post acquisition integration mike robinson business mentor

Post Acquisition Integration

Mike RobinsonBusiness Mentor

Challenges of Acquisition

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Only 23 % of all acquisitions earn their cost of capital

In acquired companies 47% of executives leave within

the first year and 75% leave in the first three years

Projected synergies not achieved in 70% of cases

1/3 of acquisitions achieve an increase in shareholder

value, a 1/3 destroy value and a 1/3 do not meet

expectations

In the first four to eight months following a deal

productivity can be reduced by up to 50%

Sources: PWC, Wharton Management School, Watson Wyatt Worldwide

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1. Over focus on the legal and financial due diligence

2. Unrealistic expectations

3. Failure to integrate expeditiously

4. Lack of shared vision

5. Conflicting corporate or national cultures

6. Not investing adequate resources to complete the integration

7. Assuming the talent is better in the acquiring company

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7 Deadly Sins of Integration

A study of 190 CEOs, CFOs and other top executives reported that,

“cultural incompatibility is consistently rated as the greatest barrier to successful integration but that research on cultural factors is the least likely to be done as an aspect of due diligence”

Source: Watson Wyatt Worldwide

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Challenges of Acquisition

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Resources for Integration

Management elasticity

Management capability

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Identifying the right targetInform customers as soon as possibleCommit resources to the integration process earlyRecognise the complexity of the integration process

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Avoiding the seven deadly sins

Pre- close Completion Integration

Slow start

Emergent undiscovered risks/issues generating re-work

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Application of resources for integration

Pre- close Completion Integration

Slow start

Emergent undiscovered risks/issues generating re-work

Early Investment

Coasting Home

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Application of resources for integration

Create a sense of velocityInvolve managers from both organisationsTake time to really understand the target organisation

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Avoiding the seven deadly sins

Who conducts your salary appraisal?

Who do you go to when things go wrong?

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Ask two key questions

10% of an organisation’s knowledge is explicit.

90% of an organisation’s knowledge is implicit.

Organisations frequently do not codify their tacit knowledge.

Source : Professor Nokana

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Knowledge Management

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Where is Wally?

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Where is Wally?

Develop a campaign approach to integration

Develop a meaningful communication plan

Take a proactive approach to building the new team

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Avoiding the seven deadly sins

PerformingNormingStormingForming

Comm

itment to the teamTe

am o

utpu

ts -

perf

orm

ance

Developing the Performance of a New Team post-

acquisition

Ben Ainslie’s Role in Winning the America’s Cup

Ben Ainslie’s Role in Winning the America’s Cup

Sept 13 Oracle Team US 8-1 down in the series against NZ

Bold decision to sack the existing tactician

Ben Ainslie appointed to takeover

His impact was immediate on the team

The team won the next 8 races to take the America’s Cup

First Britain to be in a winning boat for 110 years

"The Americans were beaten until Ben joined the boat," says Sir Knox-Johnston.

"Ben may be risking his life if he visits New Zealand, but there's no question it was Ben's arrival which changed the chemistry completely." www.avondale.co.uk

Ben Ainslie’s Role in Winning the America’s Cup

Sir Alex Ferguson Man Utd 86-13

26.5 years with Manchester United

38 Trophies won

The club had a reputation for players drinking and living the “playboy” lifestyle when Alex Ferguson arrived

Sir Alex paid attention to all issues in the club

Re-established discipline in the club

Built the foundations for succession planning

Removed individuals who did not display the norms

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Sir Alex Ferguson’s Record

David Moyse – Manchester United

Lasted less than ten months in post

Finished 7th in Premier League

Louis van Gaal ……

Think long … but not too long

Think hard

Be bold

Act decisively

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Conclusion