My friend and colleague, Jack Prouty, President of the M&A Leadership Council, has diagnosed and resolved one of the most perplexing challenges confronting every acquirer: how to effectively and efficiently “bridge the gap” between the transaction and due diligence phases of the deal and integration. How big of an issue is this? Huge!
One typical and frustrated acquirer characterized the challenge this way: “Our leadership team planned too late and announced too early. After launch we ended up spinning our wheels for several weeks while the division heads sorted out the big issues we needed as essential inputs to our integration planning efforts.” However, if you get this component right, you can stabilize both buyer and seller organizations; demonstrate credible, competent and persuasive leadership; and, immediately put your integration effort on the fast-track to success.
"Executives get put in the no-win situation of having to repeatedly say 'We don't know that yet' to myriad questions from customers, employees, analysts and investors.”
Without a specific strategy to bridge the gap, what tends to happen is a tremendous loss in translation among solid deal logic (strategy and business case), the detailed understanding of the target company gained during the due diligence phase and the timely directional guidance needed for integration. The results? The biggest and most important issues and decisions often get put on the back burner. Integration teams make assumptions not aligned with deal logic, strategic objectives or diligence findings. Executives get put in the no-win situation of having to repeatedly say, “We don’t know that yet” to myriad questions from customers, employees, analysts and investors. In other words, value starts eroding – often beginning on the day of announcement -- due to delay, ambiguity and poor planning.
Jack’s solution, the “Game Day” is based on a career of superb strategic advisory to the best in virtually every industry and is among the most important practices we have adopted at M&A Partners, and among the most highly rated concepts we teach at the Art of M&A Integration workshops sponsored by the M&A Leadership Council. Key components of a successful Game Day include the following:
- Who: Top executives of the buyer organization, supported by key deal team and integration team leaders. Typically, subsequent sessions are conducted with the key target company executives.
- When: At the earliest possible opportunity when it is certain that the deal will close. Ideally, before initial public announcement, or as a fallback, immediately thereafter.
- What: Tackle the biggest decisions, issues, risks and opportunities first. Establish the overall integration approach, objectives, timeline and resources. Confirm essential cultural and communication messages. Get all senior leaders aligned.
- Why: Ensure timely strategic “directional guidance” to launch integration, align decisions and deliver results.
The document Bridging the Gap Between Transaction & Integration illustrates more of our viewpoint on this important practice.