M&A Integration Review 90 Days Post-Close

Agenda

• Merger Integration Report Card – 1st 60 Days
• Survey – Concerns Raised
• Next 60 Days: Integration Challenges
• Recommendations from Managers
• Executive Dilemmas
• The Tough Questions
• Recommendations for Next 90 Days
• Next Steps

Merger Integration Report Card – 1st 60 Days

Rate on a scale of 1 (Poor) to 5 (Excellent) the following areas:

1. Integration Progress/Success       
2. Customer Satisfaction   
3. Operating Results/Stock  
4. Resolution of “Individuals’ Issues”  
5. Management Structure   
6. Communication                                            
7. Retention of Talent  
8. Cultural Integration 

Survey – Concerns Raised

• Lack of communication
• Culture clash
• Lack of clarity on management structure
• Product overlap
• Different business models
• Site closures
• Relocations

Integration Challenges

• Operationalizing decisions made in 1st 90 days
• Culture conflict
• Loss of talent
• Process dysfunction
• Burnout and checkout
• Old style management in a new and different organization
• Failure to put “aces in the right places” (performance problems)
• Honeymoon ending
• Financial pressures as synergy target dates approach

Recommendations for Managers

• Communicate more
• Reconcile the culture differences
• Announce a permanent management structure
• Reconcile product overlaps
• Decide on a common business model
• Announce which sites are going to close and when
• Resolve the open relocation issues

Senior Executive Challenges

• Tough decisions, no easy answers, and it’s lonely at the top
• What’s right for the customer vs. what’s needed by the organization
• Management styles = success for the old businesses, but what style is needed for the new business? 
• Executives have different stakeholders than the rest of the organization (i.e., the board, the street)
• Two approaches to decision making
• Two business models

Tough Management Questions

• Do you really know what you want your business to be and have you clearly communicated that to the rest of the organization? 
• Are you willing to adjust to what the organization needs for success, or do you want the organization to continue to adjust to you? 
• Do you have the stomach to make some really hard decisions and stick to them? 
• Are you willing to create the culture the organization needs to be and hold people accountable for our values? 

Recommendations for Next 90 Days

• Firm up senior management structure
• Design a thorough communication plan
• Define concrete actions for integrating the two cultures
• Resolve product overlaps