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Intelligent M&A.Online

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Navigating the Mergers and …

Navigating the Mergers and
Acquisitions Minefield

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  • 1. Executive Finance: M&A SOUNDVIEW Book Summaries www.summary.com ® Intelligent M&A Navigating the Mergers and Acquisitions Minefield THE SUMMARY IN BRIEF Mergers and acquisitions (M&A) have played a dominant role in shaping and reshaping the global corporate landscape in the last century. If the sheer numbers of deals aren’t grabbing headlines, the size and scope of the deals that are made cannot help but command the attention of investors the world over.What is sometimes overlooked in the hoopla, however, is how risky these deals are, and how very few of them wind up working as well as they were originally conceived to work. To make the best decisions, leaders need detailed and timely information about by Scott Moeller the commercial and competitive environment surrounding an M&A deal — a and Chris Brady function business scholars Scott Moeller and Chris Brady term “business intelli- gence.” By employing sufficient and first-rate business intelligence as part of the M&A process, companies can manage the financial, cultural and leadership-driven CONTENTS issues inherent to all such deals.This function is a vital aid to managerial decision The Need for Intelligence in Mergers making in any industry, at any time. and Acquisitions In Intelligent M&A, Moeller and Brady set forth a solid strategy for thriving in Page 2 the high-stakes, high-stress environment of corporate mergers and acquisitions.With a solid theoretical base, as well as real-world focus and application, Intelligent M&A is Business Intelligence Pages 2, 3 a virtual handbook, showing you how to survive when corporate worlds collide. Designing the IN THIS SUMMARY, YOU WILL LEARN: Acquisition Process Pages 3, 4 • Why business intelligence is so important to the M&A process. Controlling the Advisors • How to design an effective acquisition and identify the best targets for a deal. Page 4 • How to manage the expectations of and interactions with advisors on both Identifying the Best sides of an M&A deal. Targets • How to practice effective due diligence. Pages 4, 5 • How to successfully integrate the two companies involved in the merger. Due Diligence Pages 5, 6 • How to survive a merger, including tips on staying visible, informed and invaluable in a time of extreme flux. Post-Merger Integration Pages 6, 7, 8 Published by Soundview Executive Book Summaries, P.O. Box 1053, Concordville, PA 19331 USA How to Survive a Merger © 2008 Soundview Executive Book Summaries • All rights reserved. Reproduction in whole or part is prohibited. Page 8 Concentrated Knowledge™ for the Busy Executive • www.summary.com Vol. 30, No. 3 (3 parts), Part 3, March 2008 • Order # 30-08
  • 2. FIRMS OF ENDEARMENT THE COMPLETE SUMMARY: Mark Reiter by Marshall Goldsmith with INTELLIGENT M&A by Scott Moeller and Chris Brady THE COMPLETE SUMMARY The authors: Scott Moeller is the CEO of Executive Education at Cass Business School, has taught at Imperial College and Oxford University, and is a frequent commentator on television and in the press. Chris Brady is the Dean of the Business School at Bournemouth University. He is the co-author of the acclaimed management book The 90-Minute Manager. Intelligent M&A by Scott Moeller and Chris Brady. Copyright © 2007 by John Wiley & Sons Ltd. Summarized with permission of the publisher, John Wiley & Sons, Ltd. 311 pages. $39.95. ISBN 0-470-05812-1. Summary copyright © 2008 by Soundview Executive Book Summaries, www.summary.com, 1-800-SUMMARY, 1-610-558-9495. For additional information on the authors, go to http://my.summary.com The Need for Intelligence in issues for the use of business intelligence: • Horizontal mergers are mergers among competitors Mergers and Acquisitions or those in the same industry operating before the merger M&A are an integral part of the global strategic and finan- at the same points in the production and sales process. For cial business landscape, regardless of the role one has. example, the deal between two automotive giants, Although fluctuating widely from periods of peaks and Chrysler in the U.S. and Daimler in Germany, was a hori- troughs of merger activity, the baseline size and growth of zontal merger. mergers is clear. In fact, the “slow” period of activity in 2002 • Vertical mergers are deals between buyers and sell- was well in excess of the “peak” activity in the late 1980s. ers, or a combination of firms that operate at different Yet, despite this impressive trend, mergers and acquisitions stages of the same industry.There is often less common are often misunderstood and misrepresented in the press knowledge between the two companies in a vertical deal, and by those who are engaged in each transaction. Deals — though there may still be some small degree of common especially when hostile, cross borders, or are among large clients and suppliers, plus some previously shared employ- companies — might be front-page news, yet there is a great ee movement. deal of conflicting evidence as to whether they are truly • Conglomerate mergers are between unrelated com- successful endeavors. Research has shown an improved per- panies, not competitors, and without a buyer/seller rela- formance of