By: Greg Bartlett

Six critical guidelines to build (or rebuild) and support the top management team

For two years researchers Nathan Bennett and Stephen A. Miles were involved in a project focused on identifying keys to top management team success. In the process, the men had the chance to study the struggles of a number of post-merger and -acquisition executives as they labored to come together again in the new enterprise as a top management team. Through that research, Bennett and Miles identified six critical guidelines to help executives and boards effectively build (or rebuild) and support the top management team. The first three recommendations focus on activities that should start very early and be continually reinforced throughout the process. The fourth and fifth recommendations concern challenges that will be most pressing during the integration process. The final recommendation involves activities that should begin as soon as legitimately possible and become habitual as the new entity develops.

Guideline 1: Reduce role ambiguity.

Though M&A is often defined as adding technology, products or market share or achieving synergy, it is inescapably about people and their capabilities. The combined company must do what it can to control which employees leave and remain. Many potential “ship-jumpers” are vital to both the team and organization.

Guideline 2: Due diligence around talent is a dangerous corner to cut.

The second vulnerability management teams face in M&A reflects a naivete caused by inadequate due diligence around talent management. Sufficient attention should be given to assessing the personnel who will lead the new enterprise.

Guideline 3: Recognize that old habits die hard, but not all should.

Companies have well-established routines that are retained because, simply put, they work. There is an art to recognizing how habits serve different groups, how habits impact performance and the role they will play in the newly formed company.

Guideline 4: Don’t tolerate bad behavior.

The research revealed three common forms of harmful behavior in top management teams: cliques, information asymmetries and the sabotage of decision making. Moving beyond this requires strong leadership and setting very public examples from the top.

Guideline 5: Practice patience with purpose.

The completion of an M&A event is a heady time, but the immediate enthusiasm needs to be bridled somewhat during the new entity’s break-in period. The toughest challenge here is to find the rhythm for pushing ahead that properly balances the need to respect the potentially fragile nature of newly forming relationships with the need to produce evidence of positive results.

Guideline 6: Count and celebrate your blessings.

Everyone associated with the deal is in a difficult situation. This is the time to repeatedly reinforce and communicate the upside of the deal: that there was a clear reason the deal was pursued.
Source: Nathan Bennett and Stephen A. Miles, “Six steps to (re)building a top management team,” MIT Sloan Management Review, Fall 2008, Vol. 50, No. 1.