M&A Integration Framework

Before Day Zero of closing the deal, we help investors and the appointed CEO build a communications plan, ensuring the market, clients, and employees know what to expect from the acquisition.

Once a a deal has closed, it is imperative that the acquisition is appropriately communicated internally and externally.  Shareholders, the market, and customers want to know how they will benefit from the unification of two companies.  Employees want to know how they are personally impacted.  Failure to communicate the goals and benefits of an acquisition can lead to customer defection and employee dissatisfaction.

We provide a communications template that is pre-populated with standard messaging that must occur immediately following the deal close. This template includes the messaging task, target dates to issue the communication, the appropriate channel to use, typical duration for composing and finalizing the message, and assigned resources responsible for message composition.

In addition to providing a communications template, we also provide professional writing services for composing communication messages to the market and to employees.

In order to achieve deal synergies, it is critical that employees, clients, and the market understand the purpose of the acquisition.

Using our established template and process, we work with investors and C-level executives to develop an integration charter that is intended for internal usage, but which can be re-purposed for external communication.  The charter substantiates the post-acquisition integration, and includes the following topics:

Purpose/Value Creation

Establishes the deal drivers up front, which communicates to employees and the market the purpose of the acquisition.

Vision

Articulates combined vision for the company and the anticipated market impact of the integration.

Mission

Addresses cultural differences and identifies high-level key integration work streams.

Success Criteria

Identifies key performance indicators upon which the integration will be measured.

Integration Management Office (IMO)

Determines project management methodology for administering the integration as a business process.

Resources

Identifies subject matter experts that will actively participate in the IMO.

Rules of Engagement

Details decision-making approaches and integration project guidelines.

In summary, the integration charter provides a framework from which all further integration activity is undertaken, ensuring resources are performing in a unified manner in order to achieve the deal synergies anticipated for the combined companies.

Once the project charter is complete, we establish the Integration Management Office (IMO), applying both disciplined and agile project management methodologies, and involving subject matter experts who are crucial to ensuring integration success.

A post-acquisition industry best practice is to manage the changes that must occur by following agile project management disciplines and utilizing an Integration Management Office (IMO) for project oversight.

 The IMO is formed with subject matter experts (SMEs) representing each functional area.  These SMEs are empowered with pre-approved decision-making capability and are responsible for ensuring integration tasks are implemented in their respective business units.  Additionally, the IMO is led by a senior-level Program Manager who instills agile project management disciplines, monitors progress of the integration, resolves issues, and reports directly to the Integration Steering Committee.  The Program Manager is often an inside or outside consultant with previous experience in M&A integration.

 We have in-depth expertise leading and/or participating in the IMO, having been involved in over 18 distinct M&A projects.  As a result, our intellectual property consists of a pre-populated playbook template we have developed for each functional area, replete with common integration milestones.  These playbooks facilitate the integration efforts as SMEs do not need to start with a blank Gantt chart, trying to create from scratch all of the many milestones that must be considered.  Playbooks are further enhanced following every integration in which we are engaged, and as a result are a proven and reliable source for building initial sprints.

 Additionally, we are experienced in successfully applying either traditional project management or agile disciplines to the integration management effort and can adapt depending on the preferred method for each integration engagement.  We begin, however, by recommending the following agile approach:

Prepare

Working with the IMO subject matter experts (SMEs), we organize the playbook into a logical grouping of work streams and prioritize those work streams into 100-day, 200-day and 300-day+ sprints.  Furthermore, inter- and intra-departmental dependencies are developed.  The sprint is then tracked using a selected project management tool.

Execute

IMO SMEs form sub-teams within their respective areas to refine and manage their integration work streams.  The IMO SME may choose to conduct daily stand up meetings or weekly project status reviews.  Standard project management disciplines are applied, including tracking their respective sprint schedule and maintaining risk and issue registries.

Adapt

We conduct weekly IMO reviews of critical milestone progress, and address any issues real-time.  Additionally, key performance indicators are monitored and reviewed, usually on a monthly basis.   At the end of the sprint, we work with the IMO team members to conduct a retrospective in order to facilitate lessons learned and to celebrate success.

