current generic february 2002

Name

Integrum Presenters

April 7, 2015

IntegrumCorporate Integration Specialists

Company Name

Agenda

Introducing Integrum

Our approach to integration

Integrum qualifications

Introducing Integrum

Integrum helps to integrate businesses undergoing significant

change

A firm of experienced managers

With a passion for people and development of human capital

And a proven track record of successful implementation

Our FirmOur Clients

Businesses going through significant change such as M & A and restructuring

Have significant investment in human capital

Understand the issues of implementation

Research shows many M&A’s suffer poor post-completion performance

Create the vision

Do the deal

Align Leadership

Communicate

Implement

Plan Integration

Minority of M&A deals create shareholder valueMost at best neutral - many value destroying

83% correlation between implementation success and overall acquisition success

Majority of mergers are driven by fit rather than vision

Only 50% of mergers succeed in delivering their intended value

Human capital is ignored. 2/3 top management team leave within 5 years of mergers

Most companies admit their communication is inadequate and fail to get employee commitment for integration

Only 1 in 5 acquirers appear to have devised a clear implementation plan

Restructuring programmes often fail

Loss of key human capital

Customer alienation

Erosion of core values and organisation identity

The impact is greater in organisations where people are the principal asset

Assets

Financials…………………….

Brand………………………….

Goodwill………………………

People………………………..

Shareholder value…………...

TOTAL……………………..

Liabilities

Competitors…………………..

Head-hunters………………...

Absentee levels……………...

Costs of recruitment…………

Reduced Productivity……….

TOTAL……………………..

Why implementations fail

Inadequate planning

Culture ignored

Own agenda / self preservation

Integration manager has a day job

No ownership / Leadership vacuum

Poor communication

No process or methodology

No early win / Loss of momentum

Our approach to integration

Maximise Maximise shareholder shareholder

valuevalue

Programme ManagementProgramme Management

ProductsProducts CustomersCustomers ProcessesProcessesCultureCulture Human CapitalHuman Capital CommunicationCommunication

Integrum’s approach to integration

Programme ManagementProgramme ManagementMaximise Maximise shareholder shareholder

valuevalue

CultureCulture


Human Human CapitalCapital

CommsComms

ProductProduct CustomerCustomer ProcessProcess

Programme management acts as the “glue” in bringing about change

MonitoringMonitoring

Baseline performance metrics

Identify early win opportunities

Organisational temperature reading

CommunicationCommunication

Message, posters, literature Educate and share learning Role for CEO

Townhalls, walkabouts Feedback for ideas /

frustrations

ManagementManagement

Coordinate campaigns and change activities

Focal point for programme communication

Day-to-day issue management

Change implementationChange implementation

Coach / facilitate campaigns Create change events Workshops Leadership coaching Support opinion formers Develop appropriate tools Recognise / celebrate success

Programme Programme ManagementManagement

OfficeOffice

We manage the programme in a collaborative style

Integrum’s ContributionIntegrum’s Contribution

Integration expertise

Experienced integration managers

Overall strategic perspective

Collaborative style

Coaching and skills transfer

Client’s ContributionClient’s Contribution

Understanding of strategy and objectives

Willingness to invest in strong leadership

Commitment to drive implementation

Experience from previous initiatives

Knowledge of organisation and data

Joint client-Integrum teamJoint client-Integrum team

Increased client integration capabilityIncreased client integration capability

Client ownership of implementation solutions Client ownership of implementation solutions


Cultural AlignmentCultural AlignmentMaximise Maximise shareholder shareholder

valuevalue

CultureCulture



CommsComms


Cultural AlignmentCultural Alignment

Understanding of cultural similarities and difference Distinctive features of organisational behaviour – core values and vision Organisational structure - hindrance or help? Office environment Cross fertilisation of staff/ideas Assimilation of new entrants

