M&A Integration Manager
The role of Integration Manager (IM) in M&A is a challenging but fascinating job. It calls for a versatile, multiskilled person who possesses executive muscle and strong leadership ability. The role is ambiguous and sketchy at first, so the IM must be able to take charge and bring order to an undefined, very fluid situation where a lot is at stake.
PRITCHETT’s 40+ years of merger integration experience have taught us the seven key attributes needed for IM success. These are defined below, along with a rating scale for each of the traits to permit an easy and systematic evaluation of a potential candidate.
An M&A Integration Manager is responsible, with assistance from the Steering Committee and Integration Management Office, for developing an integration strategy, planning integration activities, deploying plans, conducting regular integration team meetings, tracking progress, reporting results, and documenting the lessons learned from the integration.
The Integration Manager should be a dedicated, full-time, on-site resource from the acquirer who should be appointed to the project no later than two weeks prior to Announcement and actively involved in the project until at least 120 days post-close.
You have a company in play. There’s a lot of money at stake here. People are watching. And you’re under the gun to make it work. A few months from now you’ll be the hero or the guy they hang. Perhaps you think the M&A integration will be one of the most complex projects you have ever tackled. And you are worried because you are already stretched pretty thin and short on resources.
What’s going through your mind?
The more you mull over the merger, the more questions you have. The unknowns bother you like a swarm of aggressive mosquitoes on a hot, summer evening:
- Is the integration budget too tight?
- Are deadlines too aggressive?
- How long will it take integrate systems …
Post-Merger Integration Teams & Roles
- NewCo Vision
- Guiding Principles
- Steering Committee: Roles and Responsibilities
- IMO: Roles and Responsibilities
- Team Leads: Roles and Responsibilities
- Integration Manager: Selection Criteria
- Steering Committee: Key Planning Deliverables
- Integration – Weekly Meeting Process
Two letters, one from the CEO and and the other from the Integration Manager, emailed to team leaders that provide information on the role of team leaders, the hierarchy of teams, the mission, team guidelines, synergy targets, scope of the integration, meeting schedule, and team launch meeting.
The Integration Management Office (IMO) consisting of some three to five full-time people, is the real workhorse responsible for driving the integration forward and keeping good project-management discipline in place. One member of this team should be designated as the integration project leader and given the overall responsibility for the project’s progress.
As a whole, this team’s purpose is to provide the guidance and day-to-day decision making that will allow the integration process to move forward on a timely basis. This group also should include members of both organizations. A fairly balanced representation generally fosters better buy-in from the people in the two organizations while also improving the odds that plans for integration can be implemented effectively ...
Governance is the project management structure/hierarchy that helps ensure the integration is completed on time within budget and achieves its other desired goals. The proper amount of governance is a function of many variables including the complexity and objectives of the integration, and the level of integration experience of team members.
- Periodically solicit input from the integration manager and work stream leads on the decision-making protocols and the escalation issue process.
- Don’t over-engineer and develop a structure that slows rather than escalates the resolution of tough issues
- Periodically collect data on the effectiveness of the integration/project management process and document the lessons learned to improve governance procedures …
The Steering Committee is typically made up of two to seven senior executives from both companies. Members serve in an oversight role for the entire M&A integration by providing sponsorship, making key strategic decisions, and approving integration plans.
The Integration Management Office (IMO) is led by the Integration Manager, a senior executive in the acquiring firm. The Integration Manager is responsible for facilitating the work of the Integration Management Office, providing guidance and direction to the Work Streams, and reporting status to the Steering Committee. The Integration Manager will spend 80- 100% of their time in this role.
Integration Management Office Team Members ...
