Is Your Integration Manager Helping You Destroy Deal Value?

Is Your Integration Manager Helping You Destroy Deal Value?

In clear weather, the pilot of a perfectly-functioning Embraer EMB-505 landed his light aircraft at excess speed with over 70% of the runway behind his touchdown point; the plane overran the runway and hit a number of parked cars, killing himself and his three passengers immediately*. While the pilot, plan and weather were all in good shape, the pilot wasn’t used to landing at a small but busy non-commercial airport where manual (non-instrument guided) landing procedures were required. Summarising the accident report, the investigation concluded that the combination of unfamiliar factors created a very high workload for the pilot and “may have saturated his mental capacity, impeding his ability to handle new information and adapt his mental model”, leading to his continuation of a highly unstable approach. Malcolm Gladwell take note: Rather than this tragedy taking place despite his 11,000 hours of flight experience, the accident was in many ways caused because of them.

Plan-continuation bias is increasingly recognised as a primary factor not only in safety incidents worldwide, but also in business more generally. The American Psychological Association describes it as ‘the tendency of people to continue with an original course of action that is no longer viable. Plan-continuation bias appears to be particularly strong toward the end of the activity and has been theorized to result from the interaction of such factors as cognitive load, task demands, and social influences’. How many times at that point of maximum programme pressure have we heard someone say, ‘I don’t care, we must stick to the plan’, ‘we just need to stay focused, keep our heads down, and press on and everything will turn out alright’. Not to be confused with ‘white line fever’ (or ‘just get it done’-itis), plan-continuation bias encourages people to focus on an inflexible route or journey to success, rather than an obsession with the end-goal itself (did someone just say ‘deal momentum’?).

In the post-close world, we regularly observe plan-continuation bias, especially in cases where experienced project managers (deeply experienced in, say, technology implementations) have been tasked with delivering with an integration programme in which (as is almost always the case) the objectives and context are different from ‘the last one’, ambiguity and uncertainty are rife, time is short, and new discoveries emerge and priorities change the landscape along the way. Plan-continuation bias can also be culturally-driven if integration is taking place in an organisation where course-changes are interpreted as career-limiting mistakes. Just as adopting a standard ‘checklist’ approach to integration can be incredibly dangerous, bringing an inflexible mindset to leading or sponsoring integration can lead to disaster.

Studies into plan-continuation bias can help your integration teams, managers and sponsors. Spot the signs and work hard to mitigate them:

Assess and test your organisation’s agility

One recent M&A executive told us of a major business initiative that almost killed the organisation, not because of too little support from the CEO, but from too much as he insisted on driving the plan to completion at huge cost and disruption even when it no longer suited business priorities. Are individuals who make mistakes or change plans in the business supported, tolerated or punished? If you see ‘safe’ opportunities to change something that clearly isn’t working or is no longer appropriate, try and change it and see what the organisational reaction is.

Use your integration playbook and checklists with caution, thought and active adjustment

The more detailed the ‘plan’ and the more invested the team is in the creation of that plan (either for this deal or past ones), the more likely they will interpret any deviation from the plan as a personal challenge. To be useful, M&A integration playbooks, guides and checklists must be treated as instructive and optional, not fixed and mandatory. Assess and test your organisation’s agility.

Appoint solid programme, not project managers to your integration

Perhaps counter-intuitively, those in your organisation with a reputation for their ability to consistently deliver change on-time and in-budget ‘come hell or high water’ may not be right for this particular job. Conversely, look instead for individuals who are comfortable with ambiguity and change, those who will work with and through others to deliver the end goals, even if those goals – or the best way to get there – change over time.

Understand the hard connections between the ‘whys’ and the ‘hows’ of your integration programme

If your actions (e.g. changes to your firms post-close operating model) are prioritised based on clear, objective and well-understood goals or conditions (e.g. your SMART acquisition objectives), then a change to those goals or conditions will make it easier to identify and justify any course corrections.

Give someone formal accountability to challenge conventional wisdom

Alongside your formal programme structure of workstream leads, PMO, communications group etc, appoint one individual – part or full time – to simply wander ‘without portfolio or agenda’ across the programme to ask awkward questions once in a while. Doing so in our experience has saved millions in post-close programme budgets and avoided several cliff edges.

Avoid emotional or time-pressured decision-making

Yes, easy to say, harder during integration! Nevertheless, nothing encourages plan-continuation bias like aggressive timescales and high-pressure team environments. Ask yourself and your teams:
– How much time is being allowed to review key deliverables or organisational changes?
– If those deliverables or changes are found to need further work, has time been allocated in advance to adjust them?
– Does your plan more generally have ‘process checkpoints’ and similar padding (contingency) to allow team members periodic breathing space to assess whether the right things are being done and change course if not?

As ever, integration programmes – and the businesses in which they occur – succeed when they can easily, regularly spot and adapt to changes in their environment or priorities. So in short, be less dinosaur; instead, think bacteria. After all, isn’t integration all about change?

* E55P, Blackbushe UK, 2015.