Key Deliverables

Assess culture

Conduct audit/ fitIdentify icons/ champions

Change culture

Empower cultural change agentsCreate feedback loop

Implementation Steps

Define Integrated culture

Design ‘combined’ culturePlan culture change

Different cultures in organisations are assessed through a culture matrix

TaskOrientation

Relationship Orientation

45

22

022 45

Admin

HR

Client relationship managemen

t

SalesProduct

Development

Finance/actuarial

Compliance

Investment Management

IT

Marketing

Example

Linking strategy with culture

Diagnostic Implementation

Establish working groups to define future

culture

Continue cultural thermometer check

Continue objective buy in and cultural change programme

Cultural / organisation

Objectives/ strategy

Workshop to clarify strategy if necessary

Aligning cultures is fundamental to integration success

Integrum’s experience has shown Culture must be assessed together with organisation

vision and strategic objectives

There is a mixture of cultures across organisations, with many distinctive features that can help or hinder integration

Aligned leadership is pre-requisite to communicating the vision and fostering the core values of the new organisation

Culture change programmes can only be sustained through effective implementation of human capital and communication strategies


Human CapitalHuman CapitalMaximise Maximise shareholder shareholder

valuevalue



CommsComms


CultureCulture

Managing Human CapitalManaging Human Capital

Assess human capital

Reporting structureValue chainStaff appraisalsSkills gap analysis

Plan integration Structure Staff selection Retention strategy Skill development

Implement change

Align organisationAppointments, retentionTraining HR policies


Identification of key human capital in value chain Recommendations on structure/governance Training and skill development plan Three month Integration plan for :

Retention/redeployment/recruitment Alignment of HR policies

Key Deliverables

Integration of human capital - Value chain assessment

Customer Retention

Technical Skills

Leadership

Customer Acquisition

Functional Functional HeadsHeads

Middle Middle ManagementManagement

Technical Technical

StaffStaff

Customer Customer RelationshipsRelationships

Acquisition value of human capital: Acquisition value of human capital: LeadershipLeadershipNew skillsNew skillsNew customersNew customers

Sales Sales StaffStaff

Integration of human capital - Selection and development

Three month integration plan

Identify key Identify key processes going processes going

forwardforward

Identify key people Identify key people from value chain from value chain

analysisanalysis

Objective appraisal programme

Fast-track exit Fast-track exit plan for leaversplan for leavers

Selection of key people

Motivation / retention strategy

Leadership Leadership AnalysisAnalysis Skill Gap analysisSkill Gap analysis

Recruitment / Development plan

Integration of human capital - Aligning HR policies

Three month integration plan (cont)

HR Policies HR Policies Business BBusiness B

HR Policies HR Policies Business ABusiness A

Align to match business strategy

Best practiceBenchmark


CommunicationCommunicationMaximise Maximise shareholder shareholder

valuevalue



CommsComms


CultureCulture

Managing CommunicationManaging Communication

Audit communication

Sources/Channels BarriersBranding

Deliver integration messages

Develop message

Develop formal and informal channels

Distribute

Embed two way communication

Rollout cultural and psychological messagesCreate feedback loops


Internal and external communication plan Selection and dissemination of messages

Active distribution for targeted audience Available sources for information

Breakdown of silos through cross-functional activities Feedback loops

Key Deliverables

Communication planning is key

CEO(acquired)

Business Heads

CEO(acquiring)

Functional Heads

All staffKey customer

servicingSales staff Customer

WhereWhenHowMessagePreparation needed - First 24h is crucial

Logistics

Three month communication plan


How Communication really works Key Channels (formal and informal) Key Sources (credible and rumours)


How Communication really works Key Channels (formal and informal) Key Sources (credible and rumours)

Key messages to put across Global/Functional/Team/Individual


Creating a feedback loop

Develop message and Roll out plan

Assess what people really think

Provide feedback

Fine tune messageFine tune message


Product, Customer and Product, Customer and Process IntegrationProcess Integration

Maximise Maximise shareholder shareholder

valuevalue



CommsComms


CultureCulture

Implementing product, customer and Implementing product, customer and process integrationprocess integration

