Build your own integration capability

Build your own integration capability

Our 5-step plan for building your internal capability to successfully integrate major acquisitions

One of our main objectives in all of the work we do is to build the capability of the organizations we serve. Much of our work in acquisition integration is focused deliberately on capability building. We conclude this newsletter by offering our 5-step plan for building your internal capability to successfully integrate major acquisitions.

Schaffer Consulting has built a reputation in acquisition integration based on groundbreaking work over two decades. Along the way, we have shared our learning with the business community in a dozen or more articles on the topic (select “Post-Merger Integration” from the drop-down). As firms pursue strategies of growing through acquisition, they often wish to make post-merger integration (PMI) a corporate competency. Building this competency is one dimension of our consulting practice.

Five steps to developing a corporate PMI competence

  1. Agree on the principles of post-merger integration
  2. Create a disciplined process that is aligned with the principles
  3. Develop a standard set of tools and methodologies to enable the process
  4. Consciously develop a cadre of experienced PMI leaders
  5. Pilot the approach, learn from the experience, and refine the process as needed

Agree on the principles of post-merger integration. You can develop these principles based on your company culture and operating requirements, informed by a knowledge of best practices. These principles should cover your approach to collaborating during the integration, the way you will choose leaders from both companies to fill the new organization structure, the degree of transparency you have about decisions throughout the process, the pace of the integration, and the commitment to goals. A review of corporate policies in HR, finance, and IT will generate other principles that you may wish to embrace or modify.

Create a disciplined process. Many acquisitions get bogged down just when demonstrating tangible progress would boost morale and commitment of associates. A disciplined process focuses the organization on goals that are aligned with the deal’s strategic intent, engages associates in both companies in achieving these goals, and leverages a governance structure that controls for results and resolves issues quickly. Project Management Office (PMO) skills are helpful here, but if a PMO is part of the structure, it should be lean, and accountability for managing and reporting should rest squarely with the integration teams.

Develop a standard set of tools and methodologies. Many organizations have one or more methodologies for making improvements in the business. Sometimes these tools can be helpful time savers in managing the integration. Care should be taken, though, to avoid overly analytical frameworks and long cycle time methodologies where rapid achievement of known benefits is the desired critical path. Select a subset of tools and make them a standard that people can learn to use in planning, managing and reporting on the work of integration.

Consciously develop a cadre of PMI leaders. Beginning with the next acquisition, be conscious about the selection of leaders and integration team members for the effort. Typically, people begin by being a member of an integration team focused on delivering a specific goal within a specific time frame. People with this experience should be first in line to lead integration teams in the next acquisition. The best of these, particularly those with excellent sensitivity to cultural and people issues, and who have strong relationships throughout your own company, are candidates to be Integration Leaders in a future deal.

Pilot, learn, and refine. Everybody learns by doing. Employing the principles, processes, tools, and leaders you have developed will give you the opportunity to test the approach and learn from the experience. Each of the dimensions of your corporate competency should be modified as needed to make it more useful in your environment. Make sure there is a steward for your growing competency who can manage the different elements of your approach and train new members of the next PMI team.

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