By the numbers
While the statistics regarding successful post meager integrations (PMIs) involving reorganization appears alarming, it need not be. To a large degree, success is determined by the process taken in order to achieve the results, along with bringing in the expertise and leadership to properly manage the effort.
According to McKinsey research, only 16% of merger reorgs fully deliver their objectives in the planned time, 41% take longer than expected, and in 10% of cases, the reorg actually harms the newly-formed organization. (see article)
Communicating is key
Key to any successful PMI lies in communication across all stakeholders, managers, and knowledge workers in the organization. Communication starts by articulating the strategy behind the M&A event and the organizational change, operational activities, business cases, success measures, and timeframes needed in order to implement the strategy. Particular focus is needed on communicating across the vast number of vertical and horizontal communication paths needed to identify, quantify, and prioritize activities. Proper facilitation of this effort results in communications transparency – the ability of impacted parties to understand the solution sets, provide feedback, and escalate in order to form a truly workable solution.
It’s complicated
Another success factor is managing complexity in the face of demanding timelines and key resources that are typically overextended as they contribute to M&A activities while managing their daily responsibilities. The technique to be applied is to start with a broad and high-level view of organizational change and then drill down only as needed to quantify (timeframe, budget, resources) and prioritize. While this sounds easy enough conceptually, there is a great deal of work performing scoping, modelling, resource leveraging, and prioritization.
Methodology
Also important is working with a pre-defined and proven methodology. A Post-Merger Integration Office (PMIO) is typically responsible for this. The Analysis Methodology provides for the approach, definition and prioritization of strategy goals, operational strategy, operational impacts, operational process, technology strategy, and technology transition. Important to managing the project is the Governance Plan to define who is involved, the organization chart, roles and responsibilities, risk and issue management process, escalation process, and the like. The Communications Plan defines standing meetings (status, escalation, stakeholder communication to name a few), milestone review meetings, collaboration tools, and security policy. By having all of these considerations laid out beforehand, resources can be more highly leveraged and more time is spent in getting the analysis done.
Avoiding the gap from plan to execution
While gaps may occur anywhere throughout the analysis, the key transition points that GPG is mindful of are: 1) Strategy to Operational Impact, and; 2) Operational Design to Technology Enablement. Even the most renowned of consulting firms struggle with these gaps as they separate their talent pools and methods by strategy, business process, and technology without providing a full end to end perspective. Also, GPG introduces technology enablement considerations as early as the first transition noted above since, in today’s business environment, technology drives operational efficiency, product definition, and market advantage.
