Making the Main Thing the Main Thing

Understanding the concept of Deal-type DNA (introduced in my last blog, Aug 19, 2013) 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 (see my blog, Aug 5, 2013). 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.

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 in my last blog that led to epic failure.

The attachment linked here (Integration Investment Thesis Guides Strategic Framework) illustrates this approach. Each deal-type has 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 on 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 in May 2010, “Integration is easy to conceptualize, but very difficult to execute.”

There is one caution on slide 2, column 3 in the linked attachment. This is for illustration purposes and is a placeholder for you to fill in. Each different “integration investment thesis” should result in specific and customized guiding principles and each will result in different implications for integration decisions in every area from organization and roles to functional processes to core operations, go-to-market strategy and culture.

Photo:  uscoinstoday.com

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About the Author:  Mark Herndon is President of M&A Partners LLC.  He specializes in a broad range of strategic and business effectiveness initiatives, including M&A strategy, due diligence and integration management; financing and capital formation; strategy formulation and execution.  Mr. Herndon is the co-author of The Complete Guide to Mergers and Acquisitions: Process Tools to Support M&A Integration at Every Level, (John Wiley / Jossey-Bass Publishers), which has been translated into five languages and is used as a foundational guide for various consulting firms and university programs.