Thursday, April 26, 2007

When Integration works; Essential elements to the 100 day Integration Plan

Ok, now that we have amused ourselves (and hopefully you) poking fun at what is wrong with integration plans, it is time for us to put up or shut up. Our experience proves that the inclusion of the following processes in the development of your integration plan ensures success:

Code of Conduct (Theirs, not yours!)

Through a true assessment of employees needs, we determine the behavioral guidelines that employees will engage in rather than the ones we think we want. Engaging employees in this process ensures their acceptance to personal accountability to the integration plan. These behavioral guidelines (I.E. Code of Conduct) are defined in such a way that they can be accurately measured and therefore managed. The measurement/management process continues during and after the integration phase.

Communications Strategy (Theirs, not yours!)

Through a true assessment of employees’ personalities, we determine the communication styles and guidelines that employees will engage in rather than the ones we think they will engage in. Engaging employees in this process ensures their acceptance and personal accountability to the communication process within the integration plan. These communication guidelines (I.E. Communication Strategy) are defined is such a way that they can be accurately measured. Therefore, managed change can be implemented during and after the integration phase.

A focused Vision and Mission (Theirs, not yours!)

Through a true assessment of employees’ values, we determine the individual purposes for employees to fully engage in the implementation plan. We brand the plan based on what they truly value rather than on what we think they should value. Engaging employees based on their individual purposes ensures their continued acceptance and personal accountability to the vision and mission of the plan. The vision and mission are defined is such a way that they can be accurately measured. Therefore managed change can be implemented during and after the integration phase. It takes more than a just a couple of posters on the wall.

Meeting Strategy (Theirs, not yours!)

Through a true assessment of employee’s preferred leadership and management styles, we determine a meeting strategy that will ensure continued accountability for employees to fully engage in the implementation plan. Engaging employees based on their preferred meeting strategy ensures that reporting becomes much more than what happened and why it did or did not work. The meeting strategy defined is such a way that reporting includes what will happen next based on current data and individual commitments that will ensure success.
Hiring Systems (Including outside vendors and training initiatives)

The initiatives described above are used to build the hiring system that ensures we attract and engage the right employees and out side services rather than the most talented. Previously, blog posts explain the need and provide numerous examples of the importance of this. The hiring system ensures that the workforce remains fully engaged in the integration plan; the right employees and resources are retained.

Performance Reviews (Including outside vendors and training initiatives)

The initiatives described above are used to build the performance review system that ensures we retain the right employees and outside resources rather than the most talented. Previously, blog posts explain the need and provide numerous examples of the importance of this. The performance review system ensures that the workforce remains fully engaged in the integration plan as the wrong employees and resources are given the choice to leave the project. Further, it eliminates ever being held hostage to an individual resource that you supposedly can’t do without.

When Integration goes bad; A 100 day Integration Plan

OK, so we will have a lot of fun here exaggerating what can go wrong during the typical 100 day integration plan. This is for informational and entertainment purposes only so please do not try these at home. The names have been changed to protect the innocent.

Day 1 – Read the following after checking how a typical 100 day integration plan is built:

Designing a typical Integration Plan

Determine your desired outcomes: What are you hoping to achieve within each integration area? What does successful integration look like?

Reverse engineer the activities and timeline benchmarks: What activities need to be accomplished to get you from where you are to where you want to be?

Determine the authority and responsibility people for each benchmark: Who has primary responsibility for making sure each activity is accomplished?

Determine the team for each responsible person: Who else will be working on that activity?

Set start dates and benchmark check dates: When does work on that activity need to start, and—if it’s not an ongoing requirement—by what date does it need to be completed?

Day 1 - Conduct one hour meetings with each department to determine their needs.

Result – “The Bobs” collect large amounts of data including team members saying what they hoped you wanted to hear, passive aggressive answers to the tough questions, and answers that get you to believe they are engaged and not shopping their resume. The true data is uncovered at the “What’s up Integration blog” and numerous “myspace” posts.

Day 2 - No matter what the interview data says or does not say; implement whatever version of the Implementation Plan that those in charge know to be the best. Announce this at the “Quantum Leap” Integration kickoff meetings at “Insert Resort Here”, Las Vegas, NV. Send three leaders to outside training and hire a consultant that specializes in your industry.

Result – Executive team is convinced that all are on-board and engaged 100%. All have a great time in Vegas and the employee alliance process begins. Some of these alliances are effective others are focused on sabotaging what they now call “Quantum Heap”.

Day 30 - Review results, “We are on track with our activity and result goals, hooray!” OK, let’s do it again next month.

Result – The data measures that show you will not make the 90 day goal are either missed or ignored. The employees being trained are being recruited due to their newly attained skills, and headhunters are now calling your best employees.

Day 60 – “Missed it by that much…” Although it is clear that we have missed our benchmarks, we have good reasons why and it is not our fault. Have a tough talk with those other people who are at fault. We just need to continue doing what we have been doing, and try harder over the next 30 days.

