This is part 4 of a series of four discussions on the intensity associated with acquisition integrations: M&A Integrations are Complex, Political, Emotional and Very Busy.
M&A integrations require the merging of people, technologies, operations, processes and cultures of the acquiring and acquired businesses, while sustaining the Business As Usual (BAU). The workload is assigned as tasks to employees and exerts pressures imposed higher than normal. A small integration may include 200 to 1000 tasks/projects.
During the confidential planning phase a cross-section of managers from each department, area or vertical should be assigned to create projects and identify the tasks that will need to be completed. The sheer number of tasks to be completed and the commonplace deadline of approximately 100 days to finish a significant swath of the tasks, may be overwhelming for employees who have only just heard the acquisition announcement.
How can there be so many tasks?
Let’s consider a small business integration. It may include as few as 6 workstreams, say Finance, IT, HR, Sales, R&D, Marketing, etc.
Each of these may have 8 to 12 areas to address, for example Finance may have: Accounts Payable, Accounts Receivable, forecasting, financial statement, financial software applications, tax, compliance, external audit, internal audit, procurement, contracts, price book and cost centers.
Each area may have 3 to 5 tasks, which can easily exceed 50 tasks/projects for this one workstream.
How do you prioritize?
What is at the top of the priority list?
When a business is acquired, there are legal requirements that must be adhered to, for example compliance in an industry, bank account control, or interim health and safety policy (until a unified policy is adopted). These are often tackled on Day 1, or as soon as possible after a transaction is completed. These cannot wait.
We also prioritize tasks that are critical to the business, for example payroll, invoicing and client relations.
What do I need (depend upon) for a task to be started?
We have talked about dependencies earlier in this series. It is worth re-stating that an integration is re-organizing every department in a business at the same time. Every employee is going through some level of chaos. A team’s tasks are often dependent upon another team delivering something.
It might be important to complete a project, for example creating an updated list of products that the Sales team can now sell. However, this project may depend upon new product training, revised marketing material, revised bulk discounting policy, eCommerce setup etc.
The volume of tasks alone does not determine the timeline; instead, it is driven largely by interdependencies between activities. On paper, integration can appear to be a straightforward list of tasks supported by a flowchart. However, once the deal is announced, the reality emerges: human factors, cultural alignment, and resource constraints quickly come into play.
We begin with the assumption that everyone is aligned around shared goals and approaches their work collaboratively. Over time, however, competing priorities, personal concerns, and the uncertainty that accompanies transition can disrupt that alignment. This is further complicated by the need for timely, frequent, and transparent communication, as well as a disciplined cadence of progress reviews. As a result, integration rarely follows a linear path from point A to point B.
The success of M&A integrations is far from guaranteed. In fact, it is widely documented that at least 70% of deals fail to fully realize the value envisioned in the original investment thesis. At Intista, we recognize that integration challenges are often the root cause of acquisitions earning a poor reputation, and we bring the experience and expertise needed to navigate the complexities and deliver successful outcomes.
If you need guidance regarding how to develop, organize and prioritize your integration task-lists, please contact us.