Close

We close the IMO when either all work streams are integrated, or when the Steering Committee deems sufficient progress has been achieved.  Upon official close, a final retrospective meeting is conducted, lessons learned are documented, and success is celebrated.

We also create and facilitate a Steering Committee which provides executive oversight and drives the pace of IMO activities.

Another post-acquisition best practice is to establish a Steering Committee that provides executive oversight of the IMO.  The Steering Committee is responsible for setting the pace of the integration activity, approving the initial project plans, setting financial targets and budgets, and resolving complex issues requiring executive involvement.

Typical Steering Committee membership for small and medium size companies include: Chairman of the Board, CEO, CFO and the IMO Program Manager.

We have extensive experience interfacing with Integration Steering Committees and preparing and presenting IMO status on a routine basis.  We utilize standard templates we have developed and honed over years of managing integration projects, and understand what type of data and information is best presented to executive teams.

Announcements

Before Day Zero of closing the deal, we help investors and the appointed CEO build a communications plan, ensuring the market, clients, and employees know what to expect from the acquisition.

Integration Charter

We begin the integration activity by establishing a project charter to ensure all stakeholders are in alignment regarding the goals and objectives of the integration effort.

Integration Management Office (IMO)

Once the project charter is complete, we establish the Integration Management Office (IMO), applying both disciplined and agile project management methodologies, and involving subject matter experts who are crucial to ensuring integration success.

Steering Committee

We also create and facilitate a Steering Committee which provides executive oversight and drives the pace of IMO activities.

Assessment

We work with the CEO and his or her executive team to conduct an initial assessment of integration activity, evaluating anticipated differences and similarities between cultures, processes and procedures, products and solutions, and systems and tools.

Work Streams

Our intellectual property consists of pre-populated playbooks we have developed for each functional area, replete with common integration milestones.

Key Performance Indicators

We help to build and report key performance indicators (KPIs), thus measuring if the integration activity is achieving the critical success factors set forth in the project charter.

We work with the CEO and his or her executive team to conduct an initial assessment of integration activity, evaluating anticipated differences and similarities between cultures, processes and procedures, products and solutions, and systems and tools.

Immediately before kicking off the IMO, we meet with key stakeholders to conduct a high-level comparative analysis between the entities being merged, focusing on integration drivers, value creation, and customer and employee awareness and acceptance.  Typical assessments include evaluating:

Once the comparative analysis is complete, we produce a report that identifies best of breed practices, early win opportunities, and additional alignment prospects.  We also highlight issue and risk areas accompanied by mitigation recommendations.  After key stakeholders have reviewed and discussed the integration assessment, we build change management plans, action plans and milestones, all of which are then managed formally through the IMO.

Our intellectual property consists of pre-populated playbooks we have developed for each functional area, replete with common integration milestones.

When clients engage our services, they also receive our pre-populated playbooks containing common integration activities for each departmental area. These playbooks facilitate the integration efforts as SMEs do not need to start with a blank Gantt chart, trying to create from scratch all of the many milestones that must be considered.

Playbooks include work streams for:

Noteworthy is that these playbooks were developed based on years of M&A integration experience, working with numerous companies ranging from Fortune 500 to mid- and small-size businesses.  The playbooks are easily adaptable to an organization of any size.  Additionally, these playbooks facilitate the identification of high-value work streams that are then converted into actionable and traceable integration milestones.

We help to build and report key performance indicators (KPIs), thus measuring if the integration activity is achieving the critical success factors set forth in the project charter.

Included in our playbooks are standard key performance indicators (KPIs) for measuring integration success.  We work with the IMO subject matter experts to further adapt these metrics to their specific business units.

Our general approach is as follows:

1. KPIs must be quantifiable.  Our playbook provides a format that forces the IMO SMEs into defining objectives and targets, and a description of how success is realized.
2. Three to five KPIs per functional area are optimum.  Any more than this leads to measurement fatigue and does not add value to understanding integration progress.  Our playbook does include the top three KPIs for every functional area; however, we understand each organization is different and the standard KPIs are designed so that they can easily be replaced with a business-specific KPI.
3. Each KPI must be mapped to an integration driver.  If an integration driver does not exist for a KPI, then we need to ask ourselves why we are measuring and tracking it in the IMO.
4. KPIs are designed to reflect integration success.

