November 10, 2020 at 4:55 pm #114604
I have been involved in many acquisitions and in every instance we have not succeeded in maintaining a customer centric approach. It seems the technical and cultural requirements of the integration exert such a strong pull on resources, that the customer integration tasks fall to the bottom of the list. I know this is dangerous and erodes value, but we have not been able to crack this problem. Any suggestions?November 12, 2020 at 3:06 pm #114641
It seems as though the customer centric approach would be a top priority in minimizing revenue risk. Strong leadership and clarity from the c-suite and Sales executive is a must. Silo’s in managing to checklist of “things to get done” must be tossed unless imbued with the pursuit of creating revenue value streams or reducing cost.November 15, 2020 at 7:22 pm #114701
In my opinion, a concentration of revenues should be taken into consideration. If the acquired company has a long list of customers and no major ones (revenues are very scatter), an importance of customer focus may be less during the integration. On the other hand, if there are major or strategic customers, an emphasis on customer centric approach so that the business value and revenues synergies can be realized should be made at the very beginning of the integration process to secure the necessary resources.November 17, 2020 at 8:42 am #114800
Pablo von SiebenthalParticipant
Very valid question and certainly a key risk in M&A. One of the measures could be to strongly incentivize the target and acquirer management team (in a corporate setup it would be the relevant country or regional management team) and, importantly, hold them accountable as the integration progresses. Also I find it crucial to plan ahead timing, content and details of communication to customers.December 23, 2020 at 12:05 pm #115894
Great points. From my experience loosing sight of existing business and clients can often be a significant area of deal value leakage. Our approach is to use the M&A as an opportunity to segment and analyse clients customers and markets as part of the synergy work. However, the risk is that execs often only focus on synergies in the top line that are new and only made available due to the deal and sometimes losing sight of existing core business and clients. Our approach to this is to include existing business and clients in any synergy modelling and planning to ensure the appropriate attention is maintained.
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