companies that make acquisitions. tionship (think of General Foods and Philip Morris’ merg- However, there do seem to be some inviolate truths er in 1985). Conglomerate mergers do not have a strategic about M&A deals: rationalization (like cost savings) as a driver, but do typically • Many fail to deliver on promised gains to shareholders. manage to feature creative uses of business intelligence. • Boards, CEOs, senior managers and advisors pursue Deals are either complementary or supplementary.A com- deals for personal reasons. plementary acquisition helps to compensate for some weak- • Deals have a momentum of their own, which typi- ness of the acquiring firm.A supplementary deal is one cally means they don’t get dropped when they no longer where the target reinforces an existing strength of the acquir- make sense. ing firm; therefore, the target is similar to the acquirer. G • The deal doesn’t end when the money changes hands. Rather, this point marks the start of the most dif- Business Intelligence ficult stage of the deal — the tough integration process By failing to coordinate and prioritize the business intel- that few get right. ligence function, companies increase the risk of failure in • Success with one deal doesn’t guarantee success in any endeavor but perhaps most significantly in the M&A the next deal. arena. Intelligence failures generally occur, despite the Different Types of Mergers and Acquisitions wealth of information available, because of a lack of a sys- temic intelligence function and consequently a lack of suit- The three major types of mergers/acquisitions are dri- able analysis for decision makers to draw upon. In business ven by different goals at the outset and raise different 1-800-SUMMARY Published by Soundview Executive Book Summaries (ISSN 0747-2196), P.O. Box 1053, Concordville, PA 19331 USA, a division of Concentrated Knowledge Corp. Published monthly. Subscriptions: $209 per year in the United States, Canada and service@summary.com Mexico, and $295 to all other countries. Periodicals postage paid at Concordville, Pa., and additional offices. Postmaster: Send address changes to Soundview, P.O. Box 1053, Concordville, PA 19331. Copyright © 2008 by Soundview Executive Book Summaries. Available formats: Summaries are available in print, audio and electronic formats.To subscribe, call us at 1-800-SUMMARY (610-558-9495 outside the United States and Canada), or order on the Internet at www.summary.com. Multiple-subscription discounts and corporate site licenses are also available. Rebecca S. Clement, Publisher; Sarah T. Dayton, Editor In Chief; Melissa Ward, Managing Editor; Christine Wright, Senior Graphic Designer; Rob Smith, Contributing Editor 2 Soundview Executive Book Summaries® www.summary.com
  • 3. Summary: INTELLIGENT M&A there is no such thing as a pleasant surprise; any surprise is mature intelligence function can provide: worrying because it indicates weak intelligence systems. • Immediate intelligence. Intelligence collected Intelligence should be at the very heart of all corpo- from open sources to provide endusers with intelligence rate endeavors but often is not. A recent global work within a 24-hour time frame. force research study shows that less than half of employ- • Continuing intelligence. Intelligence that is rigor- ees believe that they are in safe hands and that their ously researched, analyzed and documented, delivered by executives are taking steps to ensure the long-term suc- continuous monitoring of the competitive environment. cess of their organizations. How, then, should organiza- • Technical intelligence. Intelligence that maintains tions avoid catastrophes? The answer is by staying in technological competitiveness and manages R&D and close touch with the external environment. new product development projects effectively, evolving in Business Intelligence Industry approach according to evolving technologies. Whether traditional or modern, the intelligence function • Analytical intelligence. Intelligence that provides remains the same — to be the eyes and ears of the organi- advanced warning of emerging opportunities and/or threats. zation, to gather and analyze information that provides a • Internal intelligence consulting. Intelligence competitive advantage.Why, then, does it appear so difficult gleaned by embedding analysts within internal M&A for organizations to engage with the external environment? teams, enabling the analyst to provide targeted and time- First, as most observers agree, there is a perception of ly intelligence to the group. greater complexity in the modern business environment. • Activated intelligence. Intelligence requests gener- Getting to the other side of that complexity clearly ated by both formal and informal observation of the involves greater knowledge of the environment but also environment, appearing at the request of a client and tai- greater knowledge of how to deal with complexity. lored to that client’s needs. The second reason why organizations fail to engage with • Counterintelligence. Intelligence activities undertak- the environment is that they do not believe it is necessary. en to protect the company from other entities looking to They become complacent.They believe that their approach exploit the company’s vulnerabilities. G has worked, is working, and will, therefore, continue to work.They fail even to observe it, much less respond to it. Finally, and