In addition to our playbook which consists of the top three recommended KPIs for each functional area, we also provide a scorecard template that can be used when presenting to executive management.

Sprint Development

We manage the overall integration in 100-day sprints, thus ensuring rapid realization of high-value work streams.

Agile Project Management

In addition to using reliable and proven playbooks, we follow a disciplined yet agile project management approach.

Sprint Management

We recommend empowering the subject matter expert (SME) to manage the sprints for his or her respective area.

IMO subject matter expert works with his or her sub-team to analyze 100-day sprints.

• Focus is on high-value work streams, especially in the first 100 days
• Work streams have different levels of effort (as denoted by cell size)
• Work streams are grouped by business priority
• Each 100-day plan should deliver incremental value to the business

In addition to using reliable and proven playbooks, we follow a disciplined yet agile project management approach.

Agile project management certainly includes some of the traditional project management disciplines, including planning out milestones and tasks, monitoring project performance and control, developing task dependencies, assigning resources, and tracking issues and risks.  The difference between an agile and traditional project management approach in M&A integration is building deliverables that the organization may fully or partially utilize in increments, and incorporating an iterative mechanism that encourages feedback on work-in-progress.

Our process addresses the goal to deliver incremental value (e.g., 100-day sprints), and an iterative feedback mechanism (e.g., weekly IMO reviews and sprint retrospectives).

From an agile perspective, we also recommend utilizing Smartsheet for the project management tool.  This is because Smartsheet is easy to learn as it resembles MS Excel, and does require extensive project management expertise.  Additionally, because our playbooks are built in Excel, they are easily adapted and migrated into Smartsheet, which facilitates team engagement.

Note, however, that we can and do work with other project management tools and will adapt to the needs of our clients. We are well-versed in MS Project Management, Clarizen, and OmniPlan and are able and willing to utilize any of the standard project management tools on the market.

We recommend empowering the subject matter expert (SME) to manage the sprints for his or her respective area.

The quickest path to integration is to push decision-making as close to the work-at-hand as possible.

IMO subject matter experts (SME) essentially operate as sub-project managers, and are responsible for ensuring 100-Day milestones are delivered on time, with high quality, and with minimal disruption to the day-to-day business.  As a result, we encourage business leaders to empower the IMO SMEs with appropriate-level decision making capabilities in order to expedite the work-at-hand.

Specific sprint management responsibilities exercised by the IMO SME includes:

• Forming work stream teams
• Identifying priority integration features
• Tracking integration activity against 100-day sprints
• Coordinating cross-functional dependencies with other groups
• Performing local integration work effort
• Reporting status to Integration Program Manager

Review

At a minimum, we recommend a weekly IMO review is conducted with all subject matter experts.

Validate

Our agile process includes validating the top three critical milestones for each functional area.

Project Status

We informally report project status on a weekly basis (via email), and formally convey status to the Steering Committee on a bi-weekly basis.

Sprint Retrospective

We conduct retrospectives at the end of each sprint to ensure course corrections occur in real-time, rather than at the end of the integration timeline.

At a minimum, we recommend a weekly IMO review is conducted with all subject matter experts.

Each week, the IMO Program Manager conducts a 100-day sprint review with all of the subject matter experts.  Our recommended best practice is that the weekly sprint review be mandatory, and that each functional area present status for their top three milestone activities.  Without the weekly review, it is too easy for the tyranny of the urgent to overcome planned integration activities.  Project oversight is critical to ensuring that integration activity remains on track.

During the weekly review, issues and risks are also captured into a risk registry and addressed in real-time as much as possible.

Because we are adept at running the IMO, we have a proven methodology for conducting the weekly review meetings, including incorporating cross-geographical resources into the process.

Our agile process includes validating the top three critical milestones for each functional area.

100-Day plans can be dense and contain a minutia of detail that is only relevant to the IMO subject matter expert for a given department.

In order to ensure teams are focused on rapidly delivering incremental value, we recommend the top three critical milestones are reviewed in an IMO weekly meeting.  During this meeting, we validate that the intended objectives of the milestones are being met and that appropriate attention and resources are focused on those objectives.

