Vital: A Tightly Managed Process with Disciplined Teams on Both Sides
By Mark Herndon, Chairman Emeritus, M&A Leadership Council
In Don’t Fumble at the Goal Line, we discussed how to finish strong by making sure you are using seven key strategies for ensuring a successful handoff from due diligence to integration. Here’s a quick litmus test to help you determine how you are doing at strategy #6 “Master the Art of Integration Launch.”
"Many organizations, though, are still notifying teams via email to start their checklists (wrong answer!) or allowing each team to do their own thing. Can you say 'chaos'?"
When do you launch integration?
The clear best practice in most scenarios is to begin immediately post-announcement and as far in advance prior to closing as possible. Noted exceptions include many smaller private company deals and technology oriented deals with a high level of competitively sensitive intellectual property. But even in these special circumstances, the reality is you need time to make key decisions and plan for an effective Day 1 and employee onboarding.
Possible alternatives to consider in these types of special circumstances may include the following:
- Delaying the actual announcement while accelerating key integration decisions to enable an immediate closing simultaneous with or right after announcement
- Relying on a transition services agreement
- Agreeing on a minimum required planning window post-announcement prior to closing.
Whichever approach you choose, you’ll be better off to engineer as much of a pre-closing planning window as possible.
Do you designate “fast track teams” to launch ahead of the main effort?
Certain functional teams, special project teams or business units will always have a disproportionate amount of pre-work than others. Many skilled acquirers designate certain fast-launch teams or sub-teams to spearhead the initial efforts required for closing, Day 1, network access, email connectivity, initial employment onboarding and similar “enabling” actions to ensure maximum productivity from the outset. HR, IT, communications are common fast-launch teams. Also, don’t forget to fast-launch groups of key leaders, SMEs and change agents who will be needed in unique roles immediately upon the full integration getting underway.
Do your integration team charters adequately provide direction, focus and immediate traction?
Project team management 101 includes the use of task force “charters” to identify scope, timing, objectives and other requirements for success. However, we still see far too many organizations throw blank charter templates at their integration teams, causing them to lose lots of time and substantial traction just trying to figure out what to put in the template. Our viewpoint? This is the integration leader’s job along with the integration management office (IMO), and the linchpin between due diligence and integration.
Coordinated vs. “shotgun” start?
Your charters should always include a fully completed list of objectives, target outcomes, priorities and tasks. Much of this comes directly from the business case for the deal, and includes essential findings from the due diligence effort. If you do your part right, teams should be able to get their arms around a charter and their assignments in one work session and have additional requirements, questions, data requests or clarifications back to the IMO for an immediate response.
When we work with organizations on M&A capability development projects, we routinely look at how the integration effort gets launched. If you insist on launching integration teams through a coordinated and tightly managed process, you win! Many organizations, though, are still notifying teams via email to start their checklists (wrong answer!) or allowing each team to do their own thing. Can you say “chaos”?
Even high deal-count acquirers have much better, faster results when they insist on discipline in briefing all teams (including integration leaders from both buyer-side and target company) through a coordinated process that clearly communicates deal strategy, integration framework decisions, key outcome objectives, integration priorities, process and planning requirements – and please don't leave out the essential “get to know” and skills-building priorities.
There are many successful strategies for mastering the art of integration launch, and our downloadable resource, Master the Art of Integration Launch, provides a few ideas for your consideration.
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