How to Conduct the M&A Operating Style Analysis and Operating Style Analysis Inventory Template

The Integration Team conducts the Operating Style Analysis in order to understand the similarities as well as differences between the two companies that will be a barrier to integration. You may wish to outsource the interview process. If not, select one team member who is highly trusted and regarded to conduct the interviews.

How to Use

  1. The Integration Team, with input from the Steering Committee if required, determines who will be interviewed. Select individuals representing a cross section of the management team and/or organization.
  2. Draft a memo to the selected individuals. The memo should be authored by an Executive Team or Steering Committee member. Include in the memo:
  3. An explanation—the reason why you are conducting the analysis.
  4. The issues to be covered in the interview. Ask individuals to spend some time reflecting on the issues.
  5. Confidentiality notice. Emphasize that discussions will be held in strict confidence.
  6. Encouragement to be candid, forthright, and specific in offering their opinions.
  7. Set appointments with selected individuals. Interviews may be conducted in person or by telephone.
  8. Conduct each interview, using the interview questions listed below and the Operating Style Analysis Inventory template as your guide. Adhere closely to the same sequencing of questions during each interview. Interviews should follow a consistent question protocol, yet allow each individual the opportunity to discuss issues s/he considers important.
  9. What are the defining characteristics of your organization?
  10. What is distinctive?
  11. What differentiates you from other organizations?
  12. What aspects of the way your organization operates contribute most to its success or effectiveness?
  13. What characteristics of the way your organization operates most hamper or interfere with its ability to compete?
  14. What do you see as the organization's operating strengths?
  15. What are the weaker points in your organization's operating style?
  16. What critical differences can you identify in the two companies' operating style; issues that are most likely to interfere with operating results?
  17. What key similarities do you see in how the two organizations operate?
  18. What are the common qualities that make people successful in this organization?
  19. What behaviors does the organization reward?
  20. Take detailed notes. In addition to narrative data, you may have individuals give ratings or yes/no answers to specific questions, especially questions on the inventory.
  21. Following the interviews, summarize the data. Things to consider include:
  22. Using the inventory allows you to make side-by-side comparisons of each company.
  23. Issues can be rank ordered. Use a 10-point scale with 10 being the most positive rating for a particular issue.
  24. Yes/no questions, and those questions asking for details, can be scrutinized for specific differences between companies.
  25. Prepare the report with the following sections:
    I. Data Gathering Process
    A. Interview Format
    B. Quantitative Data
    II. Executive Summary of Operating Style of Each Organization
    A.By Factor - Graph
    B. By Individual - Graph
    C. Individual Rankings
    III. Overview and Key Findings
    A. Current State of Both Organizations (more detailed than Executive Summary)
    B. Key Finding #1
    C. Key Finding #2, etc.
    IV. Potential Barriers to Integration
    A. Barrier #1
    B. Barrier #2
    V. Recommendations
    A. Recommendation #1
    B. Recommendation #2, etc.

Time Required

Interview sessions may range from 30 minutes to two hours, or it can be conducted as a facilitated session with a selection of functional/operational individuals.

Materials Required

  • Interview questions
  • Operating Style Analysis Inventory template
  • Pad and pen for note taking

Template—Operating Style Analysis Inventory

Operating Style Analysis

Inventory

Operating Style Component /

Company A

/

Company B

COMMUNICATIONS

Does a dedicated function exist?

Primary Means – Rank Usage:
Email
Voicemail
Memo
Face to Face
Telephone
Is it structured or adhoc?
Do informal communication channels exist?
Are communications open and candid?
How strong is the grapevine?
Does the company have an intranet?

Two-way Feedback

Is feedback solicited?

In what ways is it solicited?

Is the program formal or informal?

Management Team Communications
How frequently do formal meetings occur?
How frequently are meetings spontaneous?

DECISION MAKING

Financial

Are decisions made at the employee or management level?
How many approvals are required?
How does expense approval occur?
How many have capital spending signing authority?
How are salary decisions made?

Business Related

How are new markets and products decisions made?
Is there autonomy in business areas or is it tightly controlled?
EMPLOYEE DEVELOPMENT
Where are hiring & promotion decisions made?
Does a performance review occur?
Is it an effective exercise?
Is a high-potential development plan in place?
Is a mentoring program in place?
Does a succession plan exist?
Are competency models employed?
Are job descriptions accurate and current?

Is a training program in place?

What is the average investment per employee?

Is it primarily technical or soft skills training?

Is professional development a priority?

WORK ENVIRONMENT

Are the offices utilitarian, ornate, or practical?

Which best describes the space: offices, cubicles, open space, teaming areas?

Is it an environment with open or closed doors?

PERFORMANCE MANAGEMENT

What metrics are employed to measure the business?

Is a Management Incentive Program in place?

Is management incentive tied to company performance?

Are managers rewarded on results?

ASSET UTILIZATION

Are people provided the necessary resources?

What is the justification process for new resources?

Are the tools stateof the art, average, or weak?

Are the staffing levels appropriate?

Are the control mechanisms loose, tight, non-existent?

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