Integration is for Closers: Harbor View Advisors M&A Integration Playbook Series (Part I)

Corporate Development

March 2019 — By Tyler Lamer

M&A can be a valuable option for companies to find their place within their industry and to hit their goals of becoming more productive and more profitable. However, time and time again, we see companies fall short in their abilities to plan and execute successful integration. In turn, time is wasted, opportunities are left on the table and disruptions in the business become inevitable.

Integration is always a challenge and no two integrations will be the same, which is why the approach requires experience, vision and careful, yet swift execution to be successful.

This three-part series will outline the key components for a successful integration.

  • Part I: Getting started
  • Part II: Defining the strategy
  • Part III: Implementation and beyond

Part I: Getting the Integration Started

First, let’s start with the types of integrations. Identifying which category the transactions falls into is the first step in developing your integration plan. No type is easier than the other – they all differ in scope and will require a customized strategy.

Types of Integration

Types of Integration

When should you consider not integrating?

Seriously consider not fully integrating the target when:

  • Projected integration costs are significant
  • The internal cultures will not align well
  • The sales force is distinctive, and disruption would put existing clients at risk

Even if it is decided not to integrate, you will want to be sure that the target is brought into alignment with your company when the target’s internal standards on regulatory matters fail to meet your own.

Building the Execution Team:

Next, let’s focus on who is actually going to get this done. Building the team is the most essential part of the entire integration. No matter how solid the plan may be, it will fail without the right people to execute.

  1. Appoint an overall leader with responsibility to the full integration
    • Align the leader and the C-suite
    • Align the leader with both the deal team and the execution team
  2. Select leaders from each functional and relevant area to be represented
    • Ensure that they have adequate resources
    • Team members should be flexible and adaptable
  3. Incentivize the team appropriately
    • Team members will agree to this role because they are hungry for success, both individually and for the company
    • Incentivize these employees with professional development and/or compensation

Involve key people early so that they have insight across groups and a sense of ownership of synergy targets. It will ultimately be up to these leaders to manage the integration and to help the company realize the deal value and bring the vision of the combined entities to life. They must ensure that everyone understands their role, their level of authority and how exactly they will be held accountable for their duties.

In part II to be released next month, we will look closely at defining the overall integration strategy, so the vision and timelines are clear. While it may not be possible to fully eliminate uncertainty, a disciplined approach to integration will create a framework that can withstand the occasional pitfall.

To learn more about Harbor View’s CATALYST for Corporate Development Solution, click here.