The role of the Integration Manager in Mergers and Acquisitions

The role of the Integration Manager in Mergers and Acquisitions

Integration is the real deal. It takes a special person to make the deal real.

  • For CEO’s looking for the right person to integrate the next acquisition.
  • For Recruiters after a job description for this unique role.
  • For Executives with this career defining responsibility to compare.

2018 saw the highest level of M&A activity across the world since the global financial crisis. It’s a testament that M&A continues to be such a compelling way of boosting corporate earnings in the face of ever increasing technological, political and economic disruption. To get growth in a low growth environment M&A continues to be the answer!

However, the pressure to squeeze more and more value from deals never ceases. And it’s the post-acquisition integration that is the most challenging and crucial part of this exercise. Having a strategy and plan to realise value well ahead of deal close will certainly pay dividends. But the real pay day comes with having a person charged, early in the piece, with the execution of that plan and to be that special leader.

So, with stakes being so high when integrating a business, it’s worth looking at the role of the Integration Manager.

We believe this person is quite an interesting individual as it takes a number of unique and hard to find qualities to perform this role. They are based as much on personal characteristics as they are on technical skills. Let’s look at what we believe are the top 10 aspects of the Integration Manager role.

1. The integration function is not a 9-5 job

Firstly, anyone who takes on this kind of role must be prepared for several months of intense activity capable of consuming every waking hour. The Integration Manager is there to manage a transition period that needs to be fast and effective.

2. The Integration Manager has both freedom and accountability

The Integration Manager has the room to manoeuvre where other managers cannot. This provides great value but also a special responsibility. No one is going to tell the Integration Manager what to do, where to focus and who to contact. That person needs to take the initiative and make independent decisions.

This is where the Integration Manager can easily get lost, particularly if they haven’t done this before. Others are dependent on the Integration Manager providing clear direction and being capable of commanding the respect and allegiance of every employee. Developing the trust of as many people as possible is crucial to success in the role.

3. The Integration Manager manages the process, not the business

The Integration Manager typically does not have direct control of the critical business resources nor have P&L responsibility. While they have a keen interest in the monthly P&L to track the impact of integration on the business, instead they are held accountable for the creation and delivery of a disciplined integration strategy, process and value delivery plan.

4. Integration is much more than project management!

It’s pretty common to see integration treated as a project management exercise (Gantt charts, milestones & tasks) not realising, or perhaps not fully appreciating, that people’s lives and futures are being impacted. The problem is that unlike business assets people can’t be bought or sold the same way. The Integration Manager knows this and recognises that part of the task is to maintain allegiance while guiding people through uncharted territory.

Secondly, unlike traditional projects, it’s virtually impossible to connect or disconnect perfectly from the start. The integration cannot be wedded to project management tools and processes commonly found in organisations. Instead the Integration Manager must adapt and re-calibrate plans as the situation evolves.

Finally, the Integration Manager needs to focus squarely on what needs to be done to realise deal value, the ultimate goal of any merger or acquisition. While the focus of a project manager is on the milestone objective, the focus of an Integration Manager is on the business result.

5. The Integration Manager is an accomplished programme manager

So, it’s much more than project management – but within the integration plan there will be multiple projects of significant complexity that do need to be planned and implemented tightly. The Integration Manager not only needs to mobilise hundreds of people in numerous teams across multiple locations and motivate them to succeed, but also needs to continually balance the scope and pace of projects to ensure that the overall programme is focused on delivering the promised benefits as efficiently and effectively as possible within the limits of the business’s capacity and capability to change. In the M&A context, the management of the delivery of benefits and business value, coordinating and shaping a set of projects and business-as-usual activities and bringing people on the journey requires real accomplishment in programme management.

6. The Integration Manager makes the journey exciting

Sometimes there is no clear team. Often until organisational structures are clarified in the new organisation, team members may not be aware of who they may be reporting to so it’s the Integration Manager who is the person who needs to motivate and involve people through fragmented channels of authority. The ability to make the journey itself exciting is a vital skill.

7. The Integration Manager is emotionally and culturally intelligent

When integrating businesses there are likely to be plenty of gripe sessions and political lobbying. The Integration Manager needs to be able to appreciate the emotional and cultural issues involved, help others to deal with them constructively then manage them sensitively and decisively, maintaining the momentum of the overall programme.

Effective Integration Managers allow people to give vent to their feelings and then help them move on.

8. The Integration Manager is comfortable with ambiguity

The disconnecting and reconnecting of organisations can create times when people don’t know what they should be doing and what process to follow.

In these situations, the Integration Manager must be able to facilitate groups, mobilise people and agree quickly strategies that communicate and provide direction.

A key task is also to seek out chaos, decipher it and implement order through clear and coherent steps, tools and processes. This will help others navigate through uncertainty allowing them to operate effectively.

9. The Integration Manager is skilled in dealing with all organisational functions

The Integration Manager may not be directly involved the detailed integration of processes, systems and people but they must have broad exposure and fluency of the major issues within each function.

A typical integration will involve designing new organisation structures, modifying cultures, changing operating models, moving premises, integrating systems, consolidating products and services. The list goes on.

The Integration Manager does not need to be an expert in all functions (who is?) but makes a profound difference when they are fluent enough across all business areas to challenge and unearth new sources of value and places to transform.

10. The Integration Manager thinks like an Entrepreneur

Companies are frequently using M&A to transform themselves, not just grow. They’re doing it in order to survive and prosper in a stormy economic environment. There is often no alternative.

It therefore follows that delivering cost synergies only from a deal is simply not enough. At times of great change, the task is also to deliver new and enhanced capabilities, perhaps even, a complete overhaul of the operating model.

The Integration Manager knows that transformational delivery is an innovative exercise and needs to tread carefully; it isn’t easy and the risks are high. (Beware! Integration can be enemy of Innovation – more on this another time). The Integration Manager needs to think like an entrepreneur by taking small calculated commitments during the transformation journey. By doing so there’s opportunity to measure, learn and make tactical course corrections. It’s innovative, certainly entrepreneurial, but also disciplined and controlled.

In summary, the Integration Manager is someone who can:

  • Shepherd everyone through the uncharted territory the merging organisations must cross before they can function as one.
  • Act as consultant, facilitator, communicator, project manager, coach and bridge builder.
  • Relentlessly plan, focus and deliver shareholder value.

Mergers, acquisitions or divestments provides a unique situation to companies. Opportunities to increase value at pace comes with inherent risks, the primary risk being that this potential value is not realised at all.

BTD’s offering is different from other M&A consultancies in that our focus is on realisation of deal synergies by helping clients put good-quality thought into their integration or carve-out and separation plans. We help you address all aspects of planned organisational change, including culture, commercial and communications as well as the well-worn paths of people, process and product.

If a deal gives the opportunity for benefits, then our unique blend of leading process, team experience and nurturing of effective leadership behaviours offers a higher chance of success. We confirm the ‘why’, we plan and communicate the ‘how’ and we execute the ‘what’

BTD has led the way in M&A success since 2001. We have a net promoter score of over 70% with practice hubs in London, Frankfurt and Hong Kong as well as representatives in Austria, Australia and the United States.

 

Toby.tester@btd.consulting

https://btd.consulting/

 

 

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