leading integration
DESCRIPTION
Leading the Integration of an AcquisitionTRANSCRIPT
3 Needs of a Leader at the Defining Moment
Leading Integration
Successful Emphasis
PRE-COMBINATION
COMBINATION
POST-COMBINATION
POLITICAL
DAMAGE CONTROL
FINANCIAL
TYPICAL EMPHASIS
STRATEGIC
PLANNING
FLEXIBILITY
SUCCESSFUL EMPHASIS
THREE PHASES
3 Needs of a Leader at the Defining Moment
Transition Team
Transition TeamThe Transition Team Consists of:• Formalized and centralized integration
management through a designated leadership team
• Cross-functional teams organized for each acquisition as needed to plan, manage, and monitor integration activity
Transition TeamDefine Composition of the Transition
Team:• Authority, ability to allocate resources
in real-time as needed• Engagement, cross-systems
involvement• Perspective, knowledge of “what’s
working” from different domains
Transition TeamDesignate a Transition Leader:• Identify an individual who owns the
transition effort, preferably a temporary but full-time assignment
• High-potential leader• Inclusive, flexible, approachable
Transition TeamFirst Step of the Transition Team:• Craft a compelling vision for the
integration supported by defined Critical Success Factors (CSFs)
“Our vision for the new, integrated system is as follows….we’ll know we’ve succeeded when these CSFs…have been accomplished within this timeframe…”
Transition TeamSecond Step of the Transition Team:• Based on defined CSFs, determine the
composition of cross-functional teams organized to address the CSFs– High-potential leaders– Max-mix from across multiple
systems/functions– Temporary and part-time assignment
3 Needs of a Leader at the Defining Moment
Pre-Combination
Pre-Combination
TYPICAL EMPHASIS
PRE-COMBINATION FINANCIAL•Target Worth•Price Premium to Pay•Tax Implications•Structure Transaction•Combined Balance Sheet•Project Cash Flows•Return on Investment
STRATEGIC•Clear Definition of Specific Synergies Sought•Testing Assumptions Prior to Negotiations•Technical and Operational Experts “Scouting” and Gauging “Fit”•Financial Analysis
SUCCESSFUL EMPHASIS
THREEPHASES
Pre-CombinationFacilitated Senior Leadership Meetings• Focus on identifying potential problems in the
pre-combination phase that typically relate to strategy, core business, due diligence, estimated returns and costs
• Lead to a set of decisions regarding intentions, rationale, and criteria for integration
• Clarify strategy of the lead company or both parties as appropriate
• Detail the business case supporting the deal • Communicate critical success factors (CSFs)
including their importance and appropriate usage
Pre-CombinationSenior Leaders Must Craft a
Compelling Vision
“In failed transformations, you often find plenty of plans, directives, and programs but no vision.”- John P. Kotter PhD, “Leading Change: Why Transformation Efforts Fail,” Harvard Business Review, 1995 and Best of HBR, 2007
3 Needs of a Leader at the Defining Moment
Combination
Combination
COMBINATION POLITICAL•Buyer Decides How to Put Two Organization Together•Gaming•Personal Empire Building•Hiding Information•Culture Clash
PLANNING•Planning Emphasis•Clarified Critical Success Factors•Combination Options Discussed and Debated•Process Managed
TYPICAL EMPHASIS
SUCCESSFUL EMPHASIS
SECOND PHASE
CombinationFacilitated Transition Team Meetings• Focus on identifying the desired value-add and
critical success factors (CSFs) of the combination, discussing and debating combination options, and acknowledging culture clash and other affects of the combination on morale and performance
• Lead to implementation decisions• Result in design of an appropriate transition
structure
CombinationTransition Team Work • Cements transition structure and cross-
functional teams’ “rules of engagement”
• Spreads transition structure, communication, and management throughout the organization creating vertical and horizontal organizational alignment
• Provides a foundation for building organizational “change readiness” as needed to ease clash of cultures and promote cross-organization relations
Post-Combination
Post-Combination
POST-COMBINATION DAMAGE CONTROL•Rush Implementation•Stem Flow of Departing Talent •Mediate Culture Clash•Bolster Employee Morale•Handhold Unhappy Customers
TYPICAL EMPHASIS
FLEXIBILITY•Mid-course Corrections•Strategy Understood•Above-board Planning Process
SUCCESSFUL EMPHASIS
THIRD PHASE
Post-CombinationTransition Team Meetings • Focus on the extent to which business goals of
the combination are being achieved and on enhancing oversight via cross-functional relations
• Lead to meshing of policies and practices while building a culture by design
• Result in a tracking matrix to identify and measure the impact of the combination on productivity and organizational effectiveness
Senior Leadership• Regroups teams as needed to align
policies and practices• Reinforces the desired culture• Captures lessons from this combination
to better manage future ones
Post-Combination