Develop client/ product plan

Review x-functional processes

Establish x- functional teams

Communicate implementation

Implement integration tasks

Pilot / roll-out early wins


Cross-functional product and client teams New process workshops Capture of cross-sell and customer relationship opportunities Cultural attributes required to support brand Roll out of client/product plan by product area

Key Deliverables


Monitoring and ReportingMonitoring and ReportingMaximise Maximise shareholder shareholder

valuevalue



CommunicCommunicationation


CultureCulture

Benchmarking - Hard Measures

Thermometer readings

MEASURE Actual Target Delta Comment

ProfitROCERisk ExposureRecruitment costsRelocation CostsRedundancy CostsCost savings run rateCustomer RetentionStaff RetentionAbsentee Levels

Benchmarking - Soft Measures

Thermometer readings

MEASURE Actual Target Delta Comment

Staff moraleDecibel levelCustomer feedbackAnalysts commentsPress coverageEffectiveness of internal communications

Integrum’s Qualifications

What We Bring

EXPERIENCED MANAGEMENT RESOURCE

Integrum - Skills

JOHN SUNDERLAND

BEN DE HALDEVANG

KAYE SQUIRES

Ex chief executive ANZ investment Bank; previously occupied a number of senior executive positions at Barclays and BZW in Europe, Far East and USA. 21 years experience in wholesale and investment banking.

Ex partner of Richmond & Co, with 10 years of executive search experience within the financial services and professional services industries. Ben has spent much of his career in USA, Australia and Switzerland

35 years in corporate and investment banking. Kaye spent the last 10 years working at senior management within Barclays/BZW, where the majority of his work was focused on organisational design and structure globally.

Integrum - Skills

JULIE PERRIN

MASSOUD JANEKEH

JAMES GARTHWAITE

12 years working in strategy and strategic marketing. Julie started her career as a consultant with Bain & Co, before obtaining her MBA from INSEAD. Latterly she was Head of Retail Innovations at Shell, where she introduced customer focussed change

12 years of industry and consulting experience covering strategy, restructuring, project management and cost reduction with ICI, Zeneca and AT Kearney. Massoud is a PhD in Engineering and MBA from Oxford University

11 years in corporate communications with Brunswick as Associate Partner, working with FTSEs and also smaller companies to devise and implement communications programmes. MBA Cranfield, 1992.

Integrum - Skills

JOHAN HATTINGH

RICHARD BARKER

MIKE HARRISON

20 years in merchant and investment banking at Director and MD levels, focusing on treasury, fixed income and derivatives, most recently as Global Head of Capital Markets at ANZ Investment Bank. Previously held senior positions with NatWest, and Hill Samuel

7 years in corporate strategy and planning, within management consultancy and investment banking with ANZ and AT Kearney (Mitchell Madison).

32 years in the insurance underwriting and broking sectors. Ex MD of Sedgwick’s UK Retail Businesses following a period as Group HR Director. In 1999 he led the successful merger of Marsh and Sedgwick’s and was appointed its Chief Administration Officer

IntegrumNon Executive Directors

JIM BEST

MALCOLM LE MAY

CLIFTON MELVIN

IAIN LITTLE

What We Bring


KEY INTEGRATION SKILLS

What We Bring



DISCIPLINED PROCESS

What We Bring



DISCIPLINED PROCESS

PROVEN TRACKRECORD

Integrum has a proven experience in integration of financial services firms

Merrill Lynch Cultural audit to assist with retention and motivation of key

people in Research division Design and implementation of improvement plan

ING Barings Management of Charterhouse integration Project management, culture, branding and

communications, HR

…/


Groupama UK fund managers implementing new initiatives Review/recommendations on cultural adaptability and

people

WestLB Internal restructure to form new global financial markets

division Brief covers culture, communications, project management

…/


HBOS Treasury Services Complete integration of Bank of Scotland and Halifax

Treasuries Project encompassed strategy, programme management,

culture, communications and the appraisal processes Review of sales team capability and customer relationship

management development



DISCIPLINED PROCESS

PROVEN TRACKRECORD

What We Bring

INDEPENDENCE & OBJECTIVITY

A Differentiated Offering

Focus on implementation

Financial Services Specialists

Passion for people

Resources who’ve done it

Success based remuneration

Appendix

Case studiesCase studiesProprietary toolsProprietary toolsProject structure Project structure