Result – The data showing that we are cruising off course at a high rate of speed is either ignored or missed. Meetings are now fear based sessions where the ineffective details are argued over, and over, and over again. 30% of the employees are now disengaged or just along for the ride. What could have been a truly “right person” for this integration has left and two highly skilled (“wrong people”) are hired. Did anyone hear from our consultant lately?

Day 90 - “Just a bit outside...” Actually, it is way outside.


Result - Fire someone important and the consultant. Replace the two additional resources that left and pay extra to retain the wrong resources that are sticking around to milk the budget for all that it is worth.

Day 99 - How did we get here?

Result - So we missed our 90 day goal, no problem. Does anyone really care? 85% of these fail anyway. Ok, so let’s gather everyone who is still on board and announce our new re-integration initiative. How about “Quantum Leap II”?

Result – Those boarding planes to Vegas have branded it “Here we go Again on Our Own”.

Wednesday, April 25, 2007

100 Day Integration Plan Success Story

We recently worked with a mid-sized company that had been forced into a merger roughly a year ago. The investors thought it "made sense" to have the 2 companies operating under the same umbrella and literally jammed them under the same roof. Profits were down, turn-over and tensions were high. The investors were ready to take what money they could get out of the deal before things fell apart any further.
The new CEO of the company came to us and asked for our help on behalf of his company and of the investors. We met with the investors and laid out our plan.

Step 1. Assess

We did an Integration assessment of the organization. We broke the assessment down by management, workers, and by which company they had come from before the merger.

Step 2. Evaluate the Data

We evaluated the data and looked for the similarities and differences in the responses. What we found was shocking. There had been no attempt by management to integrate any of the processes on either side together. Operationally the two companies couldn't have been different. Accounting, decision making, management, communication were all diametrically opposed to one another.

Step 3. Make a plan

We sat down with the CEO and came up with our 100 day integration plan. The first step was to get buy-in from the employees that the integration process was going to be worth it. Once we achieved this, we would go ahead with our step-by-step plan to get this company up and running again.

Step 4. Put it into action

We set up a company-wide meeting and the CEO laid all of his cards on the table. He told his people that the investors were getting ready to throw the company on the chopping block and asked for their support in getting their collective necks out of the noose. Within the first week, 10% of the staff had handed in their 2-week notices. Once we had gotten the non-committed people out of the equation we began integrating all of their processes together step-by-step, constantly checking in with the people to make sure we weren't going too fast and that they were still bought in to the process.
Over the next 2 months, the company lost another 5% of its employees. However, changes had already begun to take place within the organization. Profits were rising, morale was up, people were working together.


Step 5. Re-assess

The last step was to reassess the organization. Our final assessment showed that the organization had come together as one. Their business processes, and more importantly their people, had finally been integrated together. We did a presentation with the CEO for the investors on all that we had done, and what the organization had accomplished in the 100 days. After very little deliberation, the investors decided to let the company continue on its path and kept it off of the chopping block. This company today has become one of the leaders in its industry.

Tuesday, April 17, 2007

What Is The Value of Values?

A lot is written about values; recently in “The Secret” and “Good to Great” and not so recently in “How to Win Friends and Influence People” and “The Bible”. So why is this important to the financial statement?

How is it that professional sports attract 50, 100, and 150 thousands of fans week in and week out? Simply put, it is the power of shared values. When we relate what we value with that of something larger than ourselves, we will do some pretty extraordinary things. Most of the time, we do this without even a conscious thought.

Professional sports provide great examples of marketing towards these values, and continually measure it against the bottom line. Business’s market their values to consumers and continually measure this marketing against the bottom line. So why it is so hard to comprehend that corporate values can be marketed to our employees and continually measured to the bottom line? It can, it is easy, and because few pay much attention to it, it quickly distinguishes a great company from a good one quickly.

The following presents yet another recent survey evidencing the disconnect that exists in employee personal values and corporate values. How powerful will a company be with employees that are as raving of fans as Pittsburgh Steelers, Penn State Nittany Lions, or Minnesota Vikings fans?





Survey: Employer’s, Employees’ Core Values Sometimes Don’t Coincide

One-third of employees say their employer’s core values do not always line up with theirs, according to a survey of 615 Americans by CO2 Partners, a Minnesota leadership development firm.

The telephone survey was conducted March 7 to 11 by International Communications Research.

Gary Cohen, CO2 Partners president, said this situation has the potential to lead to employees experiencing an internal ethical conflict, which in turn, might be a factor in the high disengagement levels at many workplaces.

“Management often seems to expect employees to ignore their personal values in favor of the ones posted on the wall,” he said.

In regard to the question, “Which of the following best describes your attitude toward your own core values and how you earn a living?” the responses are as follows:

  • You know what your core values are and they are consistent with your employer’s: 44 percent
  • You know what your core values are, but they are not always consistent with your employer’s: 30 percent
  • You are not certain what your core values are, but you never feel uncomfortable working for your employer: 11 percent
  • You don’t feel core values have much to do with the work you do: 10 percent
Read more...

