Presentation delivered by Laura Queen, Former Vice President and Chief Human Resources Officer, G&W Laboratories, Inc. at the marcus evans Employee Benefits & Compensation Summit 2016 in Braselton, GA

1. Overcoming the Challenges of Merging
Different Corporate Cultures
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Laura Kellers Queen, EdD
Former VP and CHRO, G&W Laboratories, Inc.
HR Strategy and Innovation Summit, January 21-23, 2016

2. The Current State of M&A
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 M&A activity reached a new high in 2015 – 7,500 deals worth $4.5
trillion USD, volume up 8% since 2014, deal value up 37%, eclipsing
the record set in 2014;
 Mega deals (valued at $10 bil+ USD) were up 130% in 2015;
 Announcement effects for acquirers has been positive for the first
time ever;
 New deals are seen as “cross-selling, creating new customer
opportunities, and transformation”;
 “Companies may also be getting better at integration and capturing
deal synergies”.
McKinsey & Co, M&A 2015: New Highs and a new tone, December 2015

3. 50% - 90% of Deals Fail to Achieve
Expectations
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… all too often from a startup’s perspective, the good news is that
entrepreneurs, option-holders and investors cash out, but the bad news
is that the employees find themselves in an oxygen-starved
bureaucracy and the startup’s customers end up confused or even
orphaned. And from the acquiring company’s perspective, it’s all too
common for the business advantages they sought – some combination
of access to new products, access to new markets or geographies,
market share increases, growth faster than purely organic growth,
and/or economies of scale – to simply fail to materialize.
Jim Price, University of Michigan (2013)

4. Share your Experience
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 On a scale of 1 – 10 (poor –to- smashing
success) rate your M&A experience(s).
 Share among your table groups, “What
contributed to your experience(s)? +/-
 Are there common themes at your table?

5. Why Deals Have Failed
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 Misreading the new Company’s culture;
 Communication – not clearly or enough, or the right
mechanism;
 Sub-optimal relationship building across combining
organizations;
 Lack of focus on Identification and retention of key talent;
 Lack of strategic alignment;
 Wrong motivations for the deal;
 Valuation or deal structure is off;
 Unmanageable growth;
 Integration for the sake of integration;
 Focus exclusively on synergy targets
 M&A capabilities are not strong enough

6. Importance of Culture
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“Culture is…highly significant for how companies and
other organizations function: from strategic change, to
everyday leadership and how managers and
employees relate to and interact with customers as
well as to how knowledge is created, shared,
maintained and utilized.”
(2007, Mats Alvesson)

7. Culture
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The underlying values, beliefs, assumptions,
shared meanings, myths, stories, legends,
artifacts and symbolism of groups, teams and
organizations. Efforts aimed at
understanding organizations using traditional
methods of due diligence and asset valuation
don’t approach ‘culture’ deeply, if at all.

8. Artifact (or artefact): [ahr-tuh-fakt] (noun)
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a man made object that has some kind of cultural significance

9. Strengths/Capabilities-Based
Approach
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Enhance the breadth of assessment to include strengths,
capabilities, and opportunities for maximizing deal outcomes AND
puts people at the center of the process
The approach:
1. Builds relationships;
2. Improves communication;
3. Unlocks the core strengths, capabilities and opportunities to
leverage for enhanced deal value;
4. Creates opportunity for learning, transparency and trust.

10. Diagnostic Methods
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• Appreciative Inquiry
• Organization Network Analysis
• Talent Assessment
• Storytelling and Narratives
• Sentiment Analysis
• Employee Engagement Surveys
• Culture Analysis

11. Appreciative Inquiry
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“Appreciative Inquiry focuses us on the positive aspects of
our lives and leverages them to correct the negative. It’s
the opposite of ‘problem-solving.”
White, T.H. Working in Interesting Times: Employee morale and business success in the information age. Vital
Speeches of the Day, May 15, 1996, Vol XLII, No. 15.

12. AI Outputs: Strengths and Opportunities
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 Cohesiveness: “Everybody here wants the best for all
departments – we are accountable to each other – we
are all in this together and we are transparent with our
communications – dirty laundry and all. We do whatever
we can to keep things running/working.”
 Internet Speed: internet speed is slow at the site and
requires that staff members travel to another operating
location, 10 miles from here to participate in webinars in
order to get speeds fast enough to stream video/audio

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Leveraging the Output

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Weekly Communication Briefs: Each week a set of
communication briefs was posted/distributed to the leadership
team and all of the newly acquired employees addressing items
of concern and employee questions.
• I am enrolled in an Employee Stock Purchase Plan (ESPP) with [former
Company], what will happen with this program?
• Will we get new uniforms with the [New Company] logo?
• Will we still have the ATM machine at our location?
• Will [New Company] allow smoking on our campus?
• What will happen to my salary/wage after the end of “continuation
period”?
• Will we continue to receive recognition (cakes and reward checks) for our
service anniversaries?

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 Unit showed a 40% reduction in historical
backorders, and an increase in production capacity of
120% in the first 90-days post-acquisition;
 99% employee retention rate in first 90-days post
acquisition;
 First product launch under new ownership occurred
within 7 months of closing;
 Completed first year-end $2.2mil+ to plan
Operating Unit Performance Bonuses vs.
Retention Bonus Program

16. 16
Comprehensive history and values program designed using
participant facilitated learning map technology. Deployed to all
newly acquired team members within the first quarter post-
closing.

17. 17
Following this conference…
• How might your approach to M&A integration change?
• What are you most excited to try?

18. 18
Dr. Wayne Dyer
If you change the
way you look at
things, the things
you look at change.