A&E Mergers Best Practices: Driving Joint Success
The documents are signed, ownership has shifted…the challenge of joint success just got real.
After ownership shifts the success of the joint entity becomes the mission. It is incumbent on both firms to quickly stabilize and start to grow in the new normal of joint operations regardless of how smooth or rocky the negotiation, due diligence, and closure process was.
Plan → Communicate → Execute → Refine
What is the game plan?
Planning a program to address overall success vs just systems consolidation makes all the difference. It is way too easy to just dive right in to a straight data conversion project to get to one system. With this approach, one of the two entities will end up suffering major gaps in understanding and possibly even capabilities. It is better to first focus on a plan for the alignment of the corporate structure, processes and people; then let the system integration tasks follow that lead.
In my next post, I dive deeper into Systems Integration Planning.
Talk to me
Every good integration plan must include a solid communication plan, including an outline of who will participate, when and how. Your people have to be on board for organization to reach its full joint potential.
Ensure there is clear ownership of the communication plan for each company. Plans should address:
What will happen when
Communications should start with a summary notification to all people affected at all levels. Craft a unified message of what the objectives, major milestones, and general timeline are expected to be. Let your people know when they will start to feel their daily life, processes, and systems change.
Participation of each entity and key roles
Follow up with more targeted and strategically timed messages from various group leaders to specific audiences addressing concerns or anticipated questions relevant to that group.
Internal marketing for a positive change
As the integration project progresses, these messages may evolve. Because of this, each message should set the expectation that adjustments of timing, content, and decisions may occur throughout the process. The changes should be equally communicated, demonstrating management’s ability to adjust as progress is made. Don’t fall in to the trap of driving to a goal that is no longer appropriate based on new information.
Be sure to brand the initiative and leverage many forms of communication beyond email to align with what is typical and effective in your firm. It is about getting the word out with no surprises. During a merger your people will naturally question how the changes affect their role. Be open to reduce anxiety in the organization.
What is it that you do here?
As previously mentioned, the systems consolidation should follow the lead of a process integration or at least follow a detailed analysis of overlaps and gaps in how the separate entities were run. In the process analysis be sure to:
Identify overlaps and gaps early
Identify adjustments by role and process
Clearly define what the recommended process is going forward in the joint environment on both sides
Identify how the systems integration project needs to enable the intended new process in the near and long term
To build an integration plan that joins not only systems but also process, the fulcrum should be a business process catalog. This can be leveraged when identifying the general approach to each process area for each entity that will be integrated. Focus on elements of the process that are most likely to be disconnected. You must define:
What roles are involved and the level of detail that is managed at each level?
Is the process manual/paper based vs. automated workflow or even an email based process?
Who has what access to data and decision making authority to execute the process efficiently?
Is there a material difference in volume or other factor in one entity driving the process differences that cannot be adjusted?
Leaving disconnects unsolved or dictating process will just result in the process unraveling in the future. Everyone involved needs to believe that the new way is the right way for joint business success at some level or it really won’t amount to much other than a shelf full of optimistic unused documents.
There can be only one.
Often there is a need to integrate the systems and data of the two entities on an accelerated schedule for joint reporting. This is commonly a contingency of the deal or an investor’s way to see progress on the efficiencies that are expected as the business costs are consolidated. One tactic that should be considered to take time pressure off of the implementation is to create a bridge reporting pack.
Find ways to commingle the separate systems’ reporting data manually or via similar outputs from each system that can be summarized and collated outside the system on a temporary basis. This allows the proper amount of time that you need to follow good process when consolidating processes, roles, data, and systems in thoughtful steps.
You are never really done.
After go-live on your joint system with commingled data, the focus should shift to finding the inevitable data issues in the details of individual project, billings, or other records. Plan to have some project core team members transition into a temporary support group accessible to the new users. Resist the urge to add more functionality and customizations or to kick off a phase two of implementation for at least a few months. This allows for operational stabilization. Be sure to reserve some ad hoc time from your software vendor’s consulting or technical staff to be available on-call or even on-site to address any technical business interruptions quickly. Leverage the experience of your vendor at this time; they do this for a living. Understand your cost of down time and recovery plan should larger issues surface in the weeks following your go-live date. And finally, continue to ensure daily tasks are done prior to starting a second phase of implementation.
Do you have an industry standardization M&A success story? Let us know in a comment below.