Unleashing the Potential of Mergers and Acquisitions The Art of Aligning Corporate Cultures 4/8/2012

Transcription

1 Unleashing the Potential of Mergers and Acquisitions The Art of Aligning Corporate Cultures Francis L. Battisti, PhD, CEO, Battisti Networks, PLLC, Binghamton, NY Top 4 Things to Know for CE 1. Make sure your BADGE IS SCANNED each time you enter a session to record your attendance. 2. Carry your Evaluation Packet with you to EVERY session. 3. Pharmacists, Pharmacy Technicians and Nurses need to track their hours on the Statement of Continuing Education Form as they go (the 2-page triplicate form, so press firmly!). 4. FOR CE: At your last session, total the hours and sign both pages of your Statement of Continuing Education Form. Keep the PINK copy for your records and place the YELLOW and WHITE copies in your CE Envelope. Make sure an Evaluation Form is in your CE Envelope for each session you attended (extra forms are available at the registration desk if you forgot to pick one up). Write your name and unique ID number (six digit number at the bottom of your name badge) in the designated area on the outside of the envelope, seal it, and place it in the drop box located near the 4/8/ registration area. Francis L. Battisti is the CEO of Battisti Networks, LLC. The conflict of interest was resolved by peer review of slide content. Clinical trials and off-label/investigational uses will not be discussed during this presentation. 4/8/

2 Program Objectives 1. List organizational strengths and weaknesses that may impact the success of a merger. 2. Describe the business case for effectively transitioning corporate cultures. 3. Describe Dr. John Kotter s The 8 Step Process for Leading Change, as a pragmatic culture change tool for strategically evaluating market consolidation opportunities. 4 Mergers and Acquisitions Merger is a transaction in which two companies opt to meld into a single entity. Acquisitions involves the takeover of one company by another. Organizational Culture the social glue the Company s DNA Leadership ability to influence the behavior of others and persuade them to willingly follow a desired course of action. 5 Motivations Vary Conscious Motivations Growth..Globalization..Competition Unconscious Motivations Opportunism, hubris, myopia Historically Cost Savings and Economics of Scale 6 2

3 The Formula Leadership Communication Corporate Culture Leadership Creating Culture Communication 4/8/ Leadership Dimension Transformational Leaders..Inspiring Inspirational Motivation Intellectual Motivation Individualized Consideration 4/8/ Leadership Dimensions Transactional results oriented Contingent Reward Management by exception active Management by exception passive 4/8/

4 Leadership Dimensions Laissez faire avoiding Avoids Making Decisions Hesitant in Taking Risks Absent when Needed 4/8/ Truths Success of M&A is as much about People and Organizational Culture as it is about Financials! Engagement with creative problem solving, skills during transitional times. Understand how to shape employee behavior. 11 Truths Disengagement can result from uncertainty and emotional strain. Loss of Motivation Sabotaging Communications Negative Atmosphere Lower Productivity 12 4

5 Truths Actions and attitudes of Senior Leadership are Key components to Positive Performance. Hold things together Share and Live the Vision Set Priorities Create Positive Momentum 13 Truths Actions and attitudes of Senior Leadership foster a supportive organizational culture. Visibility Meaningful Involvement Open Communication 14 Truths Positioning for success of M&A occurs Before, During and After the Transformation. Manage Change Develop Staff Synergies Integrate Diverse Cultures Maintain and Grow Employee Performance 15 5

6 Truths Transforming organizational culture is about Skill, Technique and Timing. Team Building Change integration Conflict Resolution Employee Engagement Surveys Leadership Development How the HP and Compaq Merger Went So Wrong 18 6

7 HP and Compaq Loss of ½ of Market Value Heavy Job Losses Ineffective Management 2 Major Ethics Scandals How the Daimler Chrysler Merger Went So Wrong 21 7

8 Daimler Chrysler Culture Clashes Dislikes and Distrust Ran Deep Marrying Up Marrying Down Large rifts in business practices and management No Coordinated Course of Action Key Manager Left How the AOL Time Warner Merger Went So Wrong 24 8

9 AOL Time Warner Lack of Perceived Integrity Lack of Equality Failed Implementation of Shared Vision Poor Communication Lack of Climate for Synergies of Diverse Cultures How the Renault & Nissan Alliance Has Paid Off 27 9

10 Renault Nissan Alliance Cooperation and Synergies Combined Expertise and Technology Sharing Combined Teams and Information Systems Close Collaboration Coordination Bureau Steering Committee, Cross Company Teams, Functional Task Teams, Task Teams 28 70% of organizational culture change fails because it doesn t fit into the current culture and it s ordered in a command and control way and causes resistance. ~ 4/8/ John Kotter Leading Change 10

11 Eight Myths for Organizations Not Establishing a Great Sense of Urgency Not Creating a Powerful Enough Guiding Coalition Lacking a Vision Undercommunicating the Vision by a Lack of Ten Not Removing Obstacles To The New Vision Not Systematically Planning for and Creating Short Term Wins Declaring Victory Too Soon Not Anchoring Changes in the Corporation s Culture ~ John Kotter 4/8/ STEP ONE Not Establishing a Great Sense of Urgency Establishing a Sense of Urgency 11

12 STEP TWO Not Creating a Powerful Enough Guiding Coalition Forming a Powerful Guiding Coalition Lacking a Vision STEP THREE Creating a Vision STEP FOUR Undercommunicating the Vision by a Lack of Ten Communicating the Vision 12

13 STEP FIVE Not Removing Obstacles To The New Vision Empowering Others To Act on the Vision STEP SIX Not Systematically Planning for and Creating Short Term Wins Planning for and Creating Short Term Wins STEP SEVEN Declaring Victory Too Soon Consolidating Improvements and Producing Still More Change 13

14 STEP EIGHT Not Anchoring Changes in the Corporation s Culture Institutionalizing New Approaches Unless you are prepared to give up something valuable you will never be able to truly change at all, because you'll be forever in the control of things you can't give up. ~ Andy Law Creative Company People don't resist change. They resist being changed!" ~Peter Senge Un adaptive cultures will have an even larger negative financial impact in the coming decade. John Kotter & James Heskett, Harvard Business School, Corporate Culture and Perfomance In most organizational change efforts, it is much easier to draw on the strengths of the culture than to overcome the constraints by changing the culture. ~Edgar Schein, professor MIT Sloan School of Management 4/8/ Learning Assessment Questions & Answers Please refer to the NHIA Annual Conference & Exposition 2012 On Site Program for a brief post test. francis@battistinetworks.com 4/8/