Leveraging Rapid Results
Post-merger rigor is achieved through 100-day rapid results projects: rapid-cycle, result-producing projects that implement
a work program directed at creating value. It is the central vehicle for driving organizational, cultural, and performance
change. Most of all, it results in increased ROI.
Depending on the size and complexity of the merger, several cycles of 100-day projects may be required to complete the post-merger
integration period. Think of post-merger integration as a portfolio of longer-term horizontal activities and shorter-term
vertical 100-day projects that drive immediate value—and provide learning.
For instance, when Big Pharma acquires small biotechs they need to leverage their strengths. Big Pharma is very marketing-oriented,
while biotechs are more R&D-oriented. Big Pharma needs to set 100-day projects that retain the jewels in the pipeline and
increase the speed to market. For instance, they could set up a 100-day project with cross-functional teams comprised of pharmacology,
biostatistics, physiology, and even the commercial organization focused on speeding up clinical trials by 20 percent and ultimately
making tough decisions about the portfolio that best meets patients' needs.
As the integration plans are developed, the need for multiple cycles of 100-day projects can be easily assessed. Closing physical
facilities, renegotiating purchasing contracts to reduce costs, cross-selling products to new customers in both companies,
consolidating customer support, and restructuring research and development are all examples of integration objectives that
may demand more than one 100-day period to complete.
The greatest value of cycles of 100-day projects lies in using them as building blocks to achieve major integration goals
and to build capacity. This emphasizes one of the key premises of post-merger integration, which is creative and adaptive
The CEO, top management, and the integration teams need to be aligned around what must be accomplished post-close. However,
integrations rapidly change, are unstable, and create unpredictable events. Companies need to experiment with 100-day projects
that demonstrate the value of the combination. This also will allow employees to adapt to new ways of working.
Don't Declare Success Prematurely
Many CEOs assume that with such careful preintegration planning, they could predict the outcome of the merger prior to the
close, and all that was required afterward was for the business to follow the recipe. They considered the formal integration
period completed at the close of the deal, letting their integration teams disband. This fallacy created a pre-close process
that became a sort of bouillabaisse of everything in the cupboard, when all that is actually necessary to make it digestible
is a few simple ingredients.
First, ask these questions to gauge if the integration is on the right track:
» Are we achieving bottom-line results in the first 100 days? No excuses. Is the integration achieving value (both revenue
and cost), or are people merging functions for integration's sake and saying results will come later? Have our customers recognized
the positive impact?
» Do we have the right level of governance and clear mandates post-close? What organizational structure (steering committee,
integration manager, and integration teams) will remain and how will they report progress to the CEO? How will ongoing decisions
be made as the integration proceeds and synergies are being anticipated?
» What is the plan for assessing readiness for handing off the integration to the day-to-day business? Has the integration
delivered, for example, synergy targets, organizational restructuring, excess work out of the system, etc.? Is there a plan
for how the various activities will be coordinated with the businesses? Can the handoff be accomplished without interrupting
work or losing momentum?
Integration requires a significant amount of planning to be done prior to the close of the deal. It does not imply this planning
should be overly complex. While each integration should have a start date and a finish date, CEOs should determine when enough
value has been created to declare the post-integration period successfully completed.
Rick Heinick is a Senior Partner and head of the M&A practice at Schaffer Consulting. He can be reached at RHeinick@SchafferResults.com