04 Apr 6th Merger Integration Management Forum – Amsterdam, March 2014: A welcome note of realism
Late last month I attended the above event run by Thought Leader Global. I have been to quite a few of these and over the years have seen quite a few hot topics raised for a while only to die down as they get resolved and focus moves on. For instance, ‘tools’ was hot a few years ago (templates, check-lists and so on) and now they are commonplace with the realisation that having the right tools is important, but of more importance is having the right skills in place to run the integration programme. An experienced manager will generally find their way through the plethora of tools and techniques to hand but an inexperienced one will struggle no matter what tools are provided. Similarly, everyone now seems to have grasped the need for a pre- and post- deal integration execution plan with clear deliverables or events such as Day-1, first 30 days etc. And yes, there were accompanying communication plans, a recognition for the need to managed change too.
So why the continued struggle to succeed? From the content of some of the papers you wouldn’t think there was much of a problem. I guess part of this is the nature of the conference circuit itself; perhaps the presenters are self-selecting and having ‘seen the light’, naturally want to come and tell others how they overcame their particular issues. In this respect the informal discussion proved itself once again to be of equal, if not more, value than the presentations themselves – in achieving their integration success, each presenter was able to convey their particular obstacles or issues that was relevant to their own cases – badly managed cultural change, poor post-execution planning, lack of resources, inability to learn or improve over time were all cited informally and were widely recognised – many nodding heads in sympathetic recognition whilst each speaker laid bare their particular story. We’ve all been there and the chance to learn from others was the important point.
A successful innovation introduced this year was a round-table discussion based on several topics; designing the right operating model, successful cultural integration, key failure points and the retention of integration talent within an organisation. I can’t summarise it all here but the feedback from this part of the two-days, and indeed the event itself, was overwhelmingly positive – a real opportunity for non-presenters to have their say and to dive that little bit deeper into their chosen topics.
So what was new for me? Two things really; the first being the recognition that whilst all integrations are the same, each one is different. This means that in general, there are no hard-and-fast rules on how to ‘do’ integration and each one has to be examined on its own. On the other hand, there are some key pointers or guides when undertaking the integration ‘journey’. The key for me this year is to concentrate on value – how is the value of the deal recognised (measured) and how is that value being preserved or enhanced? If this is lost in the translation between intent (strategy) and execution then the project is in immediate danger. For our part, this is why we emphasise the construction of ‘Value Trees’ early on during pre-deal planning and analysis – only having defined and deconstructed the value of the deal into measurable activities and deliverables, can a business begin to think about the integration plan and operating model (‘to be’ organisation) to deliver it.
The second new element was the recognition that pre-defined integration plans only work where there is a well-defined – and stable – acquirer operating model such that the target is simply being integrated, to varying degrees, into this model. I see this most often in the major players (think IBM, Microsoft, GE) but can equally be used in mid-size businesses too – so long as they are confident of their own operating model and avoid the common pitfalls of ‘integration creep’ and so on. This goes back to the acquisition rationale itself – what was the original purpose of the deal (e.g. capture technology, market share, improved processes etc.) and how does that align with our current organisation. I’m coming to the conclusion that a simple market/capability/service adjacency model works well here and I’ll be writing more of this in future blogs and I’ve tried it several times to good effect.
So overall a great two days and good to see record numbers attending. Is M&A back? I think it is but perhaps in a much more measured and (rightly) cautious way with speakers & attendees being much more modest, even humble, and willing to openly listen and engage in debate; long may it continue!