In many cases, explaining the situation through some intelligent questioning is the most critical process…it leads to greater clarity about the issue, it often forces us to re-examine the situation more critically and dispassionately…

Whatever the strategy, the option of looking for purely organic growth no longer fits with the requirements of markets or shareholders... these days not having an acquisition pipeline is the equivalent of a B-…’could do better’.

Strategy and integration, the oil and vinegar of any deal……no matter how much you vigorously combine them, they eventually separate out again. It’s a nice analogy but why?

What if the cultural alignment we’re told to aim for is actually harmful to the performance of the organisation?
Rather than align cultures of the target and acquiring leadership teams, research suggests you should harness the conflict for better performance.

People with a little experience perform worse than those with a lot of experience, and those with no experience - a "bathtub" curve. Each deal is different and you can't generalise on the first one and try to implement the second the same way - reinforcing the idea that M&A is a skill that needs to be learned.

There is a general misconception that some M&A deals are people-based and others are asset-based. That’s not true…when it comes to post-deal, all M&A deal synergies result from people. Whilst this might sound like sensible advice for the post-deal delivery, it also goes right to the heart of the pre-deal strategy and valuation.

Evolution not revolution; more haste, less speed; Quality, Cost Time. The mantras around time are endless and reflect our obsession with what is essentially an entirely man-made concept.

In any transformation programme, time, far more than cost or quality (which is virtually impossible to get agreement on amongst stakeholders) becomes the driving force. It is the component that everyone has a comment on, based on personal experience, and it’s the main driver behind the linear delivery plans which occupy our lives.

The analogy of property sales to understand company mergers and acquisitions is both accurate and highlights a fundamental flaw in how we think about M&A deals...

If there’s one consistent message that we’ve heard over the last 15 years of doing post acquisition integration, it’s this: Big deals are more difficult to integrate than small ones.  

Let’s not let size and scale dominate our thinking and pre-determine our effort with regard to integration.

Once again we are on the crest of a wave of mergers and acquisitions whereby the very large swallow the very small.

I’m not at all confident that we won’t have the same result as the last time this happened…in the late 90s when the likes of Nokia and others attempted to buy innovation through a series of very small garage / basement based tech driven ventures.

It’s easy to see why Behavioural Economics has a ‘negative’ air about it… after all it describes the irrational, non-optimal reality of being human, the flaws in our decisions, memories and perceptions.  Economics, like life in general, is a lot easier when you can assume that everyone is acting rationally…

On a beautiful, frosty but calm day in early March 2017, I was striding down the 3rd on Gullane No 1…a magnificent golf course on the east coast of Scotland, just a short distance from Edinburgh. It’s a fabulous long par 5 which sweeps down overlooking the Firth of Forth with views over Fife and East Lothian…

How you integrate your function may be important to you (the drill), however how you add / retain value overall across the entire integrated organisation is much more important (the skill)…

The real value in M&A comes when these functions meet around a common goal which requires them to work together. That’s when you see real innovation and business driven change.

How to do you know if the M&A team you've built will be able to deliver the deal value in practice? Are they able to implement their skills in the uncertain environment of an M&A deal?

This is the first of a series of blogs based on the above mantra. I hope you enjoy it.

It’s an easy but not particularly insightful assumption to make, that those who develop the strategy for a deal might not be the best equipped to manage the integration process (I’ve written previously about the different skill sets required). What’s more interesting and useful to consider is that, even within the constraints of the integration process, the dynamics vary considerably. So when you’re selecting people for different tasks it’s worth considering whether their strengths lie in sprinting or marathon running…

It’s remarkable how the focus on cost savings has remained unchallenged for all the years that we’ve been doing post merger integration work. We suspect that the big 4 accountants are to blame, in discounting revenue synergy prognosis to cost synergies.

In what other walk of life can you imagine a situation where the thoughts, analysis and assumptions of one person (or perhaps a small team), drawn up before any access to the subject matter was granted and therefore based entirely on an ‘out to in’ perspective are entirely inviolate? 

The second in our series of Unchallenged Rules of Post Deal Integration. This week we look at function led integration which flows from function led due diligence and remains the standard approach. Time for a change?

Why, therefore, does the presumption continue that the acquired leadership team should be immune from an objective review / comparison in terms of their talent and experience with that of the acquired?

M&A delivery teams are separate from the teams that work on other business transformation or change projects in both consultancies and corporates…but are M&A integrations really different from other change projects? As an M&A consultant that always felt right to me, however the more deals I do, the more I question why it’s necessary…

All the big name consultancies have used an identical process for delivering mergers and acquisitions over the last 20 years, always sold on fear: “deals fail”, “focus on quick cost synergies”, “revenue synergies are difficult”, and “use our structured process”.  They’ve been at this for two decades and we have yet to see headlines that deals are now more successful as a result.  We are here to turn the industry on its head, challenge how everything is done and show that there is another way.

I’ve found that my most successful projects are the ones where a team of people comes together to create a ‘playbook’ or ‘blueprint’ for what they want to achieve.  That’s included integration playbooks, go-to-market strategies, revenue management practices, and even working capital reduction projects. The alignment that you’ve created around a shared vision and way-of-working is the true value. 

Occasionally, if you’ve been in the M&A world for a while, you’ll find a real gem of a business which an acquirer has stumbled upon and bought. It’s a moment of joy as the opportunities which the combined entity offers start to accumulate and you, as the integration director, begin to realise that the real potential is even greater. 

Practical application of System One/Two thinking, popularised by Daniel Kahneman, can be found across leading consumer businesses, at least in their marketing departments.  We’re yet to see it get widely used by Internal Comms teams in M&A.

You’ve read the articles saying most M&A deals aren’t successful, so you’ve put in place a project team to deal with the complexity of the task. Surely if an integration managed by this standard approach fails it’s a fair assumption that it failed because the methodology wasn’t adhered to rigorously enough.  All that is needed for success next time is increased control and planning…right?