Furthermore, during the weekly IMO review, key performance indicators are tracked to ensure the integration activity remains focused on deal drivers.  If a milestone exists that does not directly tie back to a deal driver, then we must ask ourselves why the milestone exists in the integration plan at all.

Additionally, resources are held accountable for delivering what they said they were going to deliver during a given timeframe.  Dates certainly slip in the best of planned projects, but purpose for slipping a date must be understood and a negotiation must occur to re-plan any activity.

We informally report project status on a weekly basis (via email), and formally convey status to the Steering Committee on a bi-weekly basis.

Each week, we communicate to all stakeholders the status of the 100-day sprint, as well as note issues and risks.  We also work with departmental Directors and V.P.s to address any integration roadblocks in order to accelerate resolution.

A best practice we also recommend is to conduct bi-weekly Steering Committee reviews, providing C-level executives with ongoing integration status.  Because the Steering Committee sets the pace for the integration, these bi-weekly reviews provide the opportunity to ensure appropriate priority, direction, and level of effort is occurring on the integration project.

We are experienced in presenting IMO status to Steering Committees and Board of Directors, and have in our tool house presentation templates geared toward executive messaging.

We conduct retrospectives at the end of each sprint to ensure course corrections occur in real-time, rather than at the end of the integration timeline.

We lead a sprint retrospective, addressing the holistic 100-day plan.  The sprint retrospective process includes:

Grooming the backlog

Not all milestones will complete in a 100-day cycle (some milestones actually will run the course of 300-days+); however, the expectation is that at a minimum, sub-tasks will be planned in a given sprint.  However, there are those times when planning is more art than science and not all sub-tasks or milestones will complete as planned.  In those situations, we groom the backlog and ensure re-planning occurs for the next 100-day sprint.

Capturing lessons learned at the end of the Sprint cycle

We lead the IMO in evaluating areas that worked well and areas requiring improvement.  We then document these learnings and institutionalize them before the next 100-day sprint cycle.

Recognizing individuals

It is important to recognize significant efforts from integration contributors, especially those that exceed normal expectations.  We work with the C-level executives to implement an appropriate rewards and recognition system related specifically to the IMO work.

Project Closure

We assist in transitioning the IMO into business as usual.

Document

Our clients receive project closure documentation.

Project Retrospective

We conduct a final retrospective to ensure lessons learned may be applied to future M&A integration activities.

We assist in transitioning the IMO into business as usual.

While integration activity can run for years (think product convergence), at some point the IMO should be officially closed and the integration run as business-as-usual.  After all, our clients should not need to retain our consulting services indefinitely.  We help make that transition occur in a seamless and transparent manner.

Working with the Steering Committee, we develop project closure criteria at the onset so everyone is on the same page.

While we are always privileged and honored to work with our clients, it is not our aim to become their full-time consulting house.  We desire for our clients to be self-sufficient and successful, and always hope for a positive case study and recommendation.

Our clients receive project closure documentation.

We ensure all project documentation is replicated on our client’s infrastructure, which may consist of a Box environment, zip file, or other project storage system.

Documentation typically includes all minutes of meetings, baseline project plans, evolving project plans, Steering Committee updates, risk and issue Registers, and any other artifacts deemed critical by our clients.

We also protect confidentiality by not sharing any M&A integration with other clients.

We conduct a final retrospective to ensure lessons learned may be applied to future M&A integration activities.

The project retrospective is similar to the sprint retrospective with the following noted changes:

Transitioning activities to normal business

Not all milestones will complete at the time the M&A integration project is deemed officially closed.  As an example, software product convergence often take years to finalize, but at some point, the convergence activity is documented in the product roadmap and thus no longer requires IMO oversight.  We transition outstanding integration activities to business units, and document the transition as part of project closure.

Capturing lessons learned at the end of the M&A integration project

We lead the IMO in evaluating areas that worked well and areas requiring improvement.  We then document and share all of the learnings with stakeholders.  The purpose in doing this is to ensure improvements are addressed in any future M&A activity.

Recognizing individuals

It is important to recognize significant efforts from integration contributors, especially those that exceed normal expectations.  We work with the C-level executives to implement an appropriate rewards and recognition system related specifically to the M&A integration completion.