M&A integration are often the most complex, sensitive and risky programs that an organisation will undertake. In addition to this, the timescales are tight and inflexible, resources may be unmotivated and few people have the experience of this non business-as-usual process. For this reason, historically, many integration have failed to achieve their stated objectives, whether that was synergy capture, value creation or other goals.
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There is no secret to success, it is down to clear and agreed objectives, detailed and early planning, robust program management, executive sponsorship/ attention and the help or learning from someone who has done it before.
There are a number of key issues that crop up time and time again in M&A and the integration of companies, non-profit and governmental organisations. These should be thought about well before any purchase or merger takes place and includes:
The STRATEGIC DESIGN of the new organisation. What do the constituent parts look like today, and what it should look like one put together. There are a number of obvious answers that an experienced person can bring to the table. The complexity is compounded by the fact that there is often not a single jump to the end state, but multiple jumps. With everything moving at the same time a detailed plan will be needed.
No merger moves forward without there being good reason for it, these are often called SYNERGIES, and should be quantified with numbers, pounds, dollars or Euro. With accountability for each of them falling on the shoulders of an Integration Director and a business manager. The changes to enable the delivery of those additional profits as carefully planned alongside the stability of the businesses.
This high level plan rapidly turns into a detailed INTEGRATION PLAN and can be complex for those who have not done it before. The plan will cover all the functions, business areas, geographies, products, customers and suppliers. As well as answer all questions coming from stakeholders and planning the change – to deliver the increased profit or reduced spend (short term or long term) that is required.
There will be an INTEGRATION MANAGEMENT OFFICE, to kick off planning, set up work-streams, resource projects, set up governance for the integration, report on projects and track synergies.
Often organisations have an M&A INTEGRATION PLAYBOOK, (or buy one off the shelf) which means as they kick off a deal, they will not be starting off from a blank piece of paper and groping around in the dark. Starting with a set of tools and checklists, helpful slides and knowledge, enables a faster kick off and so faster delivery of the profits, as well as ensuring less mistakes are made. It will always include a LESSONS LEARN section which helps people understand what mistakes have been made elsewhere and so smooth the way.
Everything is interconnected, and ensuring good communication between those planning the integration, the functions and those delivering it, is a key factor in success. Clearly there are a multitude of complexities to a deal and how integration fits in with all the other parts.