Videos: A Q&A on M&A

The Who, What, When, How, and Why of Merger Integration

The 31 videos are organized under the steps of the world-class M&A integration methodology taught in PRITCHETT's Merger Integration Certification Workshop

PRITCHETT Merger Integration Certification Workshop Attendees and Website Subscribers can access all the videos. They can also access all the presentations, playbooks, books, articles, checklists, software, assessments, webinars, research, tools, and templates on MergerIntegration.com.

Step 1: Define M&A Integration Strategy and Guiding Principles

What Are M&A Integration Guiding Principles in Area of Preparation?
What are the M&A Integration Guiding Principles in the Area of Preparation?

3 minutes 27 seconds

"Guiding principles are established at the C level. You’ll leverage your guiding principle slide for the duration of the integration ...

  • Follow a balanced, robust “due diligence” process that examines both financial and operational issues.
  • Start integration planning during due diligence, preferably at least 60 days before close ..."
What Guidelines Should Integration Managers Follow?
Two Guidelines M&A Integration Managers Should Follow
Free
1 minute 46 seconds
  1. "Don’t try to solve world hunger." A lot of problems aren’t integration work. Make sure the scope of the integration work is well-defined. And don’t go outside it because you will not have the time or resources to tackle non-integration activities ...

Step 2: Determine M&A Integration Governance

How Should You Select the Right M&A Integration Leader?
How Should You Select the Right M&A Integration Leader?

2 minutes 3 seconds

"I’ve seen people that are very great in some areas but they struggle with ambiguity. And when doing IMO work, there’s a ton of ambiguity, especially early on. If you have somebody that’s just kinda freezing because they must have clarity before moving forward, they will struggle. You need people with a high tolerance for uncertainty."

What is the Role of the IMO (Integration Management Office)?
What is the Role of the IMO (Integration Management Office)?

2 minutes 54 seconds

"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 ... 

What Are the Five Types of Integration Strategies?
What Are the Five Types of Integration Strategies?

1 minute 43 seconds

1. Autonomy: Acquired company retains its independence

2. Best of Both: Additive from both sides

3. Transformation: Both companies find new ways of operating ...

When Should You Use M&A Integration Consultants?
When Should You Use M&A Integration Consultants?

1 minute 25 seconds

“If your people are stretched thin, if they have limited bandwidth or do not have much integration experience, then a consultant can be very useful. Experience is very important. It’s hard to get good at something when you’re do it infrequently. It works best is if you bring in consultant in early to set up the integration structure and processes ..."

 

Step 3: Conduct Joint Integration Management Office (IMO) Meeting

What's Included in an M&A Integration Charter?
What's Included in an M&A Integration Charter?

2 minutes 51 seconds

Charters define baseline expectations.  

Examples of information that might be included in a charter:

  • How integration support will be managed out of the COO office
  • How the integration support time frame will begin 30 days pre-close and average 90 to 120 days post-close for the majority of workstreams
  • Utilization of integration playbook (assuming the company has one) as the foundation for integration planning
  • Project constraints like earn-out timing and resource availability, etc....

Step 4: Provide Post Merger Integration Training

What Are Several Best Practices for Synergy Program Management?
What Are Several Best Practices for Synergy Program Management?

1 minute 13 seconds

"Consider motivating work stream employees with incentives whenever possible. This might require adding incentives to the overall IMO budget. 

The IMO should make sure costs are not shifted to other parts of the business. That is not a synergy ..."

 

How Should an IMO Support Synergy Tracking?
How Should an IMO Support Synergy Tracking?

1 minute 16 seconds

"Typically, the IMO receives the synergies forecasts from the deal team. Then, the IMO disburses the synergy targets to the work streams and assigns accountable owners ..."

What Is an M&A Integration End State? When and How Should Teams Hand Off Remaining Activities?
What Is an M&A Integration End State? When and How Should Teams Hand Off Remaining Activities?

2 minutes 52 seconds

Every integration needs to have an end. Managing the End-State Transition can be just as important as managing the rest of the integration.

What is End-State?

The point in the integration when:

  • The bulk of planned integration activities have already been accomplished
  • The IMO processes can be ramped down and dedicated IMO personnel scaled back or redeployed
  • The remaining open integration workstreams and issues can be transitioned to a normal operation’s function
When Should Most M&A Integration Activities Occur?
When Should Most M&A Integration Activities Occur?

1 minute 9 seconds

"(Provided you have spent adequate time pre-planning, are operating with urgency, and have a handle on technology so it does not slow you down), then the apex of overall integration effort should occur between end of Pre-Planning and ..."

 

What Are Critical IT Day One Activities and Risks?
What Are Critical IT Day One Activities and Risks?

1 minute 47 seconds

"New payroll processing, redirection of legacy phone numbers, conversion of sales and customer support processes, conversion of legacy email systems, ...

The success of Day 1 often rests on having a Rapid Response team of IT professional available to address risks and issues ..."

If IT is already running at full capacity before the integration, the additional work can be overwhelming." 

 

What Is the Length of a Typical M&A Integration?
What Is the Length of a Typical M&A Integration?

