5 Keys to Integration Success

Best practices across 5 key dimensions of managing a successful integration

By Scott Whitaker, US Partner at Global PMI Partners

While every deal is different, sometimes just doing the basics right can mean the difference between tangible success, or an unsatisfactory result. This article is not meant to address everything that must get done in an average integration, but instead focuses on 5 key dimensions that are consistent across integrations regardless of size, sector or complexity.

The 5 most common dimensions are:

1. Strategy & objectives
2. Program Management
3. Day 1 and First 100 Day Planning
4. Communications, Culture & Change
5. Post-close Execution

For each dimension, we have outlined a few best practices, and associated common pitfalls. Addressing the 5 areas outlined below will put companies on the path for a successful integration. 

Strategy & Objectives

While most executives we work with do a good job at defining the overall deal thesis, translating that into tangible direction for the integration teams can sometimes hang up even the most experienced acquirers. 

Early on (as in ideally pre-close), you have to define that “north star” at the program and functional level to ensure downstream initiatives deliver the value you need to deliver the deal thesis.  

Best practices: 

• Value drivers and objectives defined and agreed upon at Steerco level
• Specific integration objectives defined at functional level
• Measurable success metrics and integration KPIs defined and can be monitored/tracked   

Common Pitfalls:

• Strategy and objectives defined “as we go”
• Unresolved direction for strategic workstreams (e.g. Target operating model, go-to-market, product roadmap, synergy targets)
• Inability to measure success metrics & KPIs

Integration Program Management

Companies should not underestimate the level of effort for full people, process & technology integration, and the rigor required around program management that is necessary to plan and execute integrations. Establishing a rigorous and disciplined integration management process, even for smaller add-ons or modest transactions, will help IMO (Integration Management Office) participants use their time efficiently and effectively.

Best practices: 

• Formal governance framework with defined roles & responsibilities
• Defined methodology, tools, templates & technology platforms, and status reporting enablement
• Defined program milestones, workplans, and weekly process

Common Pitfalls:

• Informal governance
• Limited and disorganized target involvement in process
• Inconsistent and/or ad hoc IMO process

Day 1 and First 100 Day Planning

We believe a successful Day 1 and first 100 days will ensure a successful integration overall, so starting early and prioritizing activities is one of the most critical pre-close planning activities. Also, rigorous planning here helps inject a “bias for urgency” into the integration in the early days, which helps keep  sustain momentum throughout the integration period.

Best practices: 

• Day 1 mandatories identified at functional level 
• First 100-day functional integration initiatives prioritized and detailed in functional workplans
• Tracking in place to ensure completion and issue mgmt.

Common Pitfalls:

• Starting detailed Day 1-100 planning too late
• Lack of prioritization or tracking at program and functional level
• Lack of urgency overall

Communications, Culture & Change Management

This is probably the home of the most easily avoidable and unforced errors across most integrations. Poor attention to communication requirements across employees, customers and other stakeholders puts leaders in reactive vs. proactive mode. Also, failure to understand and take action around culture and change requirements will slow progress and delay and/or erode value realization. 

Best practices: 

• Materials prepared for sign, announce, & close across all stakeholder audiences
• Assessment of culture and change management requirements completed by Day 30
• Consistent post-close communications to maintain stakeholder engagement

Common Pitfalls:

• Assigning already busy marketing or investor relations people to manage integration communication programs 
• Dismissive approach to cultural integration obstacles and/or change management needs
• No formal communications after Day 1

Post-Close Execution

It is essential to keep the integration cadence and “weekly rhythm” in place until the majority of integration initiatives are complete. The goal should be to not lose any momentum, but to use a completion target as a goal and “carrot” to transition to business as usual. 

Best practices: 

• IMO process in place until 80% of initiatives complete
• Plan optimization to finalize plan of record (POR)
• Orderly transition to business as usual (BAU)

Common Pitfalls:

• No plan optimization to ensure final POR delivers value drivers & objectives
• No tracking to determine % complete
• IMO process disintegrates post-close

The 5 dimensions outlined in this article are common denominators, and the key is to understand early on what will ensure integration success for your integration, and build that discipline into your planning & execution approach.

Scott Whitaker (scott.whitaker@gpmip.com) is a partner at Global PMI Partners, an M&A integration consulting firm. He is the author of Cross-Border Mergers and Acquisitions (2016) and Mergers & Acquisitions Integration Handbook, (2012).