Monday, April 16, 2007

Top Talent loss after a Merger & Acquisition

This article makes a great point. It points out that the purpose of the pre-acquisition phase should be to establish a "good fit" between the two organizations. How many times does this actually happen or is it successful. The key is to make the process repetitive so that it continues on past the time when the ink dries on the legal documents and the checks with lots of zeros on them...



Top Talent loss after a Merger & Acquisition


Mergers and Acquisitions present a company with the ultimate change. There can be few business events that have the potential to create chaos, lose key people (Top Talent) and adversely affect morale than a merger and acquisition.

The process can be viewed as pre acquisition and post acquisition. Pre acquisition establishes a good business fit. Post acquisition comprises of making it all work. This includes developing a common strategy for the new organisation, consolidating duplicated services such as HR, finance and legal, consolidating corporate policies and procedures and deciding who will govern the new business...

Read more...

Monday, April 9, 2007

Culture Clash of the Titans

A $3.3 billion transaction is now in jeopardy because of a "culture clash" between the two sides. "It's a happy marriage until you get to the altar," Conover said of mergers involving big banks. If we look at a merger as a marriage of two companies, what are companies (and their priests (attorneys, private equity, etc.)) doing wrong? When two people meet, they spend time together, get to know each other, and "test the waters". When two companies merge together, does the same thing happen? Meetings are set up, teams of people take a look at the financials, but do most companies today spend any time looking to see if the people in the two organizations are a good fit together? After all, what is a company but a group of people brought together under one umbrella, working together to achieve the same vision?


U.S. Trust CEO to step down amid culture clash with BofA

San Francisco Business Times - April 4, 2007

Bank of America's merger-integration style apparently isn't sitting well with U.S. Trust's CEO, who will step down this summer.

Peter Scaturro's imminent departure, first reported in a front-page story in Wednesday's Wall Street Journal, doesn't bode well for U.S. Trust's outlook after it's sold by Charles Schwab (NASDAQ: SCHW) to the Charlotte, N.C., bank.


BofA is purchasing the company for $3.3 billion in a transaction that's expected to close later this year.

Read more...

Awareness does not equal action with performance

Almost 80% of CEO's in this survey say that "financial indicators alone do not adequately capture their company’s strengths and weaknesses." However, even though they are aware of these indicators, many are only now starting to measure and manage these areas. Hopefully, this means that companies are finally getting on the right path and are starting to realize that people are an asset!


New Deloitte survey: Companies still in the dark about their overall health
Board members and executives are more aware of the value of non-financial performance measures, yet their ability to monitor these remains inadequate
Published: 4/3/07
Contact: Madonna Jarrett
Deloitte Touche Tohmatsu
Director, Global Public Relations & CEO Comms
+1 212 492 3738

New York, April 3, 2007: Many board members and senior executives are still in the dark about the overall health of their organizations because they lack high-quality non-financial information. According to the second edition of the Deloitte Touche Tohmatsu survey, “In the Dark II: What many boards and executives still don’t know about the health of their businesses,” developed in conjunction with the Economist Intelligence Unit and released today, 78 percent of the CEOs surveyed say that financial indicators alone do not adequately capture their company’s strengths and weaknesses. Those surveyed admit they need information on non-financial performance indicators, but their ability to monitor these remains inadequate.

Read more...

Wednesday, April 4, 2007

90% of Global Executives "Get Culture"; Bain & Company study

"9 of 10 believe that corporate culture is as important as strategy for business success."

Following is a link to a Bain & Company's Management Tools & Trends 2007 study results.


"...softer management issues, such as corporate culture, environmental protection and knowledge management, have now moved to the forefront of executive thinking."

83% of more than 1200 international executives are committing to a significant shift in focus to corporate culture building strategies to increase performance and bottom line profits.


Executives are taking a hard look at soft issues, according to global management study by Bain & Company
Bain & Company press release 03/27/07

Executives are taking a hard look at soft issues,
according to global management study by Bain & Company
Bain survey of more than 1,200 international executives shows significant shift in focus to corporate culture, environmental protection and knowledge management

New York, NY - March 28, 2007 - Results of Bain & Company's Management Tools & Trends 2007 study find that softer management issues, such as corporate culture, environmental protection and knowledge management, have now moved to the forefront of executive thinking. According to a survey of more than 1,200 international executives by the global business management consulting firm...



Read more...

Tuesday, April 3, 2007

Finally, a company that understands integration!

Finally, a company that does it right. Props to Luxottica for understanding the need to "avoid culture clashes and hold on to key talent". These companies understood that a "culture clash" between the two merger companies, would be counter-productive for everyone involved on both sides. By demonstrating a "culture of inclusiveness", Robin Wilson (Senior Director of H.R. at Luxottica), was able to get beyond the "us and them" mentality that usually causes mergers and acquisitions to self-destruct from the inside-out.

Luxottica Group: Optimas Award Winner for Managing Change


In acquiring a major rival, the eyeglass retailer takes pains in reaching out to its new employees to avoid culture clashes and hold on to key talent.
By Ed Frauenheim

our-hour van trips across Ohio smoothed the way for a merger of two of the country’s largest eyeglass chains...

Read more...