3 minutes 30 seconds

"There is no norm, no typical length. Depends on the company, complexity, (the operating and cultural differences between companies, the time people dedicate to the integration, their integration experience and expertise, the changes to IT systems, the scope and goals) ... but you should operate with urgency to get a lot accomplished in the first 4 or 5 months after close. The long tail integration activities will usually go on longer than that ..." 

How Should You Prioritize Workstreams?
How Should You Prioritize Work Streams?

2 minutes

"It really depends on the rationale for each specific deal, but in general, mark a work stream as high priority if it has a significant number attached to it – projects or initiatives that will achieve savings and benefits from the integration. Also, any areas where maintaining two versions of a similar process, policy, or specific way of doing business will cause disruption and slow the mIgration to NewCo ..."

Why Set up Rolling FAQs?
Why Set Up Rolling FAQs?

39 seconds

"With rolling FAQs, people can self-help. They can find the answer to their questions on their own which will save you time. So set up a process to get questions, draft and vet the answers, and then publish them, say every Friday on the corporate intranet. If someone has a question, someone else may also have the same one ..."

Who Should Communicate Key Messages During an Integration?
Who Should Communicate Key Messages During an Integration?

2 minutes 7 seconds

"Important communications on Day 1 and during welcome week should come from the CEO. People want to hear from their leader. Communications on operational matters ..."

What Should You Do When Synergy Estimates Are Inflated?
What Should You Do When Synergy Estimates Are Inflated?

1 minute 46 seconds

"Map synergy activities to integration work streams. You may find the synergies are not tied to a work stream and accountabilities are not assigned. Verify responsibility, timing, amounts, and CTA ... Review gaps with senior management. Bad news never gets better with age ..."

 

What Key Guidelines Should Leaders Follow in a Merger?
What Key Guidelines Should Leaders Follow in a Merger?

2 minutes 24 seconds

12 M&A Integration Guidelines

  1. "Actively go looking for bad news ... if you are not hearing about any problems, then issues are remaining buried. 
  2. Say “no” to slow. ... operate with urgency
  3. Set and manage expectations appropriately ... when expectations are violated people cry foul
  4. Use “soft currency” to re-recruit key talent ..."
What Is an Effective Tool to Manage Any Naysayers on an M&A Integration Team?
What Is an Effective Tool to Manage Any Naysayers on an M&A Integration Team?

3 minutes 27 seconds

"The Sunshine Diagram...

On the sun, mark what is the worst thing can happen? Then draw rays off the sun. This is reverse logic. Label the rays as all the things people can do to actually make the worse thing happen.

Then put together a prevention checklist..."

What Happens When the Wrong Employee Expectations Are Set?
What Happens When the Wrong Employee Expectations Are Set?

1 minute 49 seconds

"People become disillusioned and demotivated when they feel they were misled. Set the right expectations. Protect your credibility. When you lose credibility, you lose the ability to influence people."

Step 5: Develop Post Merger Integration Risk Management Plan

What Should You Do When Synergy Estimates Are Inflated?
What Should You Do When Synergy Estimates Are Inflated?

1 minute 46 seconds

"Map synergy activities to integration work streams. You may find the synergies are not tied to a work stream and accountabilities are not assigned. Verify responsibility, timing, amounts, and CTA ... Review gaps with senior management. Bad news never gets better with age ..."

 

Performance Management Risk in M&A
What Questions Should You Ask to Determine Performance Management Risk?

1 minute 42 seconds

Differences in performance management between two companies can cause conflict and harsh feelings. Questions to assess this risk:

  • Is there a standardized performance management program?
  • How often are employees evaluated (e.g., monthly, quarterly, annually)?
  • What are the rewards for exceptional performance? Consequences for poor performance? ...

 

Step 6: Develop Post Merger Integration Culture Plans

Who Should Perform the Cultural Audit and Report the Findings?
Who Should Perform the Cultural Audit and Report the Findings?

2 minutes 16 seconds

"Not necessarily HR people. Sometimes, project managers and directors can perform the assessment. Whoever does it, they should be well-respected ... Sometimes, only an outside external consultant has the necessary credibility to communicate the findings to top executives ..."

What Questions from the Operating Style Analysis Are Particularly Useful?
What Questions from the Operating Style Analysis Are Particularly Useful?
Free
2 minutes 52 seconds
  • "What are the unwritten rules? A lot of things get accomplished in organizations through unwritten rules, side channels and work arounds.
  • What gives a person power here? It gets to the core of what is valued and what makes people successful. Sometimes it is not good behavior.
  • What do people hold sacred about the culture ..."

 

 

What Do People Like about the Operating Style Analysis?
What Do People Like about the Operating Style Analysis?
Free
58 seconds

"The series of simple questions can identify the problem areas quickly... the 5% of cultural traits that you need to address."

Step 7: Develop Post Merger Integration Communication Plans

Why Do "Staggered Experiences" Foul up M&A Communications?
Why Do "Staggered Experiences" Foul up M&A Communications?

2 minutes 12 seconds

"Executives are in New Beginnings.They want to communicate the vision, the inspiration about how great the merger will be. Initially, employees are in very a different place. They have not had as much time to digest the news. They want information much more than inspiration. They tend to tune out the inspirational talk ..."  

