M&A Lessons Learned | Integration Errors

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Post-Merger Integration Audit

A Post-Merger Integration Audit answers key questions about the last acquisition:

How were the events, decisions, communications, and actions surrounding the merger handled?
What could have been done differently to make the integration easier?
What additional actions remain unfinished?
How have shareholders, customers, and employees perceived the merger?
If the company were to merge/acquire again, what should be done differently?

Approach:

Determine the depth of review required
Interview or conduct written surveys with executives, managers, employees, and if appropriate, customers and board members …

Post-Acquisition Employee Survey

Survey includes twenty-one questions for employees in the following five categories: Demographics, Merger Announcement, Between Announcement and Close, During the Integration, and Overall.

Demographics/General

1. Were you employed by the Acquirer or the Acquired Company before the acquisition?
2. Had you ever been through another merger before this deal?
3. What was your primary location at the time of the announcement?
4. Have your job duties changed significantly since the closing of the deal?

Regarding the Announcement of the Acquisition

5. How and when did you receive formal notification of the deal …

Hard Proof M&A Gets a Bum Rap

This webinar challenges the conventional wisdom that M&A is a loser's game.

M&A Gets a Bum Rap, reveals:

How a minority of buyers generate the majority of M&A losses
Who has created the myth that most mergers fail
What five characteristics are shared by buyers that incur titanic post-merger losses
When acquirers typically make the best and worst deals
Why post-merger losses are often due to the very problems executives anticipated rather than the acquisitions themselves
Why “glamour acquirers” tend to perform poorly after their deals
How a merger can fail on paper, but not actually be a failure
Why extreme positive or extreme negative M&A research results are not credible
Why blanket assertions about M&A failure rates are not based on sound logic
How the AOL/Time Warner merger, widely regarded as one of the worst mergers in history, actually benefited AOL shareholders

Day 90 M&A Integration Review

9 Slides

Methodology

All Team Leads were interviewed; answers were aggregated and kept anonymous
Output was organized by topic into recap slides for each question
Questions were centered on broader “Newco” topics …

The 10 Most Common M&A Integration Mistakes

11 Slides

# 1: Lack of Pre-Planning: When integrations fall short of their objectives, inadequate pre-close planning contributes to the failures more than half of the time.

# 2: No Formal M&A Integration Strategy: Acquirers should define a clear integration strategy early and before their teams begin to develop plans ...

Results of Surveys Completed by Acquirers on M&A Integration

16 Slides

In retrospect, should your company have managed your last integration faster or slower? 84% responded faster
Is the compensation scheme of integration team members linked to M&A integration goals? 41% responded Yes
Who conducts post-mortems and document lessons learned on transactions? 61% of successful acquirers …

Post-Merger Integration Assessment

21 Slides

M&A Integration Assessment Project Objectives
-   Gain insights into Acquirer executives’ experiences with respect to past and current integration practices and results to date
-   Incorporate the perspective of acquired company personnel
-   Use the assessment learnings to inform the development of an integration approach and improve competency in M&A integration …

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Which M&A Integration Mistake is the Most Common?

55 seconds

"If no formal integration oversight authority is established ... if there is no Integration Management Office (IMO), there is likely little planning accomplished before close. When integrations fall short of their objectives, inadequate pre-close planning typically contributes to the failures."

Who Should You Interview and What Should You Ask to Capture Lessons Learned?

1 minute 23 seconds

"Initiate a formal process to collect feedback from IMO participants, acquired company employees, senior management, IMO team members, employees (both companies), and consultants involved in the integration.

In particular, facilitate a “Lessons Learned” meeting with IMO participants and functional leads and ask these questions ..."

Integration Survey and Results

21 Slides

Each person was asked to rate twenty-one statements from 1 to 5

I understand the reason for the merger
I think the merger will be good for the business
I have a good understanding of the company's goals and direction
I know how the company is performing …

Example of a Lessons Learned Report and Lessons Learned Report Word Template

The two-page document is an example on the data collected by The Steering Committee, Integration Team, and Task Forces about what went well during a merger and what should be changed for the next Integration. The two-page Lessons Learned Word template is also provided.

On chartering the team(s)
Review the Charters semi-monthly to ensure Task Forces are consistently on track

On creating, reviewing, and approving Detailed Project Plans
Include fewer people in the review process (it took too long) ...

Save Lessons Learned: Post-Merger Integration Best Practices Tracking Tool

The Steering Committee, Integration Team, and Task Forces collect information about what went well and what should be changed during the next Integration. This meeting should be conducted before the Integration teams have disbanded. Lessons Learned should be fed back to the next Steering Committee and Integration Team for the next Integration Planning effort.

Two-page example and two-page PDF template.

Post Acquisition: Customer Survey and Letter

About 100 days after Close, it’s a good idea to take the temperature of the two companies’ customers. Chances are they may have experienced some turbulence caused by the transition. They’ll probably appreciate a little special attention at this point, so it certainly can’t hurt to touch base and find out if they’re experiencing any problems that you might not otherwise be aware of.

It may be uncomfortable to go looking for bad news, but it’s even worse if customers have a problem with your business and don’t tell you about it. It’s up to the seller to keep the lines of communication open. A survey is one way to promote a dialogue with customers and give them an opportunity to tell you how well the combined organization is meeting their needs …

Step 11: Capture M&A Integration Lessons Learned

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