perhaps most significantly, organizations sim- Designing the ply fail to give sufficient thought and resources to intelli- gence as a function. Unwise leaders often choose to limit Acquisition Process Although each acquisition or merger deal is unique, in the effectiveness of the intelligence function by affording it general the merger process usually unfolds in six stages: too little value and, consequently, too few resources. How does one best engage with the external environment? By 1. Corporate strategy development: determine if creating an organizational intelligence system. acquisition or merger is the appropriate strategic move; develop a long list of possible candidates. Review 2. Organize for the merger/acquisition: select The first component in such a system is a review of the project leader, form different teams, identify outside components of the company’s external interaction, in a facil- advisors, and so forth. itated brainstorming session. Identify any gaps in the external 3. Specific deal pricing and negotiation: includes provision, any disconnections between the components.The identification of final acquisition candidate(s), valuation review process need not be complicated or expensive, but it and pricing, and negotiations between both managements. will be resource intensive, and the resource will be the brain- power and thinking time of the senior management team, 4. Structuring and approval: engage in tasks includ- and not just for the day of the brainstorming. ing structuring the deal, conducting due diligence, arranging financing, ensuring approval by common stock- Structure holders, filing appropriate paper and closing the deal. Having identified the gaps or inefficiencies in the 5. Post-merger integration. company’s established intelligence system, remedies must 6. Post-acquisition review. be implemented. It may be that internally advertising The buyer’s perspective differs from the seller’s but one’s product range can actually stimulate recognition of both largely need to follow these steps. Although it is the value of those products and change the culture. more common for buyers to initiate a deal, targets can Essentially there are seven intelligence products that a also put themselves up for sale. Sellers initiate deals most www.summary.com Soundview Executive Book Summaries® 3
  • 4. Summary: INTELLIGENT M&A commonly when they are experiencing some difficulty, and documents and the “back end” (details) of offer and including financial difficulties, succession issues or legal defense documents.They give general corporate and reg- matters. It is critical to determine the underlying reasons ulatory advice and sometimes offer tax advice. because they are not always stated. • Accountants draft the “middle bit” (numbers) of the From the seller’s perspective a typical takeover pro- offer documentation and provide the “independent” finan- ceeds through the following stages: cial information as required. Note that it is management, 1. Corporate strategy development to determine if the not the accountants, that produces the financial forecasts. division or company should be sold. • Human resources consultancies help bidders 2. Preparation of the expected pricing and expected determine the strength of the target’s senior and even deal terms. middle management teams.The bidder needs to know as 3. Organization for the merger/acquisition: select pro- well whether those people will stay with the new com- ject leader, form different teams, identify outside advisors, pany and what incentives will be required. and so on. • Stockbrokers are the principal line of communica- 4. Development of a “long list” of possible buyers and tion with institutional shareholders and because of their discussions with those companies. knowledge of the markets and the investors, they provide input on valuation and pricing. 5. A “short list” stage with limited due diligence com- pleted within the seller’s company. • Public relations advisors help with the selling mes- sage to multiple audiences, including not only the share- 6.A “preferred bidder” stage with almost unlimited due holders who will ultimately determine whether the deal is diligence and strict confidentiality agreements exchanged. acceptable but also to management and staff of both com- 7. Deal finalization: arrange financing, approval by panies, customers, suppliers and the general public. common stockholders, file papers and obtain approvals with jurisdictions in which each company Advisors and Business Intelligence operates, and closing. G Each of the advisors can play an important intelligence role, although often each advisor’s actual role is limited For additional information on design of the acquisition process, go to http://my.summary.com. to his or her traditional functions. Accountants, for example, check and produce the numbers, but, if asked, can provide important information about the industry and other companies in the market. Controlling the Advisors Both large global consultants and small boutique advisors Although the ultimate responsibility for the success of are renowned for their ability to seek out nonpublic infor- a deal will rest with the board of directors and senior mation about clients and customers. Often, it is difficult for management, in most mergers there is a large number of a company to ask this information directly because it advisors necessary to bring the deal to