Effective Management Of Change During Merger And Acquisition

Best Practices In Merger Integration


By Catherine Dixon – The Intersect Group



Best Practices Summary

  • Establish Strategic Framework for Decision Making
  • Dedicate Integration Resources
  • Frequently Assess Cultural Progress
  • Communicate Early and Often


— Spell out “Non-Negotiables” as early as Possible

— Jointly formulate a 100 Day Integration Plan

— Communicate to all Employees, Customers, Suppliers



• Measure Performance Versus Proforma

• Focus on Priorities



— Objectively and Systematically identify the highest priority Synergies

— Those with Highest Value + Probability of Success



Move Quickly – everyone is expecting changes



Key Steps in Acquisition Integration


Align Strategy


  • Understand Acquiror, Target and Deal Synergies
  • Define Success
  • Confirm Leadership Commitment


Identify Culture


  • Assess Cultural Differences
  • Identify “Keeps” and “Gives” for Both Organizations


Dedicate Resources


  • Create A+ Teams to Lead Integration Initiatives
  • Agree Roles & Responsibilities; Tie to Strategy
  • Measure Team Performance and Task Completion


Initiatives/Action Plans


  • Define and Prioritize Initiatives
  • Develop Detailed Action Plans for Achieving Synergies




  • Define Desired End State
  • Set Metrics and Monitor Team Progress
  • Transition to Operations


Manage Information




Aligning Strategy and People

Figure 1: Timeline


The Wrong Way

Figure 2: The Wrong Way


The Right Way

Figure 3: The Right Way


Dedicating Resources

Figure 4: Dedicating Resources


Cultural Considerations

• Cultural integration…


— Spans all functional areas

— Is not an event; it is an interactive, complex process

— Takes a long time



• Commitment is critical to success

— 80% of integration problems relate to cultural issues



• Teamwork is important throughout


• When in doubt, err towards over-communicating




Ways to Reinforce and Create Culture


1. Rules and Policies

2. Goals and Measures

3. Rewards and Recognition

4. Staffing and Selection

5. Training and Development

6. Events

7. Leadership Behavior

8. Communications

9. Physical Environment

10. Organizational




• Focus on formulating and telling the story

— Consistency and frequency of communication is key


• Target personnel have often been disappointed by previous buyers


• Introduction should start broad then narrow to functional information


• Understand the impact of integration on the business – burnout is often an issue



Initiatives and Execution

Figure 5: Initiatives and Execution


Definitive Agreement



• Earnout structure and measurement


— Revenue and gross margin versus EBITDA

— Months, not years


• Post-closing tax matters



Transition Services


• Encourage and incentivize rapid decoupling of systems


• Penalties for delays



Employment Agreements



• Incentives – sales, stock-related compensation, bonuses


• Address potential for departure, role shift


• Signed by close of deal



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