The S-3 Integration Model


Let’s say you are kicking off a new integration effort tomorrow. You’ve been tasked to lead this one – your first time as “pilot in command.” At 9 a.m., you’ll have 20–30 key leaders from both sides of the deal assembled to get acquainted, get briefed on the integration strategy and the CEO’s expectations, and then launch the planning process. On his way out of the office at 10 p.m., your head of BizDev drops by to make sure you will be ready to “get everybody on the same page.” You are in the hot seat. How do you quickly frame the approach that you know will put this integration on track for success?

"The model gets its name from the three hallmarks of skilled integrators:  speed, synergies and stabilizing the core business.”

There’s obviously lots of important things to emphasize, but one element I’d make sure to include in the kick-off deck is the M&A Partners S-3 Integration Model. Since every successful integration must start with strategy, that’s the obvious center point of this illustration, followed closely by detailed planning, effective communications and outstanding execution. Then it’s surrounded with effective leadership and decision making as evidenced by transparency; clear governance protocols, roles and responsibilities; and disciplined decision-making processes.

But the model gets its name from the three hallmarks of skilled integrators: speed, synergies and stabilizing the core business. We spoke about synergies in The Synergy Trap and will cover more on stabilizing the core business in an upcoming article. For now, let’s try to clear up some confusion on speed – specifically, how fast should you try to integrate?

This challenge was illustrated recently as we conducted what we call a Strategy & Readiness Assessment for a client. This diagnostic is focused on building internal M&A capabilities and allows us to evaluate deal history, methodology, prior results, issues to overcome and strengths to build on in order to help organizations take their M&A game to the next level of success.

Essentially, the CEO said, “What is taking so long to integrate? We must have the target company on our systems within six months at the latest.” Other senior executives on the leadership team mostly said, “Let’s slow it down, let’s get it right, what’s the rush? We have so many other priorities we can’t move any faster.” Which is right?

Our viewpoint is clearly in favor of speed. But be careful, there’s a difference between speed and insanity. Here are some tried and true principles to help you make the right decision with regard to the pace and timing of your next integration:

  • Focus on “accountable speed.” In other words, we should implement as fast as possible, but be governed by how fast we can implement well – and no faster.
  • Integrate quickly, but where it matters. Speed requires trade-offs. You can’t do everything at once, so focus on the highest priorities. Force non-essentials to wait.
  • Watch out for the integration “time warp.” It’s a proven change dynamic you need to know about. When it seems like things are moving at “light speed” to you on the buy-side, it often seems like “slow-mo” to those most impacted by the change.