To CEOs & CFOs

Did you read the page entitled “Start Here?”  If not, do it.  Yes, now.

Okay, now let’s cover a couple of real basics just to make sure you’re in the “right church.”

  1. Once again: integrating a business is not the same as running it; it’s just not.  So you need a separate, focused process to do that. Separate people, separate skill sets, separate rewards.
  2. Do not use either your (or the target’s) best manager to run the integration process.  Why? Because you need their talents to focus on and run their businesses and – as I said – you need different talents to integrate the two.
  3. That will cost money; deal with it.  Think of it like an insurance policy … against dropping balls in your current operations and against mismanaging your integration process.  You are a senior executive; you know about managing risk.  What is it worth to you to increase the likelihood that your acquisition actually is a success?
  4. Integration is a team effort.  It requires a team leader (the more experienced at integrations the better) and, like every other kind of team, specialists in a variety of areas.  The exact variety should be based on the strategic needs and operational characteristics of each acquisition.  It will not be the same every time.  The sports metaphor continues useful here: You own the team.  You set the tone for it but the team leader is the coach.  He or she is in charge of it day-to-day.
  5. The earlier you bring the team into the integration process, the greater the likelihood of achieving your objectives for the acquisition.  (Read that again.) I do not mean X days before closing versus Y days; I mean making sure they actively participate in the strategic sessions that give rise to acquisition choices, to the decisions to proceed, and to the structuring and pricing of the deal.  Yes, THAT early.  (Review point #3.)
  6. During these early phases of an acquisition, make sure you listen to the team.  Actively probe their input.  Are there things that they see in the deal that give them pause as to its success potential?  Are there things that should be weighed into the pricing? Do they see anything that says, “Do not do this deal?”  Listen to them.
  7. Most of the deal execution and closing process involves very tangible elements: exact numbers and projections, exact legal wording, exact regulatory filings.  DO NOT let the exactness of those elements seduce you into thinking that the softer sides of the process are not of equal importance. There are many “soft” elements that can lift up or weigh down your deal’s chances of success.
  8. Corporate culture is one of them  It is a real phenomenon and you underplay it at your peril. If your career path has leaned toward numbers or legal briefs, you may just need to trust me on this one.  Or try this: imagine, say, that your kid came home married to someone who’d grown up in a hut in some Amazon jungle; you might be very happy for their love but you would be right to worry about the chances of their union being lifelong. Yes, cultural differences are soft but they can be very hard.
  9. Never – regardless of the minute-to-minute turmoil – forget the strategic intent of your acquisition.   And if you can’t articulate it in a few words, stop here and figure that part out.  Without a clear vision on and articulation of the strategic purpose of the acquisition, you will not be able to lead it to success.  Why? Because there are so many nitty details that your team will be focused on that one important part of your mission as the metaphorical team owner will be to make sure that they too never forget the strategic intent, the Big Picture.
  10. Communicate, communicate, communicate.  Your vision, your confidence, your concerns (yes), your timetable, your support of your team, all of it.  And be ready to travel to take that communication right into the face of your key stakeholders, whether they be employees, investors, customers, suppliers or whomever.
  11. Do not let up… even when the sailing seems to have become smooth.  Really effective acquisition integration usually takes 12-18 months and complex ones can take much longer.  But the point is to succeed at it, not just to be done with it.  And sometimes the surface indicators are not as they seem.  Keep going.  Not necessarily at full bore forever, but consistently, for a good long time.  You’ll be glad you did.

That’s enough for now.

QUICK REVIEW: You will need a separate, experienced integration team with its own empowered leader.  You should bring them in early and keep them working long.  You should attend to the softer elements of the business and the process as thoroughly as you do to the more measurable ones.  And you should be waving the flag of strategic intent at all times with clear and frequent communication.  Nicely done.

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One thought on “To CEOs & CFOs

  1. Pingback: Nine Points to Consider; Ten Really | The Merger Verger

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