Why Set up Rolling FAQs?
Why Set Up Rolling FAQs?

39 seconds

"With rolling FAQs, people can self-help. They can find the answer to their questions on their own which will save you time. So set up a process to get questions, draft and vet the answers, and then publish them, say every Friday on the corporate intranet. If someone has a question, someone else may also have the same one ..."

Who Should Communicate Key Messages During an Integration?
Who Should Communicate Key Messages During an Integration?

2 minutes 7 seconds

"Important communications on Day 1 and during welcome week should come from the CEO. People want to hear from their leader. Communications on operational matters ..."

Step 8: Develop Post Merger Staffing & Retention Plans

Who Should You Try to Win Over in a Merger? What Percentage of the workforce Can You Expect to Be Defiant?
Who Should You Try to Win Over in a Merger? What Percentage of the Workforce Can You Expect to Be Defiant?

1 minute 42 seconds

"Some 20 percent of the people in the acquired company are “merger-friendly.”  They’re clear advocates who willingly embrace the combination. Another 50 percent of the folks sit on the fence.  They assume a so-called neutral position. The remaining 30 percent are the resisters.  They’re antagonistic toward combination. Don't try to win over the resistors.  Spend your time and energy on the change advocates and fence sitters...

 

Step 9: Develop M&A Project Integration Plans

What Are Critical IT Day One Activities and Risks?
What Are Critical IT Day One Activities and Risks?

1 minute 47 seconds

"New payroll processing, redirection of legacy phone numbers, conversion of sales and customer support processes, conversion of legacy email systems, ...

The success of Day 1 often rests on having a Rapid Response team of IT professional available to address risks and issues ..."

If IT is already running at full capacity before the integration, the additional work can be overwhelming." 

 

What Is a Symptom of Poor End Game Definition?
What Is a Symptom of Poor End Game Definition?

42 seconds

"Functional teams are floundering. They are not making progress. Often, it is because they do not have direction on what they are integrating to. Nobody has defined the finish line ..."

What Is the Length of a Typical M&A Integration?
What Is the Length of a Typical M&A Integration?

3 minutes 30 seconds

"There is no norm, no typical length. Depends on the company, complexity, (the operating and cultural differences between companies, the time people dedicate to the integration, their integration experience and expertise, the changes to IT systems, the scope and goals) ... but you should operate with urgency to get a lot accomplished in the first 4 or 5 months after close. The long tail integration activities will usually go on longer than that ..." 

How Should You Prioritize Workstreams?
How Should You Prioritize Work Streams?

2 minutes

"It really depends on the rationale for each specific deal, but in general, mark a work stream as high priority if it has a significant number attached to it – projects or initiatives that will achieve savings and benefits from the integration. Also, any areas where maintaining two versions of a similar process, policy, or specific way of doing business will cause disruption and slow the mIgration to NewCo ..."

Step 10: Execute Acquisition Integration Plans (Includes Day 1 Plans)

What Are Several Best Practices for Synergy Program Management?
What Are Several Best Practices for Synergy Program Management?

1 minute 13 seconds

"Consider motivating work stream employees with incentives whenever possible. This might require adding incentives to the overall IMO budget. 

The IMO should make sure costs are not shifted to other parts of the business. That is not a synergy ..."

 

How Should an IMO Support Synergy Tracking?
How Should an IMO Support Synergy Tracking?

1 minute 16 seconds

"Typically, the IMO receives the synergies forecasts from the deal team. Then, the IMO disburses the synergy targets to the work streams and assigns accountable owners ..."

What Is an M&A Integration End State? When and How Should Teams Hand Off Remaining Activities?
What Is an M&A Integration End State? When and How Should Teams Hand Off Remaining Activities?

2 minutes 52 seconds

Every integration needs to have an end. Managing the End-State Transition can be just as important as managing the rest of the integration.

What is End-State?

The point in the integration when:

  • The bulk of planned integration activities have already been accomplished
  • The IMO processes can be ramped down and dedicated IMO personnel scaled back or redeployed
  • The remaining open integration workstreams and issues can be transitioned to a normal operation’s function
What Is an Example of a Good IMO Schedule?
What Is an Example of a Good IMO Schedule?

2 minutes 31 seconds

"Block out on calendars in advance and cycle through the same meetings each week.
Example

  • Monday: IMO updates reports and dashboard
  • Tuesday: Report outs to Steering Committee and Board
  • Wednesday IMO Core Team Meeting
  • Thursday: 1 on 1 meetings with Functional Leads
  • Friday: Issue status review. Updates input by functional teams into system ..."
When Should Most M&A Integration Activities Occur?
When Should Most M&A Integration Activities Occur?

1 minute 9 seconds

"(Provided you have spent adequate time pre-planning, are operating with urgency, and have a handle on technology so it does not slow you down), then the apex of overall integration effort should occur between end of Pre-Planning and ..."

 

Step 11: Capture M&A Integration Lessons Learned

Which M&A Integration Mistake is the Most Common?
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?
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 ..."