20 Essential Requirements for Success
by Mark Herndon, Chairman of the M&A Leadership Council
We have said it, you have said it, we have all said it. Let’s say it together one more time: “There is NO “cookie-cutter,” formulaic approach to M&A integration success.” There are, however, MANY fundamentally important and essential requirements for success that stand-out as guideposts. These guideposts serve as predictive indicators of success. If you know them – if you apply them. If you are good at them -- your personal and organizational prospects for success go WAY up.
That’s the purpose of the M&A Leadership Council’s training program, The Art of M&A® for Integration Leaders: Mastering the Fundamentals. To provide you and your organization with a bona fide, best-practice viewpoint about what it takes to consistently produce superior business results through integration. This 10.5-hour live-online course is packed with practical insights, best practices, samples, and case examples. Plus, we’ll share a ton of war stories, lessons learned and take-away applications across every phase of an M&A. For brevity’s sake, we will not cover all 20 essential requirements in this article. We think you’ll agree there is so much content and value here that it will make a demonstrable difference in how your organization thinks about and conducts integration. More importantly – this learning can help you improve your ability to execute integration for maximum business results. Join us January 17-19, 2023 via Zoom. More info here.
Don’t just take my word for it. Here is what a few recent participants of this live-online training program said in their course evaluations:
“Amazing, I love hearing all your stories, best-practices, etc. Truly impressed with this program and appreciate everything I am learning.”
“This was the most knowledgeable group of presenters that I have come across yet in the field of M&A. Their expertise and ability to present in an understandable and engaging manner is highly appreciated!"
For now, let me provide a brief highlight of 10 of the 20 essential requirements we will cover in detail during The Art of M&A® for Integration Leaders: Mastering the Fundamentals:
1. Establish your internal M&A capability as a “business process for growth” vs. transaction approach. Surprisingly, even many highly experienced acquirers have never documented the baseline business process of an end-to-end M&A from strategy and targeting to long-term value creation and everything in between. Don’t worry; this course will provide a generic six-phase model that has been used to train thousands of executives. Based on that M&A Lifecycle Framework, we’ll discuss other fundamentally important capability components, including resourcing, governance, what your playbook should include, using purpose-built M&A software solutions, and of course, education and skill-training for your internal resource.
2. Shift integration “left” by engaging the dedicated integration lead and program manager in meaningful due diligence roles. If your integration leaders don’t get involved until after due diligence is over – you’ll never catch up. There are three essential roles we recommend for your integration leaders:
- Supporting or running the Diligence Management Office (DMO).
- Completing specific due diligence assessment on the TargetCo’s operating model and inherent strengths – sometimes called “secret sauce”.
- Capturing all essential integration related issues, risks, decisions needed as a fast launch and bridge to integration.
3. Conduct a meaningful culture scan. Let’s be honest. Culture is STILL one of the top five M&A failure factors. For all the talk about culture, there are very few meaningful, practical, and applicable ACTIONS on culture. We will help you change that.
4. Develop a comprehensive “Integration Strategy Framework” BEFORE you announce and close the deal. In all our research and client engagements over the last 20 years, this one best practice has been the most “missing in action.” It is also the single most instrumental best practice in producing superior business results. We will cover when you should create your Integration Strategy Framework (ISF), who should be involved, and what it consists of. We will look at how and when to engage your TargetCo executive team in these discussions. Most importantly, we will discuss what we call the “Concept of Integration,” which provides specific strategic guidance on dozens of key integration decisions to ensure tight linkage and alignment between your acquisition deal thesis and actual integration plans and execution details.
5. At announcement – “visualize, mobilize, and stabilize” for maximum results. If you are after maximum integration results, plan and execute a more strategic announcement day. Reject the traditional corporate pablum and “air sandwiches.”. Instead, apply our the three key requirements for announcement day success. We like to say you have to “visualize, mobilize, and stabilize.” Most organizations stop at visualize – which is just to say communicate the bread and butter of what the deal is all about. To drive results you have to mobilize your integration process and leaders immediately. You must stabilize both employee teams, vendors, and partners. Does this work if you do simultaneous close and announce deals? Yes, and we will talk about how. Does this approach fully comply with anti-trust and gun-jumping laws prior to closing? Yes, and we will show you what you can and cannot do pre-closing.
6. Launch integration planning to maximize business results. Did you know that the WAY you launch your joint integration planning initiative has a direct link to business results? We will show you how. Our research – and 20 years of on-the-ground experience – demonstrate better planning, faster integration, and most importantly, vastly improved business results IF you follow this approach to launch joint integration planning.
7. Conduct integration discovery. Most organizations make a huge mistake by jumping directly from due diligence and announcement immediately to detailed integration planning. Frankly, your organization and the TargetCo are not yet at a point of understanding of the counterpart’s operating model. No matter how effective your due diligence has been, at this point in the process there just won’t be adequate insight into systems, processes, data, applications, organization, culture, talent and distinctive capabilities – all of which are required to start effective integration planning. We will share how to conduct this critical discovery.
8. Get Day 1 right. Can I share some friendly advice? You’ve got to get Day 1 right. Really right. Not just OK, Not just “no screw-ups.” Far too many organizations “fumble on the goal-line” by doing the standard Town Hall meetings without advancing the ball on business results. You’ve got to demonstrate the value-proposition of the deal to key customers and prospects. You’ve got to engage employees in meaningful ways that drive the kind of employee experience, onboarding and collaboration that enables true business effectiveness. We’ll show you how.
9. Focus integration on true business results and value creation, not just integration milestones. In 2020, Harvard Business Review stated that while over $2 trillion was spent on acquisitions annually, between 70-90% failed to achieve the full strategic or financial results anticipated. We’ll help you focus all aspects of integration, from start to finish, on identifying and executing your desired business results. Hint: a key process we will recommend – the Value Driver Dashboard, which is a simple solution that drives the post-close organization directly toward your deal thesis objectives with clarity, accountability, and focus.
10. Finish strong. This is one of the most important phases and essential requirements for maximizing integration results. There is a final phase to integration that far too many organizations ignore. They either forget, get distracted or fatigued, and as a result, they blow-it at the most important juncture. Frankly, there are a lot of long-term integration requirements fundamental for success that may take 12-24 months – or longer, depending on deal size and complexity. Capturing that value and executing the long-term requirements essentially requires a “re-scope, re-launch and re-resourcing” of your integration. We will show you best practices for success.
Do you have specific questions about the potential fit or applicability for you or your organization? Let’s talk! Send me an email and we’ll connect at [email protected].
We look forward to sharing these resources and the rest of the top 20 Essential Requirements at The Art of M&A® for Integration Leaders: Mastering the Fundamentals. We hope you’ll join us.