Making the Main Thing the Main Thing

Mark Herndon headshot
By Mark Herndon
Chairman, M&A Leadership Council
Aug 3, 2016

Understanding the concept of Deal-type DNA as a means to avoid epic integration failure is really just part of the equation. Another mission-critical aspect is based on the role of the buyer, as discussed in Failure Can Occur at Any Phase of the Process. Before we can establish the integration strategy framework, we have to determine how we will create value from the acquired business. Taken together, Deal-type DNA and the buyer’s strategic role (i.e., “what will we do with it and how?”) form the basis of the integration investment thesis. Ideally, these two strategic considerations should fit together and be in alignment like two sides of the same coin.

"Integration is easy to conceptualize, but very difficult to execute."   

It follows then that the answers to these two guiding questions should point to a specific type of integration or overall template for each specific deal. Notice I did NOT say “cookie cutter.” There never is such a thing. Everything is situational. Everything must be validated against the specifics in each deal. But at least you start with solid directional guidance, as opposed to the situations we discussed last week that led to epic failure.

The downloadable resource, Integration Investment Thesis Guides Strategic Framework, illustrates this approach. Each deal-type has a unique and distinctive DNA code which represents the principal strategic purposes you were interested in pursuing in the first place. If that’s the “main thing,” now it is up to you to make the main thing the main thing by identifying and executing those actions that enable you to create maximum value with what you just bought. Sadly, far too few organizations get this right. As United Airlines CEO Glenn Tilton said upon announcement of the United-Continental deal on May 3, 2010, “Integration is easy to conceptualize, but very difficult to execute.”

There is one caution to keep in mind regarding slide 2, column 3 of the downloadable pdf: it has been partially filled in for illustration purposes only. This serves as a placeholder for the implications of your unique integration. Each different “integration investment thesis” should result in specific and customized guiding principles. Each will result in different implications for integration decisions in every area from organization and roles to functional processes, core operations, go-to-market strategy and culture.

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