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Guiding principles for acquisition integration <ul><li>Get the integration strategy right for the deal </li></ul><ul><li>D...
Get the integration strategy right for the deal Spell out the rationale for the deal, the benefits sought, along with key ...
Design the programme around the benefits case Always keep sight of the benefits case  - if you’re not keeping the score, y...
Provide drive and focus through outstanding programme management On the road to integration, priorities will change as the...
Manage the risks to business as well as to the programme Business <ul><li>Rapidly gain control of the operational business...
Rapidly engage the people in both organisations <ul><li>Identify and engage the key stakeholders to understand their attit...
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Post Merger Integration Principles

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The key principles about how to make sure you deliver value from your M&A Integration activity

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Post Merger Integration Principles

  1. 1. Guiding principles for acquisition integration <ul><li>Get the integration strategy right for the deal </li></ul><ul><li>Design the programme around the benefits case </li></ul><ul><li>Provide shape and focus through outstanding programme management </li></ul><ul><li>Rapidly engage the people in both organisations </li></ul><ul><li>Manage the risks to the business as well as the programme </li></ul>Successful Integration Strategy Programme Design Programme Management Risk Management People & Communications
  2. 2. Get the integration strategy right for the deal Spell out the rationale for the deal, the benefits sought, along with key complexity factors Determine the integration approach and strategy Studies indicate that there is no ‘one approach’ for all acquisitions <ul><li>The integration strategy must be driven by the strategic rationale for the deal (i.e. achieving the ‘1+1=3’) </li></ul><ul><li>Key stages in the journey need to be defined in terms of the business model and the performance of the combined organisation. This enables success to be measured as the integration progresses </li></ul>Have a clear view of the ‘end game’ – along with the stages in the journey <ul><li>The integration strategy is: </li></ul><ul><li>How deeply will we integrate? </li></ul><ul><li>How quickly will we integrate? </li></ul><ul><li>How many do we need to involve in the process? </li></ul><ul><li>The approach may vary across the organisation </li></ul>cultural compatibility (different) geographic presence (overlapping) relative size (similar) resource valuation base (pinkware) produce positioning (competing) acquirer preparedness (not ready) sector concentration (high) Level of involvement Depth / Degree Pace Performance Time Benefits Delivery $ improvement FTE Reduction Cost Reduction Revenue Growth Economy of scale Extension of presence Bundling of capabilities NO GO ZONE
  3. 3. Design the programme around the benefits case Always keep sight of the benefits case - if you’re not keeping the score, you are unlikely to deliver <ul><li>IT will be either crucial or unimportant </li></ul><ul><li>Less obvious topics - e.g. real estate – can contribute up to 20% of savings </li></ul><ul><li>Ruthlessly review existing projects – Acquirer and Target. </li></ul><ul><li>Not all projects need to be done at the same time </li></ul>Confirm the total value which must be extracted Identify the areas that will deliver the most value - prioritise and focus efforts as appropriate Time to deliver <ul><li>Value extraction targets should be broken down and allocated to individual projects </li></ul><ul><li>A robust cash-based benefits model is required – measuring things that make sense to operational staff. </li></ul>Install strong leadership to ensure commitment to achieving the benefits <ul><li>Clear governance and single point accountability are key </li></ul><ul><li>The integration delivery structure must be firmly tied to the ‘business as usual’ structure </li></ul>time Transition Transform Quick Win Opportunities Benefit Integration Steering Group Programme Manager Programme Director Programme Office People & Organisation Communications Real Estate Commercial Systems Finance Business Integration Business Integration Managers
  4. 4. Provide drive and focus through outstanding programme management On the road to integration, priorities will change as the programme progresses Manage the work as an integrated programme to maximise business benefit Deliver the benefits at the micro level, monitor at the macro level <ul><li>You must also change management styles - to reinforce desired behaviours and embed the new culture </li></ul><ul><li>You must stick at it long enough to deliver the full range of benefits available. </li></ul>Individual project managers cannot manage conflicting priorities by themselves Integration Implementation Programme <ul><li>Progress on the achievement of the benefits case is the number one agenda item for each Steering Group meeting </li></ul>-0.20 -0.10 0.00 0.10 0.20 0.30 0.40 0.50 0.60 0.70 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 Year Revenue Costs Benefits Business operations Current business Business strategies Projects Projects Projects Stage Review Stage benefits Stage benefits Future business Stage Review Transformation Theme: Coaching & Facilitating Transition Programme Theme: Controlling, Monitoring & Communicating Planning & Quick Wins Theme: Directing Time Benefits 100 days (20-30%) 3 years (100%) 300 days (80%) Performance Time
  5. 5. Manage the risks to business as well as to the programme Business <ul><li>Rapidly gain control of the operational business </li></ul><ul><li>Use a “smoke detector” of high frequency performance metrics to monitor business results </li></ul><ul><li>Expanding markets will present a particular challenge </li></ul>Programme <ul><li>Identify the key risk areas for benefit delivery </li></ul><ul><li>Establish formal risk management processes </li></ul>Confidence Matrix Inadequate resourcing is often the biggest risk SB.1998.DM2/2 Scope/Plans Quality Resource Communications Ops System Mngmt Systems Integration Testing Implementation  ?  ?   ? ? ? ?  Work Elements Control Elements Risk Identification Take Action Risk Control Framework Developing the Risk Profile Modelling & Simulation Risk Assessment & Prioritisation Risk Review Monitor & report <ul><li>Input to: </li></ul><ul><ul><li>Rate of return for business case </li></ul></ul><ul><ul><li>Project strategy </li></ul></ul><ul><ul><li>Methods for project scoping </li></ul></ul><ul><ul><li>Contingency requirements </li></ul></ul>Project Categorisation Risk Mitigation Planning Contingency Planning Integrated with the Project Control Cycle
  6. 6. Rapidly engage the people in both organisations <ul><li>Identify and engage the key stakeholders to understand their attitudes and personal ‘wins’ </li></ul><ul><li>Capture “hearts and minds” through the communication process </li></ul><ul><li>Ensure cultural differences are recognised in the HR plan - even for apparently similar cultures. </li></ul><ul><li>Produce an HR plan to ensure that the right people are appointed to jobs quickly - a task that is often underestimated. </li></ul><ul><li>For staff required on a temporary basis only, lock them in via bonuses linked to activity achievement – rather than time </li></ul>Taking advantage of the window of opportunity to make the big changes Select, build and incentivise the integration team - using staff from both organisations Engage people throughout the organisation Target communications appropriately with all key stakeholders to begin to build support Owners and Corporate Key Clients Suppliers Employees Key Influencers Analysts and Press <ul><li>Integration programmes don’t fail through over-communication. </li></ul><ul><li>Communicate, communicate and communicate again </li></ul><ul><li>The New Company </li></ul><ul><li>Key Line Staff </li></ul><ul><li>Project Teams </li></ul>Company A Company B Stakeholder Mapping Share of Voice (degree of influence) Buy-in (attitude to project)

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