M&A integrations slow to a crawl when the endgame and the tasks to get there are vague, undetermined, or not communicated. People tend to shift into neutral and operate with a lower degree of intensity when the path ahead is foggy.
Speed and high performance in M&A are byproducts of clarity. Integration teams build momentum and cover ground at a much faster clip when five areas are clearly defined in their plans.
1. End States
Acquirers should not begin integration planning without first defining their end states.
A few examples of end states . . .
- HR: All employees are on one payroll system, one benefit system, one harmonized compensation system, and redundant positions have been eliminated.
- Information technology: All employees are using common ERP, email, and telephone systems.
- Sales: Sales territories, customer engagement rules, sales support and admin procedures, product portfolio, and pricing changes have been determined and communicated.
- Marketing: The companies are presenting a unified front in terms of advertising, branding, pricing, and hours of operation.
"Integration complete" should be defined. If not, teams will feel like they are in a race without a finish line.
Link to related presentation: End-State Transition
An example of a typical structure for an integration consists of three layers:
- A steering committee
- An integration management office (led by an integration manager) and
- A variety of additional teams organized by function (i.e. sales, human resources, finance, and information technology, etc.) and/or by business unit, product line, process, or geographic location.
Determine the integration hierarchy, decision-making protocols, and escalation routes so problems requiring senior-level input can be quickly addressed and resolved.
Link to related presentation: Approach and Structure for a Successful Integration