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  • Per-Olov Lindgren

The M&A deal is not complete until you have succeeded with Integration

“My dear team, where is the Integration Plan in detail? The deal seems ok, but you do not think that I will sign the agreement during the share transfer if that plan is not ready!” This is what the CEO said when we tried to get the mandate to finalize the agreement. His clear words were based on long experience and a very correct opinion. Studies that have been done on why so many M&A deals fail show that Integration plays a crucial role in this. The integration is also described as the most important and challenging phase in the projects. At the same time as Integration can go wrong, it can also be the important part that makes the acquisition successful and reaches the set expectations. In this article, Strandgården describes what you should think about so that Integration does not overturn the entire acquisition but contributes to a successful project.

Guidelines for Integration

1. A well-thought-out Integration Strategy The entire M&A project must have a strategy that includes the end result of the acquisition, that vision must also be a key element in the integration project. The Integration Strategy therefore describes expected results, a master plan with measurable sub-goals and end goals as well as a set vision for the business. The clarity of the strategy therefore means that there is no doubt about what it leads to and how the tactical implementation should be broken down into sub-steps to achieve the end result.

2. Management model Managing and leading the process of integrating the target company requires that there is a project model and organization with a mandate. The Leader must be able to make decisions quickly within both the Integration Team and the target company, only in exceptional cases should the Leader's mandate be limited. The ultimate goal and other aspects of the overall strategy must be so descriptive that it guides the leader in decisions and priorities. There must be a person responsible for various parts, such as realizing the synergies and the schedule for these.

3. Schedule and intermediate goals

The overall strategy also describes the overall timetable. The tactical implementation plan measures the achieved results for intermediate goals and the fulfillment of the final goal. The outcome is reported regularly against the pre-set target values, including time, data points and organizational goals.

4. Metod för Change

Since Integration means change for both buyers and the target company, a verified method for Change must be applied. For purely technical changes, its handled somewhat separately and not in this text. For changes in organization and processes, a method is applied that meets the challenge that it is people who to varying degrees have to change their way of working. There are several different suitable methods for a change project, such as Prosci ADKAR® Model, which on the personnel side consists of the following 5 sequential steps:

  • Insight. The people must have an insight that the change must be made. Especially for the target company's staff, the realization that a change of ownership must take place is crucial for the motivation to contribute to the change that takes place in the integration.

  • Will. The people must see "whats in it for me" through incentives of various types such as own development, economic factors and more. All change that pertains to organizations presupposes that the individual participates and contributes positively, those individuals who do not see the benefits risk counteracting the change.

  • Knowledge. People need to understand how the new way of working should work for many areas such as sales, production, delivery, control, reporting and management.

It is not enough here to communicate goals, here training and workshops are needed to teach processes etc. in detail. An essential part of this phase is knowledge of which gaps and additional services / products at the customers will be reached with the new offer put together by the buyer and target company.

  • Ability, competence transfer between expertise in both organizations is part of creating the ability. Knowledge of customers' preferences and buying behaviors, how both products / services complement or overlap is transferred between the people in work meetings and workshops. Joint forums are created for sales, quotes and business priorities as well as forums for production and delivery are set up and staffed with people from both. Virtual teams for innovations and business product development are created very early in the Integration process, these teams are based on customers, for example from commercial due diligence, NPS or customer interviews.

  • Continuity, measurement and reporting on how different goals and Incentive are achieved is a control parameter in the Integration process. As the project reaches goals, the next level of vision and goals need to be set and become part of the development. An agile and transparent approach is needed when it becomes apparent that the first vision or goals turn out to be wrong or too low.

5. Realize the synergies quickly

Ensure that people responsible for synergy in the Integration Project quickly realize synergies on both the cost and revenue side. When this happens at the beginning of the Integration, you secure the benefits and create time and focus on other parts. The experience of leaving the target company for, say, 6-12 months, and then embarking on the integration, shows that there is more often more resistance to the change than implementing the clearest synergies as soon as possible.

6. Secure key individuals

In an integration that refers to work processes and organization, success is due to the individuals being positive and contributing to the change. It is absolutely gross that each individual must want to implement the change themselves to achieve the best results, the positive ones form a core team that supports the process. The individuals who do not want to change will influence in the opposite way. Reaching and ensuring that the people who are key people want and are positive thus becomes a success factor for the entire integration. A special plan that addresses these as individuals should therefore be developed and implemented.

7. Systems and organizational support are ready in time

Prepare and ensure that the organization and system support that can be completed is ready when the integration begins. Do not allow the establishment of system support to slow down the Integration project, when it is obvious which solutions are needed, these can be started already at signing and be clearly close to access.

8. Information / communication

Communication to Internal and to customers is an important part of the Integration project, which must have goals for both time and content quality. Quality is intended to ensure that relevant information is leaked and that it reaches the entire own organization, customers and partners. An Information Officer must be part of the project and have channels for disseminating the information.

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