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.

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 experimentation.

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