When Life Gives you Lemons, Make Lemonade: Evolving your M&A and integration teams in the ‘new normal’

When Life Gives you Lemons, Make Lemonade: Evolving your M&A and integration teams in the ‘new normal’

Blogs and articles are already legion discussing the impact Coronavirus and the associated economic shutdown will have on M&A and integration; we’ve contributed to many ourselves. What we haven’t seen to date is enough on how M&A and integration teams within corporate and PE organisations are impacted, what will change for them, and how they should respond.

Some of our clients remain ‘full steam ahead’ in their integrations; like a sneeze: once you start, you usually have no choice but to finish! But while deal objectives (what and why), and the need for pace and momentum remain, the environment in which integration takes place (how) has fundamentally altered: Should we still try and conduct our ‘Day 1’ even though we can’t visit the acquired site or even bring people together? We’re still being pushed hard to deliver those revenue synergies, but how can we work with our customers and sales teams to realise cross-selling opportunities? Is this really the right time to integrate back-office organisations, change people’s roles and release headcount? And what about new challenges that require immediate attention?

Other internal teams in our network however, especially on the pre-deal side, have seen deal activity freeze in place, leaving them in indefinite limbo. Other than tidying up documentation, updating personal development plans or adding new backgrounds to Zoom profiles, what can – should – people in these teams usefully do while the train is stuck between stations?

As one of my favourite sayings goes, “It is not the strongest of species that survives, nor the most intelligent; but the one most responsive to change.” The partners and team at BTD have spent some of the past two weeks speaking with our network and honing our perspective on how internal M&A and integration teams can quickly adapt to the current situation and the potential ‘new world’ once this current crisis passes. We believe the leaders of these groups will intoned to address a balance of three imperatives:

  • Continue M&A and integration over the coming months of lockdown; spotting and overcoming particular issues raised and changes to priorities. More than simply group activities and workshops supported by new technology, this will require a reprioritisation of deal and integration benefits (and their associated business cases) from the aspirational to the achievable; a new look at integrated operating models, and new ways to build and maintain engagement, support and that all-important momentum vital to any successful transformation.
  • Use any ‘down time’ to review and enhance your own groups’ M&A and integration capability. Your team may now have a unique opportunity to refresh, retool and retrain: Gather lessons learned from past deals, update playbooks, expand skills in weaker parts of your process, develop new tools and templates.
  • Prepare for the post-virus M&A environment; activity will surge and opportunities abound. Whether in one month or six, M&A will return, but just as with the previous recession bearing different features. Cash-strapped businesses will be forced into sale or divestment, leading to great bargains…and poisoned pills. Risk-based reviews of existing supply chains to address ‘pandemic resiliency’ will lead to significant shifts in acquisition targets and assessment. Variable rates of economic recovery will impact the profile of global demand for your products for years to come. Businesses hoping they can just keep their heads down before getting back to business as usual will lose out to those who can successfully predict and adapt to the new world ahead of the pack.

BTD is conducting informal webinar discussions every week (13:00 UK time, Wednesdays), rotating between each of these three themes. These discussions, open to all at no cost, will focus on a particular topic within the theme, will last 45 minutes and will aim to include 3-4 guest panellists from our client network. Participants will be able to ask questions of the panel, and key learnings from each session will be published at the end of each week.

The first of these sessions will consider the topic: A plan never survives first contact with the enemy: How to rethink your integration programme to accommodate global lockdown – watch this space or contact carina.dejager@btd.consulting if you’d like to attend or contribute. Every participant will also trigger a BTD donation to GlobalGiving’s Coronavirus Relief Fund.

We hope you can join us and look forward to a lively and productive discussion.