completion. Some would need to identify who is asking. Consultants, on the of these advisors may be involved from the first step in other hand, do not need to disclose their clients unless the planning process through to closing, whereas other asked — and frequently are just not asked! advisors will play a much more limited role during a very specific part of the merger process. Do not forget to employ your intelligence function on your advisors. No matter how reputable the advisors or Advisor Roles how much work in the deal is conducted by the external There are numerous advisors involved in a merger or consultants, the board, senior managers and employees acquisition, among them the following: are the ones who will live with the result for years.This • The financial advisor is typically at the center and responsibility cannot be delegated. G acts as the experienced coordinator of many of the other advisors and their activities.The financial advisor not only gives general financial advice but also drafts some and Identifying the Best Targets The reasons for carrying out M&A activity are depen- coordinates all documentation, controls other advisors (and dent on the context of the business, the dynamics of the often the client), advises on target valuation and deal pric- environment, future strategic intents and the personal ing, manages the overall strategic direction of the offer and motivations of senior management.These motivations lends his or her reputation to the transaction. will define the approach taken to acquisition planning; • Solicitors and lawyers will draft legal agreements each company must make its corporate development 4 Soundview Executive Book Summaries® www.summary.com
  • 5. Summary: INTELLIGENT M&A strategy explicitly and directly based on these motiva- • Profitability and other financial factors tions. In this way, these companies will have clear work- • Risk exposure, including the cyclical nature of the ing guidelines spanning different time periods that business, any significant legal or regulatory issues, address their strategic intent, where they would wish to inherent risks to the products, etc. expand, and even where they would like to divest.This • Asset type, whether buying the whole company or strategy must be both realistic and personalized to the just a division, real estate, natural resources or people company. It will identify where there are holes that must • Intellectual property: patents, client lists, supplier be filled with acquisitions or mergers. relationships The Role of Strategy • Management quality and the likelihood that they In reference to finding a possible target, management will remain with the company can make quick, informed decisions based on their • Current ownership knowledge of their own capabilities, corporate strategy, • Cultural and organizational fit. G the state of the market, an understanding of the business For additional information on screening candidate targets, of the target and current key stakeholder perceptions. From this point they choose whether to act on the go to http://my.summary.com. opportunity or to attempt to buy more time in order to carry out some more research on key determinants. M&A deals are by definition a means to an end.They Due Diligence should never (but sometimes do) drive strategic situa- In M&A, the due diligence process includes the verifica- tions and choices.Whatever the business strategies that a tion of material facts and an examination of the external company employs to its competitive advantage, the estab- relationships of the company and the internal finances, lishment of acquisition objectives should be firmly root- operations and management.While due diligence is often ed within an entity’s “grand design,” helping to promote seen as the bidder’s responsibility, it is just as important for its strategic goals and objectives. the target to conduct due diligence on the bidder in order to determine whether the offer is bona fide and legitimate Screening Candidate Targets and, most importantly, to ascertain whether the bidder has The screening of candidates will typically include the the financial capacity to complete the transaction. following criteria, but the actual criteria used may differ for each acquirer and even for each deal: The Due Diligence Process • Industry and the target’s position in it The key factors in conducting informative and timely due diligence are the following: • Size of the business (sales, assets, market value, etc.) • Identifying the most important items to collect: in • Strategic capabilities most deals there is not enough time to look at every- thing in as much detail as desired. Cisco Picks Its Targets Well • Identifying the right sources for the desired informa- Cisco, like some serial acquirers, has become tion within the required time frame. quite adept at ascertaining that companies they • Identifying the right people to review the data: this acquire fit their corporate strategy; the company should naturally include the people who know most relies on acquisitions to complement its own inter- about that area and should also include people who are nal research and development. Cisco has had peri- ods when it buys one to two companies per month. expected to be managing the business post-acquisition In its early period of rapid growth, it developed a and therefore will use that information. six-point blueprint for evaluation of prospective The target company is not required to provide to a acquisitions: bidder (or vice versa) any confidential or nonpublic 1. Similar vision to Cisco information unless in a situation where compelled by the 2. Must produce quick wins courts.The target is also not required to disclose infor- 3. Long-term win situation for all parties (share- mation to any party that the party has not requested. Of holders, employees, customers, partners) course, withholding information is not necessarily rec- 4. Cultural compatibility must exist 5. Close geographic proximity to Cisco ommended, especially if it is necessary to keep the deal 6. Friendly deals, never hostile. friendly and to get a higher price. www.summary.com Soundview Executive Book Summaries® 5
