Merger and Acquisition (M&A) integration is the process of bringing two or more companies together with the aim of maximizing synergies to ensure that the new organization lives up to its potential value. In many cases, this is easier said than done. There are many decisions to be made and many questions to be answered before two companies can be successfully combined into a new entity. Consider the following:
- How does this merger influence company mission, vision and strategy moving forward?
- What products or services will be continued, combined, or eliminated?
- How will organization structures be combined. How will roles change?
- How will we integrate knowledge such as customer, product, and services data?
- What is the strategy for combining technology and systems such as IT?
- How will internal HR and other policies be standardized?
The DTA Approach to Integration Success
Deals that look great on paper often fail because they do not take account of the human factor. Integration is about turning two companies with two cultures into a single unified new organization where leaders, managers, and everyone down to the front line feels a part of it. The best way to ensure success is to engage leaders, managers, and workers in the decision-making process to answer these strategic questions.
While every situation is a little different, there is a logical process for this kind of engagement.
- Senior Leadership Planning. It is likely that there will be new players added to the senior team. This group will need to reconstitute itself and develop the broad post-merger strategy. The team will also need to establish the goals and timetable for the integration. Change champions will be appointed for specific areas.
- Extended Leadership Planning. Again, managers from each of the merging companies will meet to align on their working relationships and their role in the integration.
- New Company Launch Meeting. With the help of an event planning team, a broad cross-section of leaders and employees will meet to create a shared vision of the future that is inspiring and energizing. Also, there will be planning for task teams that will take on the work of systems and process integration.
- Small Group Work. New functional teams and special tasks teams will disperse to do the work of integration in IT, HR, Marketing, Procurement, Production, etc.
- First Check Point. Launch participants will return at 90 or 120 days to review progress, celebrate success, and decide on next steps.
One Client’s M&A Integration Story
The Client: The CEO of an automotive manufacturer whose strategy was to grow internally and through acquisition. Growth targets for both were set at 10-15% per year to bring in new products, new, processes, and new customers.
The Challenge: How to integrate many new companies and many new colleagues while simultaneously evolving the company’s strategy and values.
The Process: In the first year the company held four large-group Whole-Scale® events. The first two-day event was for senior leaders. The purpose of the first event was to begin to develop the company strategy and culture. The remaining three were one-day meetings for the extended leadership group. At the end of those four events more than sixty leaders in the company had agreed on the company Mission, Vision, Values, and three-year Goals and had developed and implemented a short-term transition plan.
In year two, the company held one-day “reunions” about every six months. These reunions included up to 300 salaried and hourly colleagues from across the company. The purpose of these was to continue to strengthen the culture and to align more colleagues around the strategy. In each year these sessions were used to deepen the knowledge, understanding and practice of a key part of the culture. For example, one meeting focused on empowerment, another on leadership and, one on commitment.
For each acquisition, DTA developed a “24 hour” integration accelerator event to jump start the integration process. Participants in these sessions included the company leadership team, salaried and hourly colleagues from throughout the parent company, and leadership, salaried and hourly employees of the acquired company. These events helped build relationships among the key players in the transition, clarify key issues for the transition and short-term deliverables, set work groups into motion on activities such as HR policy integration and financial systems integration, and address some of the fears of everyone involved.
Results: Over four years the company made six acquisitions and grew from two locations to 40 sites. The company went from 400 employees to 9000 employees in that period. Revenues increased from $83M to in excess of $1.8B.
