other groups behind their backs
  • Treating commitments made as minor, trivial
  • Stereotyping or "labeling" others
  • Communicating a low opinion of others' capabilities or contribution
  • Taking decisions away from them


Shared Responsibility

An effective partnering relationship requires mutual commitment to goals, decisions, actions, and the consequences of those actions.  That means sharing the effort -- but more importantly, sharing responsibility for making things work, and taking a fair share of the risks when they do not.  Partnering relationships will not work if people focus on trying to avoid responsibility or risk.  And they will seldom work well if shared responsibility is taken to mean that groups carve out independent roles for themselves -- "We'll do our piece, and you do yours."


Successful partnering requires the commitment of all parties to all aspects of the joint effort, even though one may take primary responsibility for implementing a given area.  All too often, groups try to control responsibility and risk, by finding a limited role that they are comfortable with -- and by avoiding involvement in the other party's role.  In so doing, they limit apparent risk to themselves, but often increase the overall risk of failure of the joint effort.


We can and should limit risk, of course -- but we must take risks.  Partnering will not work where one party is absolutely free of all risk, or where either party focuses on trying to shift risk to the other.


Potential problems in sharing responsibility and risk

  • People fail to treat commitments seriously
  • People have different understandings of "quality"
  • One party communicates distrust of the other
  • Overload:  one or both parties tend to over-commit
  • One or both parties attempt to over-control; following the rules becomes more important than reaching the goal
  • Imbalance of effort:  one party does the work, the other reviews it
  • Protection:  one party focuses on ensuring that "we aren't held accountable for your mistakes"


Positive Responses

  • Take the time to be clear about agreements
  • Ask for early warning, should problems arise
  • Ensure mutual understanding of the importance of meeting commitments
  • Focus on solutions, rather than blame
  • Review understanding of agreements
  • Work to the spirit, not the letter, of the commitment
  • Focus on principles and guidelines, rather than rules and regulations


Things to Avoid

  • Establishing penalties
  • Assuming or expecting the worst (we usually get what we expect)
  • Hoarding, rather than sharing, credit
  • Using deceit or misdirection to avoid exposing areas of vulnerability
  • Apathy; letting the other party take the load when things get difficult
  • Showing lack of respect for the other's contribution
  • Unilateral decisions in areas of mutual responsibility
  • Shifting blame to the other party if things go wrong



The principles of partnering provide a basis for building solid working relationships between groups, individuals, or organizations that have different interests, agendas, or objectives - but must nevertheless, work together to achieve mutual goals. They can be used at the beginning of a relationship to develop clarity and forestall misunderstandings, or at any time, to resolve or prevent problems. What could be better for a beginning relationship like a merger or acquisition than working together across functions? 


Next month: Success Measures for Alignment, Cultural Integration and Future Considerations.  



Carleton, J. Robert and Lineberry, Claude S., “Aligning the Total Organization,” Achieving Post-Merger Success: A Stakeholder’s Guide to Cultural Due Diligence, Assessment and Integration, Pfeiffer, John Wiley & Sons, 2004, pp. 111-116.

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

Partnering or Teamwork between Teams. Unpublished Process Paper, ©Vector Group, Inc., 1996 & 2012. 

©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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