- Guiding Principles (Example)
- Integration Approach Overview
- Integration Team Structure & Phase Overview
- Integration Project Roadmap …
- Understand the journey
- Manage expectations… yours and theirs
- Learn to survive in no-man’s land
- Act like a consultant
- Adopt and go
- Don’t roll over and play dead …
Functional M&A Integration Deliverables
- Project Definition Document (for any projects not part of a program)
- Project Plans (for any projects not part of a program)
- Project Cost Estimate (for any projects not part of a program)
- Functional Integration Action Plan Template …
Presentation covers merger integration governance structure, responsibilities, meeting cadence and times.
- Provide strategic direction and ongoing guidance of the integration scope of work
- Discuss escalations, risks/issues, provide approvals and decisions, authorize changes to scope of work
- Ensure that all communications and messaging are aligned with executive priorities
- Encourage each team to identify gaps and takes steps to secure operational efficiencies ...
- What are the basic roles/responsibilities associated with programs and projects?
- What are the deliverables ...
- What HR integration initiatives will be corporate driven and do not need to be “solved” (only executed) in other plans?
- What Finance integration initiatives will be corporate driven and do not need to be replicated (only executed) in other plans?
- Are there any mandatory time parameters I should use for organizational structuring initiatives?
- If I have assigned another BU or Function to one of my initiatives what should I do? …
"The Integration Management Office brings all the processes: how you collaborate cross-functionally, how you address and escalate issues for resolution, how you report and update executives on status. The IMO drives the pace, tackles ad hoc issues, tracks progress, gets feedback, does after-action reviews. Essentially, the IMO is your home base for all integration activity ...
Confidentiality in M&A
- Our companies are still operating independently
- All work associated with the M&A integration teams should be considered confidential
- Please do not share details of our integration work outside this team
- The M&A integration lead team will coordinate communications to both organizations as needed throughout the process …
- Industry reports or analysis prepared by third parties
- General information regarding current products and services
- Historical aggregated financial data, including aggregate revenues
- Information regarding the organisation of systems and processes (e.g. "back office" systems and processes like billing, IT and accounting)
- General information on health, safety and environmental matters
- General information on corporate structure and the structure of management and personnel
- Information that is in the public domain
Clean Team ...
Acquirer and Acquired Co. legal teams determine if the data requested is:
- Non-Sensitive: OK for integration team to review
- Sensitive: giving a business a competitive advantage or influence
As we get near to closing the deal, data will get declassified …
Post-Merger Integration Tools
|Steering Com.||IMO||Funct. Teams||Synergy Owners||Accounting|
|Drives development of the overall integration plan including all the integration projects, communication plans, and achievement of synergy benefits||I||R/A||C||C|
|Defines and manages integration processes including functional work plan reviews, cross-functional collaborations, issue management ...||I||R/A||I||I|
- Integration Planning Calendar
- Team Leads Identified
- SMT Direction Finalized
- Communication Update
- Integration Kick Off/Process Starts
- Team Charters …
The IMO should make sure the various integration teams cycle through the same meetings at the same time each week. By adhering to a disciplined schedule, teams maintain focus and discipline. Otherwise, the integration may get de-prioritized and organizing meetings will become like herding cats.
The following meetings are on a set schedule: IMO, Sales, Manufacturing, HR, Finance, IT, Legal, Corporate, Carve Out Separation, Steering Committee, Shareholder Update, Board Meeting.
1. What key talents/strengths must members of the merger team possess?
2. What functions should be represented?
3. Who should be involved in the selection process of the team members?
4. Will special compensation or bonuses be given to the Integration Task Force members?
5. How long will each of the team members be assigned to the project ...
Communication and Confidentiality Guidelines
- The Integration Team Leader will be the point of contact to the Steering Committee as well as to the Task Force Leaders. The Integration Team Leader will meet with the Steering Committee each Tuesday at 9am in Bldg. 200, Conference Room A.
- The Integration Team Leader will report progress and escalate any issues/decisions that require senior-level input.
- Task Force Leaders and Task Forces will report to the Integration Team Leader every Friday through their weekly status reports. Reports should be emailed to the Integration Team Leader ...