  • 6. Summary: INTELLIGENT M&A Types of Due Diligence Information statements may enable acquirers to identify reasons why Due diligence can be divided into external and internal a company wishes to merge or sell out. information. External due diligence should, if possible, be The building blocks for such information include conducted before the deal is underway when the time auditing and verifying financial results on which an offer pressures may not be as extreme as the period after the deal is based, identifying deal breakers, providing ammunition is announced. Internal due diligence is conducted through- for negotiators and pinpointing areas where warranties or out the deal. Both need to be continually updated as con- indemnities may be needed, and providing confidence in ditions change. In addition, each industry will have its own the underlying performance (and therefore future profits) special due diligence requirements. of a corporation. While due diligence does enable prospective acquirers Management Due Diligence to look for potential “black holes,” the aim of due dili- It has become common practice for acquirers to per- gence should be this and more. A well-managed due dili- form discreet investigations in order to evaluate the com- gence assignment — varied in each specific case by scope petence of the target’s management and quality of their and scale to reflect the unique issues of each deal — will past performances. Since often it will be management help firms to improve their financial performance, who will be carrying the merger forward, it is crucial strengthen their competitive positioning, develop internal that adequate time is spent on making sure the best peo- “know-how” and be better able to grow through M&A. ple are in place with all the support they might need. G Business intelligence is at the heart of due diligence, providing company executives with the kind of insight that enables them to make appropriate commercial deci- Post-Merger Integration sions and plan for the future.While 90 percent or more An M&A deal does not end with the completion of of information required for merger or acquisition activity the transaction at closing. In most cases, the closing of is widely available, the key skill in this entire process is the deal is only the start of the truly hard work of mak- the ability to identify what information is needed, where ing the newly formed company work. it is most likely to be found and then determine a way Post-merger integration is the “quiet” phase of the typi- to extract that information. cal merger; to the outside world there is usually very little discussion about the deal in this phase unless, of course, it is Financial Due Diligence falling apart and was a high-profile deal.The success of the Often the mainstay of the M&A process, financial due deal actually depends more upon the post-merger integra- diligence enables companies to obtain a view of an orga- tion than any other single step in the M&A process. nization’s underlying historical profits, which can then be In fact, a merger will likely fail if it has the right strate- used as a canvas on which to paint a picture of the com- gic rationale but poor implementation. Likewise, failure pany’s financial future. A prospective target’s financial will follow a merger carried out at the best price but with bad post-merger integration. On the other hand, if Oracle’s Management Lists a deal has no sound strategic rationale or if the strategy In the lead-up to an acquisition in early 2006, was based on circumstances that have now changed, and Oracle was given the names of 53 key people that even if the deal was done for too high a price, the newly could not be poached during the merger discus- combined firm can still be successful if there is effective sions or afterward for a period in case the deal fell and creative management of the new organization after through. If one is given such a list, as noted by the the merger.The simplest way to work toward success is Senior HR Director for Europe, the acquirer has the to focus on post-merger integration. beginnings of a tool to check with customers and former employees as much as it can about those 53 Change Management and Integration Costs people, as they are presumably the best of the best Post-merger planning should reflect the desired change in that target company. This process can identify from the deal. If the strategy behind the deal is unclear, possible problems and issues with those individuals there is no reason to expect successful post-merger inte- and with the organization. gration. Different types of acquisitions bring with them In addition, it turns something meant to be different post-merger problems. defensive on the part of the target into something of even greater value to the bidder in the due The costs of doing integration poorly can be immense. diligence process. The overall cost includes not only out-of pocket, quan- 6 Soundview Executive Book Summaries® www.summary.com