Case studiesCase studies

Case study 1 : Integration of two financial institutions

Accelerate development of UK investment banking business Expand product offering of European equities Increase revenues from cross-selling

Merger Objectives

Increased revenues through integrated client management Exploited cross-sell opportunities to expand product offerings Sustained implementation by creating integrated teams Achieved low staff attrition

Delivered key integration objectives in 3 months

Integration Benefits

Case study 2 : Implementation of human capital strategy

Maintain growth and service leadership Get buy-in and commitment to corporate vision and values Create an environment to retain and develop the staff Increase productivity through cross-functional activities

Strategic Objectives

Belief in management and their commitment Better understanding of strategy and vision down the organisation Improved cross-functional relationship Development of a learning culture

Increased productivity and staff morale

Implementation Benefits


Proprietary tools and Proprietary tools and techniquestechniques

Proprietary tools and techniques

Integration Interview Guides Management interview aid Support document to diagnostic questionnaire

Culture Assessment Methodology “How To” guide for cultural assessment Culture change strategies

Integration Programme Management Performance baselining Integration methodology

Publication and Intellectual Capital M&A commentary and expert advice Published articles in business and finance journals


Project structureProject structure

Integration Committee

Integrum Project Manager

Product/Client/Process Teams

Human CapitalTeam

CommunicationTeam

Project Director

Project structure

CultureTeam

Detailed back up slides

Integrum’s Integration MethodologyIntegrum’s Integration Methodology

ImplementationRecommendation

Performance baselining

Cultural fit and integration assessment

Communication planning

Business case

Implementation planning

Programme Management

Cultural Alignment

Clients and Products Integration

Human Capital Management

Communication Management

Case Study 2 : Implementation of human capital strategy

• Major global investment bank

• Significant investment in Human Capital

• Traditionally organised in a rigid structure with many functional silos

• Ad hoc HR policies•No clear career path •Ineffective recruitment, training, performance measure

• Staff turnover an issue

Client Situation

• Developed human capital strategy to address retention, recruitment and development

• Identified systems and communication infra-structural needs for transformation

• Set up cross-functional teams across divisions

• Created mentoring/ coaching scheme for managers

• Developed new reward system

Integrum’s Approach

• Belief in management and their commitment

• Improvement in productivity

• Better understanding of strategy and vision down the organisation

• Improved cross-functional relationship

• Development of a learning culture

• Increased productivity and staff morale

Benefits

We use a number of tools to asses culture. A culture matrix will be used to

map the behaviours….

High

Low High

TaskOrientation

Relationship Orientation

High Task Culture

• Focus on getting the work done at any cost

• High concern for results• Low concern for people

High Performance Culture

• Focus on getting the work done while meeting people’s needs

• Equal concern for people and results

Low Task and Low Relationship Culture

• Ambiguous goals• Concern for self• Low sense of quality

High Relationship Culture

• Focus on social needs• High concern for people• Lower concern for results

We will develop structured interviews to address key integration issues and assess

the fit of the two corporate cultures

Cultural Assessment

General business

Culture

Management processes and style

Personal Aspirations

Communication

• How effectively does the current decision process help you in managing your function?

• How effectively and how quickly are new entrants assimilated into your team?

• What impact do you think implementation of the merger plan will have on the present culture?

• Do you see any personal benefit (or loss) in the merger? How would you mitigate any negative impact?

• Are you satisfied with the communication of the integration process? How do you manage communication with your clients?

• How are strategies set and implemented in the current organisation?

M&A Example

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Documents