Lessons Learned in Post Merger Integration
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In order to institutionalize such important aspect, & to retain the corporate memory, we as an M&A department are collaborating with the Center of Excellence in Aramco Corporate Development Organization in order to capture the lessons learned from the previous transactions. Those information are feeding the M&A toolkit that is currently being developed to facilitate & deliver multiple aspect, one of which is this crucial element.
Especially for financial sponsors embarking on ‘roll-up’ strategies, we saw that there is in fact a ‘programmatic’ approach to doing successful value-accretive M&As. The acquirer would need to assemble an experienced and dedicated M&A / PMI team that have a deep understanding of (1) type of company to acquire that delivers strategic and financial value, (2) likelihood of achieving the desired synergies from the acquisition, (3) potential risks and worse case scenario that could happen from making the acquisition, (4) have a strong ability to unlock value and realize synergies from the acquisition. With an experienced and consistent M&A / PMI team in place, the approach to M&A can be institutionalized and applied across future acquisitions.
Having a repeatable “Lessons Learned” process in place can certainly support further refinement of your “Best Practices” for M & A. We review key findings from the Lessons Learned to determine the best place to incorporate feedback. As we strive to continuously improve the overall process and depending on the feedback/suggestions provided, we may incorporate it into our M & A playbook(s) and/or Due Diligence or Integration planning/Execution process. For example, we may add it to the Integration Planning Framework or update templates and/or checklists that are used in various phases of the acquisition integration or due diligence.
We are consistently in touch with our leadership to ensure projects are on track as well as closing within the confines of our budget and timeline. This iterative process forces accountability on our project teams and forces us to think about what changes we’d make in the future if given the same situation. Informally, I have my own personal notepad with lessons learned that I’m updating weekly/monthly. This keeps me sharp when connecting with leadership on how we should correct course.
Little mistakes create large issues and thus, small tasks are very important to manage appropriately to mitigate risk.
Building institutional knowledge and expertise can take a multi-pronged approach. At my company, we are building an enterprise capability with post-merger integration expertise on the people/process/technology needs of small, medium, and large deals. These will be enduring resources that will be support all deals, whether directly or indirectly. They will refine the playbooks and execution plans based on other enterprise deals. Functional playbooks and operating procedures will be retained by the functions themselves, and will see continuous refinement as the number of deals and experience increases.
We take lessons learned and build new projects, tasks, communications, etc to solve or enhance the lesson. We held extensive post merger sessions with impacted teams to walk through how the merger impacted them, what was good or bad, and what would they like to see next time. We used those to add to our existing merger playbooks for the next merger. If it was a major issue that needs solving, we worked with our Project Management to have a business case created and vetted to have resources allocated to work on the lesson learned before we have another merger announced.
Lessons learned in prior integrations can be captured and used to improve future integrations by following these steps:
1. Identify and document lessons learned: Throughout the integration process, identify both positive and negative experiences and document them in the lessons learned report or template. This helps to create a knowledge base for future reference.
2. Hold review meetings: Conduct meetings with team members to discuss and analyze the lessons learned, allowing for open communication and feedback. This enables the team to understand what worked well and what needs improvement.
3. Store and organize lessons learned: Create a centralized repository for storing and organizing the documented lessons, making it easily accessible for future projects. This ensures that the knowledge is not lost and can be utilized in future integrations.
4. Apply lessons learned to future projects: When planning and executing new integrations, refer to the lessons learned repository and apply the relevant insights to improve the process. This helps to avoid repeating past mistakes and to build upon successful strategies.
5. Continuously update the repository: As new projects are completed, update the lessons learned repository with new insights, ensuring that it remains a valuable resource for future integrations.We view PMI lessons as a way of refining our process and learning. When lessons are learned, we always circle back, look at what was good, and what needs improvement. By documenting these lessons and refining our process, it helps imbed to mitigate any issues down the road.
All the lessons learned are clearly shared with all key stake holders and with the related top management at the closing meeting of each M&A projects. The M&A project management team takes advantage of the info for other pipelines.
Have a proven template method for approaching lessons learned feedback consistently. I would advise formatting the feedback into a dashboard for reflection and future analysis, so that clear themes and benchmarks can be established.
Capturing lessons learned from prior integrations is an essential aspect of continuous improvement in the M&A process. Learning from past experiences helps organizations refine their strategies and enhance future integration efforts. Here’s how lessons learned are typically captured and utilized to improve on future integrations:
Post-Integration Review:
After each integration, a comprehensive review is conducted to evaluate what went well and what could have been handled better. This review involves key stakeholders from various departments, including IT, finance, legal, and operations. The goal is to identify successes, challenges, and areas for improvement.
Documentation of Insights:
Lessons learned, along with specific insights and recommendations, are documented in a formal report. This report serves as a valuable knowledge base for future integration teams. It includes details about the integration process, challenges faced, solutions implemented, and outcomes achieved.
Regular Team Debriefings:
Integration teams often hold debriefing sessions immediately after the completion of a project. These sessions provide a platform for team members to share their observations, experiences, and suggestions for improvement. Open and honest communication is key to capturing valuable insights.
Creating a Lessons Learned Repository:
Organizations may maintain a centralized repository or database where lessons learned from past integrations are stored. This repository can be accessed by integration teams to review best practices, strategies, and potential pitfalls.
Incorporating Feedback into Playbooks:
Integration playbooks or guidelines are updated based on lessons learned. New insights and recommendations are integrated into these resources, providing future integration teams with a well-rounded understanding of what works and what doesn’t.Here is some of what we did.
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Lessons learned in prior integrations are captured and used to improve future integrations primarily through a structured process involving documentation, review meetings, organized storage, application in future projects, and continuous updates. This approach is particularly important for financial sponsors employing ‘roll-up’ strategies in M&A activities.
.- Identify and Document Lessons: During each integration, both successful and challenging aspects are identified and documented. This includes analyzing the type of company acquired, the synergies achieved, potential risks, and the team’s ability to realize value from the acquisition.
- Hold Review Meetings: After the integration, review meetings with the M&A/PMI team are conducted. These meetings focus on discussing and analyzing the documented lessons, fostering open communication and feedback, which is crucial for understanding effective strategies and areas needing improvement.
- Store and Organize Lessons: A centralized repository is established for storing these lessons, making them easily accessible for future reference. This ensures that the knowledge and insights gained are not lost and remain available for subsequent integrations.
- Apply Lessons to Future Projects: Future integration planning and execution involve referring back to this repository. By applying relevant lessons, teams can avoid repeating past mistakes and leverage strategies that have proven successful.
- Continuously Update the Repository / Playbook: As new integrations are completed, the repository is updated with fresh insights. This keeps the knowledge base current and increasingly valuable for future M&A activities.
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In essence, capturing and utilizing lessons from previous integrations forms an essential part of a programmatic approach to M&A, ensuring continuous improvement and success in future integration efforts. This process not only enhances the strategic and financial value of acquisitions but also ensures a more streamlined and effective integration process over time.
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