Answers to Questions about M&A Integration Teams

Usually the structure is a 3-tiered hierarchy:

1. A Steering Committee
2. An Integration Management Office (IMO) led by an Integration Manager
3. A variety of additional teams organized by function (i.e. sales, human resources, finance, and information technology, etc.) and/or by business unit, product line, process, or geographic location.

The various integration teams take their marching orders from the IMO. The IMO is ultimately accountable to the Steering Committee.

The Steering Committee defines and communicates integration objectives and strategies, approves recommendations from planning teams, prioritizes initiatives, monitors progress, and makes decisions whenever an impasse is reached at the lower levels of the integration hierarchy. The Committee is usually comprised of C-level executives.

The Integration Management Office is the real workhorse responsible for driving the integration forward and keeping good project-management discipline in place. This team provides the guidance and day-to-day decisions that ensure the integration continually makes progress.

The role of Integration Manager in M&A calls for a versatile, multi-skilled person who possesses executive muscle and strong leadership ability. The Integration Manager must be able to take charge and bring order to an undefined, very fluid situation where a lot is at stake. These are the seven key attributes that an Integration Manager should have:

1. Project management skills
2. Power, authority, and executive credibility
3. Social intelligence
4. Tolerance for ambiguity and uncertainty
5. Sense of urgency
6. Strength of personality
7. High-energy level

1. Subject matter expert
2. Flexibility and the ability to improvise
3. Decisiveness
4. Strong interpersonal skills
5. A willingness, and ability, to take charge
6. A knack for keeping many balls in the air simultaneously
7. A keen sense of urgency
8. High tolerance for stress and pressure; psychological resilience

This depends on the size, complexity, extent of the integration, the timeline, the goals, and operating differences between the companies.  Given those factors, which can vary a lot from deal to deal, functional leads will usually need to spend 20% to 80% of their time on the integration to be effective.  

After the acquirer’s executive team agrees on key integration goals, strategy, priorities, and non-negotiables, the target company should be invited to participate in planning. Of course, if a deal is subject to regulatory approval and/or confidentiality constraints, the target’s involvement before close might have to be very limited.

• What key talents/strengths should members of the integration teams possess?
• What functions should be represented?
• Who should be involved in the selecting the team members?
• Will special compensation or bonuses be given to the integration team members?
• How long will each of the team members be assigned to the integration?
• Will this be a full-time commitment, or will they be required to also carry on their normal job responsibilities?
• What company knowledge and technical skills will be needed for the teams to be effective?
• By what date should team selection be completed?
• How frequently should the teams meet?
• Who should lead the Integration Management Office?
• What qualifications and skills, should this person possess?
• Will the teams have members from both companies?
   

Guiding principles are directional advice that help ensure teams act in alignment. They serve a basis for decision making during the integration.

• Follow a balanced, robust “due diligence” process that examines both financial and operational issues
• Start integration planning during due diligence
• Be ready to roll on Day One
• Translate M&A value drivers into metrics
• Involve HR and IT early in the process
• Communicate decisions about structure, layoffs, and integration objectives as soon as possible
• Provide frequent, candid and regular communications during all stages of the integration to all employees
• Use a defined integration method (processes, tools, and templates)
• Establish strong program management and governance
• Facilitate knowledge capture and cross-functional information sharing
• Document results and conduct a lessons learned debrief