Unleashing the Potential of Mergers and Acquisitions—The Art of Aligning Corporate 

Cultures

Francis L. Battisti, PhD, CEO, BattistiNetworks, PLLC, Binghamton, NY

Top 4 Things to Know for CE1. 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 registration area.4/8/2012 2

• 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.

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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. 

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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.

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Motivations Vary• Conscious Motivations

Growth..Globalization..Competition

• Unconscious MotivationsOpportunism, hubris, myopia

• HistoricallyCost Savings and Economics of Scale

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The Formula• Leadership

• Communication

• Corporate Culture

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Leadership

Communication

Creating Culture

Leadership Dimension• Transformational Leaders..Inspiring

• Inspirational Motivation

• Intellectual Motivation

• Individualized Consideration  

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Leadership Dimensions• Transactional…results‐oriented

• Contingent Reward

• Management by exception‐active

• Management by exception‐passive

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Leadership Dimensions• Laissez‐faire…avoiding

• Avoids Making Decisions

• Hesitant in Taking Risks

• Absent when Needed

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TruthsSuccess 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.

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TruthsDisengagement can result from uncertainty and emotional strain.

• Loss of Motivation

• Sabotaging Communications

• Negative Atmosphere

• Lower Productivity

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TruthsActions and attitudes of Senior Leadership are Key components to Positive Performance.

• Hold things together

• Share and Live the Vision

• Set Priorities

• Create Positive Momentum

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TruthsActions and attitudes of Senior Leadership foster a supportive organizational culture.

• Visibility

• Meaningful Involvement

• Open Communication 

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TruthsPositioning 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

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TruthsTransforming organizational culture is about Skill, Technique and Timing.

• Team Building

• Change integration 

• Conflict Resolution

• Employee Engagement Surveys

• Leadership Development16

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How the HP and Compaq  Merger Went So Wrong 

HP and Compaq• Loss of ½ of Market Value

• Heavy Job Losses

• Ineffective Management

• 2 Major Ethics Scandals

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How the Daimler ChryslerMerger Went So Wrong 

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

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How the AOL‐Time Warner Merger Went So Wrong 

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

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How the Renault & Nissan Alliance Has Paid Off 

Renault‐Nissan Alliance• Cooperation and Synergies

• Combined Expertise and Technology Sharing

• Combined Teams and Information Systems

• Close Collaboration

Coordination BureauSteering Committee, Cross Company Teams, Functional Task Teams, Task Teams

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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.

~ www.ocai.com

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John KotterLeading Change

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

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Eight Myths and Steps toTransform Your Organization

STEP  ONE 

Myth‐• Not Establishing a Great Sense of Urgency

Step to Transform‐• Establishing a Sense of Urgency

Eight Myths and Steps toTransform Your Organization

STEP  TWO 

Myth‐• Not Creating a Powerful Enough Guiding Coalition

Step to Transform‐• Forming a Powerful Guiding Coalition

Eight Myths and Steps toTransform Your Organization

STEP  THREE 

Myth‐• Lacking a Vision 

Step to Transform‐• Creating a Vision 

Eight Myths and Steps toTransform Your Organization

STEP  FOUR

Myth‐• Undercommunicating the Vision by a Lack of Ten

Step to Transform‐• Communicating the Vision

Eight Myths and Steps toTransform Your Organization

STEP  FIVE

Myth‐• Not Removing Obstacles To  The New Vision

Step to Transform‐• Empowering Others To Act on the Vision

Eight Myths and Steps toTransform Your Organization

STEP  SIX

Myth‐• Not Systematically Planning for and Creating Short‐Term Wins

Step to Transform‐• Planning for and Creating Short‐Term Wins

Eight Myths and Steps toTransform Your Organization

STEP  SEVEN

Myth‐• Declaring Victory Too Soon 

Step to Transform‐• Consolidating Improvements and Producing Still More Change

Eight Myths and Steps toTransform Your Organization

STEP  EIGHT

Myth‐• Not Anchoring Changes in the Corporation’s Culture 

Step to Transform‐• Institutionalizing New Approaches

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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 LawCreative Company

Peop

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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

Learning Assessment Questions & Answers

Please refer to the NHIA Annual Conference & Exposition 2012 On‐Site Program for a brief 

post‐test.

francis@battistinetworks.com

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