04/22/2020

BY SUSANNE TURNBO | MANAGING DIRECTOR

As the stock market crashed in March, for some so did the chances of that big M&A deal.

Leaders everywhere have shifted focus to confront this extraordinary global pandemic. And, as humans, we are reminded of our vulnerability.

Unlike some impacts to the economy, the effect on M&A can prove to be a short-term condition. Yes, there are logistical challenges to initiating new deals. Some of the deals that were worth pursuing aren’t worth it anymore. But, in this changing coronavirus economy, vulnerable industries and opportunistic buyers could drive new activity.

You may wonder now, more than ever, what it’s like to be the subject of one of these deals.  The answer is, it depends.  The post M&A integration strategy will drive the level of change – is it a hostile takeover, a true merger, or an amicable acquisition?

Sometimes not much will change for employees and consumers. Brands will stay separate, along with branches, stores, employees, systems, and whatever else applies. The integration is behind the scenes.

Other times, the change is drastic with plant and office closures, layoffs, and brand consolidation—it’s somewhere in the middle of these two outcomes where we usually find ourselves.

In this changing coronavirus economy, vulnerable industries and opportunistic buyers could drive new activity...the post M&A integration strategy will drive the level of change.

If you are responsible for driving M&A related integration efforts, start by getting aligned on the integration strategy, approach, and plan—then document everything.

As you begin planning, ask these 5 questions to help you avoid problems later:

What commitments have been made to the marketplace?

For example, is there a cost savings target or integration required by a certain date? Make note of this because, in the end, the initiatives to support these commitments will become the most tracked and most important outcomes of the early integration activities.

What plans have been made for an Integration Management Office (IMO)?

Acting much like a Project Management Office (PMO), an IMO is set up to focus exclusively on the integration work and act as a hub for centralized planning and communication. This is especially relevant in the early stages when legal stipulations allow only certain people to talk to each other from the respective companies.

What is absolutely required on Day 1, versus nice to have one or six months later?

Day 1 refers to the first day after the deal is finalized. Think of it as the closing when you buy a house. Efforts such as email domain migrations and application access provisioning are often more complex than originally thought – and time consuming for IT teams. Don’t over-commit so critical resources can focus on making the important things go right in the first days of integration. Stability will encourage a sense of calm.

What levels of communication have been established?

It’s important to communicate about all of this in an organized, succinct way. Remember it’s okay if you don’t have all the answers, but think about what is important to share with employees both in the days leading up to Day 1 and after. Don’t forget to consider cultural differences between the companies as well.

What about IT Security?

What about it? IT Security can be a can of worms on its own but throw in an integration and you need to really look at things. It is very likely that the two companies will have different policies and standards for IT Security. Start with an assessment and understanding of current state for both sides, then consider implications at every step of planning and execution. Hint: look for things like PCI and general industry requirements. Some industries have a higher need for protection and lower risk tolerance than others.

M&A can make for an exciting and dynamic environment for employees, sometimes creating career opportunities. This should be balanced with the understanding that, depending on the circumstance, it can also be the harbinger of change and instability for employees. So, try not to underestimate it and remember that effective planning and execution will make it a smoother ride.

M&A can make for an exciting and dynamic environment for employees, sometimes creating career opportunities.

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