Post Merger Integration (PMI) Templates, Tools, & Plans


Post Merger Integration - The Key Ingredient of M&A Success


Your company may be involved in an M&A transaction right now. Or you may be called upon to assist clients in orchestrating strategic acquisitions. In either case, beware: the odds are stacked against the combining companies!

 

By all accounts, corporate mergers continue to disappoint in their failure to meet management's strategic and financial expectations. The question is why. Companies have steadily improved their approach to acquisition planning in recent years. They have learned from the scores of books, articles, conferences and seminars that provide ample best-practices guidance on making mergers work. What's more, many leading corporations have expertly systematized post merger integration planning and implementation, and have shared much of their knowledge with the global business community.

 


   
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Still, we continue to see large-scale merger mishaps ... despite the growing base of time-tested tutelage on the do's and don'ts of M&A planning.

 

Again the question: Why do mergers continue to fail to enhance shareholder value? The answer: Too often, there is a serious lack of leadership by CEOs and their senior executives during the post-merger integration process.

 

Weak leadership is a main contributor to failed corporate combinations. This is because many corporate executives simply don't realize what's required of them from a M&A and merger integration leadership standpoint. Following are five critical success factors that C-level executives must attain to lead their companies to M&A success. 

 

1. Quickly Establish the Company's Vision and Values - Any large corporate combination effectively creates a new organization. With any new company must come a new vision ... a picture of the desirable future that can or will be for the company's employees and stakeholders. Articulating that vision is the CEO's first leadership task. Underlying the new vision are new values. Values shape people's behaviors based on the ideals the company holds to be important. When employees embrace their firm's values, they embrace its goals. Workers gain a sense of ownership and commitment. Consequently, they're more loyal and show a desire to do their best every day. Their positivism spreads through the combined company, helping to spawn the broad employee buy-in so critical to attaining integration objectives.  

 

2. Foster and Ensure Information-Sharing - The post-merger integration process is inherently based on data transfer and knowledge-sharing. Unfortunately, integration is a time when communicative cooperation is often non-existent. New co-workers are naturally leery of each other. There are no bonds between them. There is certainly little or no trust. These factors hinder information flows. It is the CEO's job to break the communication logjam. The CEO must actively promote the benefits and necessity of information sharing. Breaking down barriers - and building bonds between the new co-workers - is one of the CEO's most crucial leadership challenges.

 

 

3. Be the Consummate Communicator - CEOs must get out and actively serve as the chief proponent of the integration initiative. Too often I see CEOs and the senior management team remain holed up in their offices without ever venturing out to meet their new employees! These executives feel that, just because internal memos and newsletter articles carry their by-line, they are adequately communicating with their new people. They're not. Written communications are essential, of course. But nothing replaces the power of face-to-face interaction.

 

4. Lead the Leaders - Leadership doesn't mean doing the job all alone. Contemporary organizations, with their flatter hierarchies and empowered workforces, require true leadership at every level. Cultivating and deploying multiple leaders is another urgent task of the CEO and his or her senior managers. Careful selection of one's leadership lieutenants is essential. Remember: the leadership skills required in a post-merger context are quite precise ... and somewhat different than those required in a typical organizational setting. Integration leaders must be adept at negotiating (there will invariably be disputes and friction between new co-workers). These leaders must be cool-headed and flexible (the high-intensity situations that characterize the integration process often require on-the-spot shifts in tactics). These leaders must be motivators (they will serve as influential spokespeople in helping to champion the merged firm's new strategic direction). It's the CEO's job to identify, train, empower and dispatch loyal, high-potential managers to help achieve integration objectives as swiftly as possible.

 

 

5. Actively Forge the Culture - This is the most important, overarching leadership role of the CEO. As stated, totally new organizations are formed in large-scale M&A transactions. When new organizations are formed, so too must their cultures. Initially, integration requires that dissimilar cultures be aligned. It is only over time that a new culture can be proactively developed. Each of the foregoing point underscores this critical success factor: everything the CEO does in supporting the integration process must be undertaken with an eye toward developing a new high-performance culture.

 

In Summary
The enormous challenges of M&A are well known. What is not as well documented are the specific M&A leadership skills corporate leaders must demonstrate. Clearly, every corporate combination is different. Thus, each one poses unique leadership challenges. The aforementioned leadership roles are the ones most central to achieving M&A success.

Invariably, the integration milieu is characterized by turbulence. It's the role of senior executives to be the leadership beacons that help the merged company navigate the choppy waters and reach its strategic destination.
 

 

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Post Merger  Integration (PMI) Templates

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Integration Initiatives For Each Functional Area - PMI01

Integration Functions Timeline - PMI02

Model to Plan & Execute the Integration - PMI03

Example of An Actual Integration Plan - PMI04

Second Example of An Actual Integration Plan - PMI04-2

HR Integration Plan Example - PMI05

Merger Integration Best Practices - PMI06

Integration Approach Kick Off Presentation - PMI07


 

 

 

 

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