  • 7. Summary: INTELLIGENT M&A tifiable expenditures (rebranding, systems integration and focused on the success of the deal and on managers and the like), but also items that are difficult to quantify but employees internally. that will have a major impact on the newly merged The CEO must appoint an integration manager who company’s bottom line, including the following: comes from a high level in the organization, ensures • Hiring and training employees in new positions middle management buy-in and involvement through • Time-consuming and distracting meetings and the use of integration planning committees and task activities during integration forces and makes quick decisions on compensation where necessary. A single integration manager must also • Dysfunctional politicking and power fights be appointed to speed up the integration process, create • Decrease in employee efficiency during the period a structure, forge social connections between the two of uncertainty organizations and help engineer short-term successes. • Customer confusion and competitors’ attempts to Engineer successes. One way to maintain the client poach clients during this period. base and even to grow it is through the engineering of Integration Planning successes, even if these are not “real.”This can be used to demonstrate the power of the new organization and Integration planning should begin at the deal idea- should be done as soon as possible after the deal is generation stage and continue throughout the merger announced (and planned well before that time.) These process.There are five major stages in the post-merger wins, when communicated properly, can be an effective integration process: morale booster internally as well. 1. High-level merger planning: discussion at the Act quickly. When talking to almost anyone involved senior executive level, including talks about how the in a successful integration, the need for speed is usually companies can or will combine. mentioned in the first sentence. It is critically important 2. Formal (or leaked) announcement: Employees to make the key decisions very quickly. Uncertainty is and management will have mixed emotions, and expec- the virus of successful post-merger integration, as this tations rise in many cases due to the external discussion will lead to customers, managers and employees leaving. about the deal’s potential. Due to the natural uncertainty Retain key employees. It is also important to retain by most about the deal, it is important to be able to key employees in both the acquiring and acquired com- announce some integration plans at the same time or panies. Each employee will be most concerned about within days of the deal announcement. “me.” If those concerns are not addressed, no other busi- 3. Initial organizational merger planning: The ness will get done properly as managers and employees organization is unstable and although many employees will be distracted.The intelligence function should help have the best intentions to cooperate, good will quickly the acquirer identify key personnel. erodes. Post-merger planning is now out in the open People-related issues typically represent much of the with a need for effective use of business intelligence. hidden post-merger integration cost to the new organi- 4. Initial post-deal integration: often intense dur- zation. Organizations that anticipate these issues will be ing this period (typically 100 days) but with a high level best positioned to deal with them effectively and to min- of organizational instability, including “us-them” mentali- imize the negative financial impact they represent. ty and intra- and interdepartmental hostility. Nurture clients. Do not lose sight of the revenue side 5. Psychological integration: Roles and systems are of the business — the focus on clients.While the compa- by this point clarified, and there are successes demonstrat- ny is worrying about integration, the outside world will ing the power of the new organization; this is a long-term, not be so distracted: Customers can be poached if not gradual process, which may take years to finalize. nurtured and suppliers are at risk. It is therefore important to encourage the sales force and relationship managers to Keys to Integration Success be alert to signs that there are problems. In order to achieve a successful post-merger integra- Communicate. Communication must emanate from tion — and thus the success of the deal — there are the very top of both organizations or else they run the eight areas that require attention: risk of lacking credibility. Managers must “walk the talk” Leadership. It is important to set up the appropriate and show that they have recognized the changes to the structure and organization for the post-merger integra- organization and their impact on individual employees. tion, starting with the leadership.The top of the compa- The very senior managers can best communicate the ny needs to be seen internally and externally as being vision of the deal and the related business logic. www.summary.com Soundview Executive Book Summaries® 7
