M&A Integration Business Planning

13 July 2016

It is often reported that the principal reason for merger & acquisition deal failure is attributed to not paying proper attention to the integration process before, during and after a transaction. This is a common theme across all business sectors – and in a challenging and changing Energy industry, getting this right now is of utmost importance.

When two businesses come together, central to their success and combined potential is an effective and realistic Integration Business Plan. This begins from the very top of organisations where leaders need to develop and define a unified purpose, set of values and strategy that can be implemented from day one.

Planning & Preparation

What are the goals of the new combined entity? What is the timeframe for meeting these goals? Advanced, realistic planning and preparation prior to the period of transition will pay dividends once the process is underway. Seek early agreement on what the goals are during an agreed timeframe, but be cautious not to allow integration process and activities to take over the successful running of day-to-day operations. There must be a balanced management plan to address and mitigate conflicting demands, activities and processes.

Integration Stakeholder Groups & Communication

There will be multiple levels of stakeholder involvement. Identifying the appropriate stakeholder groups and developing a communications plan is an early priority. This will detail what messages need to be delivered to who and when. A good communications plan will include initial and regular communication often starting in the pre-integration transaction stage – and carrying through to all stages or milestones in the integration process.

Establish an Integration Team

As with any change management project, establishing an integration team to disseminate ownership of tasks, accountability and responsibility is crucial. A well balanced team with leaders from both organisations will avoid creating a “them-and-us” culture, and will promote credibility, visibility and consistency. Where there is an imbalance in leaders from either organisation, pair up an experienced leader with a step-up leader. This not only creates joint-ownership, but begins to develop key functional relationships and knowledge transfer.

Project & Workflow

What are the priorities and the timeframe for integration? Set these expectations from the outset by developing a robust but realistic project plan and workflow process. Define a schedule and clearly map out objectives, tasks, deliverables, accountability, milestones and dependencies. Appoint relevant team leaders for particular workflows and involve them from the outset to identify quick wins and create champions.

Immediate Key Considerations

A robust plan will deliver integration objectives, but what are the key considerations that need to be addressed from the outset? These are often people based and may include awareness and definition of cultural differences. Addressing this early allows it to link back to the shared values recognised from the outset. How will the new organisational design look and how much change is required? The communications plan along with a system for two-way dialogue needs to be comprehensive enough to handle this whilst providing answers and understanding to major concerns, objectives, purpose, values, vision and strategy.

For more information on integration business planning contact Alasdair Green, Head of Management Consulting, alasdair.green@aab.uk

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