An Early Christmas Present

Mark Herndon headshot
By Mark Herndon
Chairman, M&A Leadership Council
Mar 8, 2017

I promised myself I wouldn’t peek at the survey results until we closed the response window. I admit it, though, I just now ripped the preliminary data open like a kid’s first present on Christmas morning. WOW! I am very encouraged by the data, and very appreciative to all of you that have provided your input and experiences to this important analysis. 

"Follow a framework, have a playbook that is actively managed, keep discipline in your processes and establish a strong project management capability."

For now, let me share a few observations from just one question…consider this my early Christmas present to you. One of the open response questions asked, “What breakthrough practices or lessons learned, if any, have enabled your company to be more consistently successful at integration?”   Responses consistently fell into one of these five major thematic categories:  Resourcing & Governance – with by far the most responses; Integration Strategy Framework; Integration Process; Change Management; and, Internal M&A Capabilities.

Each of the last four categories had roughly the same number of overall responses. Representative comments for three of these categories are summarized below, followed by a general conclusion that I believe can be accurately deduced from the combined data set.

Integration Strategy Framework

Representative Comments:

  • Not all integrations are the same. Understand the deal value proposition before deciding the integration plan
  • Must have clear expectations of the integration success criteria, pre-deal. Must link the integration to deal strategy and use deal scorecards
  • Recognize and improve on the marketing and sales of the integrated company to take advantage of the benefits that can be achieved by customers

General Conclusion:  Many respondents commented on the importance of conducting a Game Day Integration Strategy Framework session, or a similar process to address these issues. (For more information, see “Bridging the Gap.”)

Resourcing & Governance

Representative Comments:

  • Make sure the integration process is structured, streamlined, disciplined and tightly interwoven with the business development group. Get integration involved in the initial deal process to discover and address (plan) for issues early in the process
  • Use a full-time dedicated integration manager and IMO. Integration function team members should include some from the due diligence effort and target-side resources
  • The core team should consist of key leaders in every functional area that are dedicated 50-100% to the effort
  • Speed of decision making on the buyer-side; plan intensely right after announcement
  • Use the most experienced resources at every role, from integration leaders, core team and consultants, to team members that have experience with multiple deals

General Conclusion:  Resourcing issues continue to be one of the greatest obstacles to success. More on that in subsequent issues. Many organizations are redefining rigid functional or deal phase roles to more of a comprehensive end-to-end process responsibility, with accountabilities all the way through to achieving business results of the integrated entity. (For more information see “Don’t Fumble on the Goal Line.”)

Internal M&A Capabilities

Representative Comments:

  • Recognize that due diligence is the first phase of integration. At least 50% of all our due diligence activities are integration focused rather than deal “go/no-go” focused
  • Follow a framework, have a playbook that is actively managed, keep discipline in your processes and establish a strong project management capability
  • We can’t say that we have breakthroughs, but we learn from each deal and work hard to improve the processes with each deal
  • Build an “M&A culture” and a strong, dedicated core team if you are going to do this repeatedly

General Conclusion:  M&A is a business process and an enterprise competency that must be thoughtfully built over time. Investing now in the overall process, skills / viewpoints and resourcing will accelerate and multiply your results.

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