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Post-Merger Integration Articles written for Intralinks

Article 1 for Intralinks

Delivering Growth During M&A Integration

Nearly all mergers and acquisitions (M&A) are about growth or have some sort of growth component. Most people I speak with have a high-level understanding of the key M&A growth drivers, yet many cannot deliver it. So how can buyers achieve the synergies that drive growth during M&A integration? There are many levers that drive a successful outcome, but there are three simple steps tied to the sales function that are critical:

Managing sales force consolidation and account management — effectively combining the sales forces and enabling them to work as one team.  Reconciling compensation plans — money motivates and achieving an equitable plan isn’t always easy.  Promoting opportunities for cross-selling and upselling without those serving as a distraction to both the sales team and the customer.


Sales Force Consolidation

Combining two unique sales organizations can be a challenging and daunting task. In my experience, the best thing to do is act quickly and decisively, as that ensures that a firm leadership structure is in place. Begin by collecting all pertinent information from both companies, such as the account management structure, organisational charts and reporting schedules, as well as key compensation data.

This information should help you build a plan to ensure that on Day 1 there won’t be two account managers heading off to meet with the same customer. Not only would this make the newly combined organisation look unprofessional, but it could also erode customer confidence in the continuity of service.


Compensation Planning

The key to sales growth post-merger integration lies with each individual sales person — regardless of the side of the deal, pre-deal — remaining motivated. The sales team is likely to ask:

Do I still get the bonus for what I sold before the deal was announced?  Will my bonus stay the same until the deal is closed and new compensation plans have been agreed upon?  If there is a general sense of doubt or uncertainty among the sales force about compensation and pay out timing, there’s a significant risk of attrition.


Maximize Cross-sell and Upsell Opportunities

Alongside all of this, create an intertwined story where the value that each of the formerly separate companies delivers is evident to the customer.

Start by identifying three or four customers who are best suited to either cross-sell the new product or upsell. Help the sales person by providing clear context and details that he or she can easily communicate to the customer. Once you secure your first win, learn from that and target your next opportunity. Creating a success story that supports this combined value proposition is key — and make this happen fast. By creating this success story, you have started to build a virtuous upward spiral of growth.

I hope you find these sales team integration tips useful. I can’t tell you how many people fail to do these three simple things and, as a result, miss their synergy targets and ultimately fail to deliver the expected growth post-deal.


Article 2 for Intralinks

Mobilising Your M&A Integration

In my last blog, I discussed how to achieve growth during M&A integration by focusing on improving sales force consolidation, compensation planning and cross-sell and upsell opportunities. In this post, I’ll explain how to put your post-merger integration (PMI) strategy into action.

A common question I get from corporate development teams is at what point in the deal lifecycle they should start implementing an M&A integration process. The short answer: as early as possible. Timing, education and delivery are critical. Let’s explore some steps and best practices you can follow.


Start Early

Timing of the integration is critical — the earlier you begin, the earlier you can deliver on projected synergies. Every moment can mean additional profit. Integration planning should start many months before the deal is closed, with team mobilisation typically beginning once the deal is announced. Creating a detailed Gantt chart to map out the timeline can be an invaluable tool.


Educating Your Team

People are the key to delivery. The integration team needs to know and be comfortable with what they need to deliver and how their deliveries interact across other workstreams. Coordinating a broad pool of cross-functional teams is challenging, but critical to success.

An efficient way to manage this complex process is to define a clear set of integration goals and match numbers (synergies) with people. For example, set a goal that the Director of IT needs to deliver £X in synergies within 180 days after the deal is closed. With measureable goals like these, you can hold people accountable for milestone achievement and that drives results.

Timing, education and delivery are imperative for having a successful M&A integration process.


Article 3 for Intralinks

Delivering Synergies in M&A Integration Like a Pro

Delivering on the projected synergies in a transaction is how the success or failure of a deal will ultimately be measured. The key is to have a team of experienced people on your side who can deliver on the synergy forecasts that were mapped out in the models produced by the corporate development team.


Synergy Estimation

Many times, synergy estimates are based on imperfect information and guess work, but it doesn’t have to be that way. As I mentioned in my last post about mobilizing your PMI strategy, it all comes down to having the right people in place to make the assumptions a little closer to “perfect.” You need knowledgeable people on your cross-functional teams who have operational and PMI experience and can lead their respective groups to the projected milestones.

I recently spoke with a CIO who said, “We make the same mistake over and over again.” Don’t let this happen to you. Take advantage of the experience your team has and learn from your mistakes so you can make better assessments in the future.

There’s a logical sequence to synergy mapping that must to be followed. For instance, if you need to change an IT system, there’s other synergies that are tied to it which must happen first — so make sure changes happen in the right order.


Delivering Bad News

After your team completes its work estimating the potential synergies, you need to turn your high level integration synergies and strategic goals into detailed and executable plans. One head of M&A recently remarked to me, “We plan on removing 15% of our headcount post-deal; how should we do that?” The fact is, there’s no perfect answer to that question and few people find restructuring to be an enjoyable exercise. But, in PMI, restructuring and cutting headcount is simply something that may need to be done to achieve desired synergies.

If you find yourself in this situation, start by outlining how many people will be affected. Then, plan your strategy by country, division, business unit and function.

After making conscious decisions in terms of your strategy, speak with all of the department leads and inform them of the situation and proposed plan for restructuring. Then, ask for their feedback. Clear communication and decisive action are critical during the restructuring process (as is confidentiality) so it’s best to share information and gather input early as possible so that the key employees you want to retain are not left wondering about their status.


Speed of Delivery

Everyone knows that the faster you deliver synergies, the more value you realize. Time is money after all. In M&A integration, we have deadlines to hit and accelerating when you achieve them allows you to realize synergies ahead of schedule. To increase the odds of accelerated synergy realization, consider including on your PMI staff a team of experienced project managers who can manage the process carefully so that employees from both sides remain on track for key deliverables.

I also recommend providing integration teams with a structured set of tools to assist in facilitation of information exchange. Ideally, you want to be able to manage all of your information in a centralized repository that’s secure, with access to files provided on an as-needed basis. The tool you pick should capture all communications and documentation around a deal (so that you don’t have multiple spreadsheets/files laying around) and enable you to maintain a compliance archive throughout the deal lifecycle.