The critical role of second-line leadership
Case study from PMI Mastery: Ensuring Deal Value
Atlantic M&A Partners
Two cultures
The acquirer operated as an "inverted pyramid". Responsibility and decision-making were pushed down: from the board to management, then from management to staff. Everyone owned outcomes.
The target, a corporate division, had a rigid top-down hierarchy where the plant leader made virtually every decision, including minor purchases. The eight-person management team below had decades of experience, but every major (and many a minor) decision needed the plant leader's approval.
The challenge that emerged
The main integration challenge was not the top leadership but the target's second-line management. Despite 15 to 20 years' experience, these managers were conditioned to seek approval for every decision. They had the expertise to run the business, but not the confidence to act independently.
Second-line leaders suddenly had to take on new decision-making responsibilities and unlearn years of learned co-dependence. Without addressing that, integration stalls: decisions slow, empowerment fizzles, and the acquirer's culture is frustrated, which causes conflict.
Top tip
When empowerment meets a legacy of top-down control, the bottleneck is rarely at the top.
Why culture mattered
Culture is not only a set of values; it includes the daily behaviours that drive how things get done. Here, culture change meant getting second-line managers to act differently: make decisions, take initiative, and stop waiting for permission. Values matter, but unless behaviours change, culture doesn't.
What changed it
The acquirer's CFO visited every three weeks, changed into plant gear and walked the floor: talking to staff, listening, and coaching the second line. He didn't just tell people about empowerment; he showed it and encouraged it on the job. Over time, the second-line leaders built confidence and learned to own decisions.
The lesson for M&A leaders
Second-line management performance was critical. Culture shifted through coaching that reinforced new behaviours. That change is not achievable through one-way communication or new logos and branding. Without focus here, the integration stalls, and neither culture functions.
My favorite definition of culture is from Robert Goffee: "the way we do things around here". I like the simple informality of the definition and its underlying sophistication that includes values, symbols, behaviors and assumptions. All must be in alignment when merging two organizations.