  • 8. Summary: INTELLIGENT M&A Communications must demonstrate transparency and • Stay around the office. Become more visible. Be the openness at all times; a lack of candor or honesty will be hardest worker, or at least perceived to be such.This will immediately sensed by most employees, and the good demonstrate that you are invaluable and provide you with will that is critical to have in place for the successful opportunities to pull out all the stops and produce. implementation of the deal will be destroyed. • Your own team may be your most valuable Integrate the two cultures. Cultural integration is asset. Your own team may have sources of information paramount in the post-merger period. It is important to that aren’t communicated by your network or by your make the social connections in terms of communication, manager. Additionally, you’ll feel better if you are doing identification of common core values and recognition of your best for your staff. Furthermore, you may need the importance of “superficial” issues such as titles and them in the new organization and you don’t want them company and division names. It is an issue not just for to consider leaving prematurely. senior managers but for all levels of the organization, as • Network incessantly, both internally and exter- both companies will have had unique cultures that may nally. This is important both to gather intelligence about not instantly or naturally mesh. what is to happen and to gain support as decisions are Adjust, plan and monitor. Managers should prepare made. Also, let others know your accomplishments, tal- for surprises — these will always occur in a situation as ents and what you’ve done for the company. complex as merging two companies and their employees. • Keep your clients and keep them happy.You can Nothing should be cast in stone — be willing to make avoid being made redundant by making sure your clients are changes, anticipate unexpected external events and man- loyal to you personally as the salesperson, and not necessarily age them as best as possible. to the newly merged company. Support and middle-office Planning should start at the beginning of the deal idea staff should think of the front office as their client.Try to stage.This includes an identification of whom will fill key link yourself with some client-facing teams; at least get those roles, their responsibilities, and mapping out what the who you support to speak up positively on your behalf. future organization will look like. Business intelligence can • Be flexible. Be willing to move or change jobs, and to be used to determine what changes will be necessary. G show adaptability to a new corporate culture, manager, travel, job requirements, hours and other business practices. How to Survive a Merger • Prepare for the worst, even if you think your job is secure. When rumors about a merger or acquisi- In today’s business environment, it is unusual for an tion appear, take them seriously. Such preparation is individual not to experience a merger or acquisition at especially important if your company is the smaller one some point during his or her career. It is certainly useful in an acquisition. to know about survival techniques and tips that have proven helpful to others when faced with an upcoming • Be positive about the new company. Be future oriented and focus on the needs of the new organization. or ongoing merger. A positive outlook about yourself and your place in the Survival Tips company can be important in easing your anxieties Assuming you wish to stay with the newly merged about work and the merger. company, what should you do? The techniques of good There are no guarantees that a job can be retained business intelligence applied to your own personal situa- or found in the newly combined company, but an tion would include the following: application of these recommendations should improve • Start to prepare during the pre-merger phase. Be the odds immensely. G part of the merger planning and design process, and/or the post-merger integration team. Get to know the other orga- RECOMMENDED READING LIST nization as well as possible using internal and external con- If you liked Intelligent M&A, you’ll also like: 1. Making Strategy Work by Lawrence G. Hrebiniak. Hrebiniak offers a com- tacts and resources.This will not only give you information prehensive, disciplined process model for making strategy work in the real that will be personally useful but also will enable you to be world, where formulation and execution are both major challenges. considered more valuable, particularly if you understand the 2. The Well-Timed Strategy by Peter Navarro. Navarro provides the tools to other company better than your colleagues do. align every facet of business strategy, tactics and operations to reflect changing business conditions. • Don’t think that your boss will take care of you. 3. Corporate Agility by Charles E. Grantham, James P. Ware and Cory As with everyone else in the organization, your boss will be Williamson. In order to compete in the flat world, businesses must be looking out for him/herself first. He or she may even have willing to embrace a new strategic model. Corporate Agility provides the blueprint for this revolutionary move forward. less of an idea than you do as to how decisions will be made. 8 Soundview Executive Book Summaries® www.summary.com

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