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M&A – Gold at the end of the Rainbow?

Tim Carpenter 26 Apr 2011
Posted by Tim Carpenter

So the deal has gone through, your investors have slapped you on the back and you have the keys to your new organisation. Trouble is, your backers want to be certain their investment is among the 50% of deals that provide them with a return. And the CEO is pretty keen as well to claim credit for the benefits you’re on the hook to deliver. Nothing new there! 

To ensure real success the integration approach needs to embrace new emerging trends and robust support from an experienced integration team partner providing can-do, hands on delivery working to a great plan.
 
Another emerging trend is acceptance that not all the benefits to be wrung out of the integration can be anticipated or identified ahead of day 1. This is particularly the case, of course, in contested takeovers in which the opportunity for due diligence is limited. Thus, in addition to the normal task of robust and active risk management to secure planned objectives, the post merger integration team should have an open, creative and can-do approach towards maximising new opportunities as they appear.

Achieving this is a balancing act between focus on delivery of promised benefits in a situation in which there is never enough resource to go around anyway, and marshalling and managing enthusiasm to capture the full scale of the opportunity. Success here rests on proven systems and experience.

Comments

10 May 2011 12:14 Niki Duggan says

Have you considered whether you need an integration communication strategy? Have you any advice?

11 May 2011 10:32 Tim Carpenter says

The Gold at the End of the Rainbow piece started from the premise that the normal textbook integration stuff was already in place. That would certainly include well thought through comms as part of an overall stakeholder management exercise. See M&A docs in our library for more.
Subjective experience (I've not researched it) suggests that different types of organisation have varying degrees of enthusiasm for the role of comms in integration and other similar change situations. Naturally, comms, marketing etc led companies tend to 'get it' and adopt sufficient effort to the comms activity. Other less articulate style organisations often don't.
Whoever you are working for / with, be prepared to have to champion more-good-comms-now. There never seems to be enough.

24 May 2011 18:49 George Smith says

A well thought through communication strategy is crucial to the success of any M&A process. It is often developed as part of the change management process so you don't always see it on M&A charts. You will need to look at all of the stakeholders to plan this out from regulators, unions, staff and customers. As Tim says there is never enough communication and you may be constrained by legal consultation processes but as recent gaffs by politicians show winging it is not an option that works very well.

29 June 2011 16:58 Sean McDonald says

Niki,

Tim and George are correct. Meticulous planning of communications is an integral part of the integration process. I led a Chaucer Project Office in the US last year supporting the integration of a carved out business unit into our client's organisation.

We worked closely with both the client and seller communications teams to ensure consistency of messages to employees and existing internal stakeholders from deal announcement all the way through to closure and beyond.

For the day of announcement, we knew exactly who was where, saying what and to whom, across three different time zones in 30 minute slots.

Post close, regular open communication sessions with both the acquired employees and those remaining with the seller were fundamental to a successful integration and transition.

And not forgetting that communication is 10% verbal and 90% body language so we also developed strategies for ensuring that our client's leaders were literally 'walking the talk' and were actively displaying the organisation's core values.

It is the old saying - you never get a second chance to make a first impression, so very careful planning and scripting of first engagement with acquired staff is critical for setting a sound foundation for moving forward.

Hope this helps.

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