Integration Strategies of Newly Acquired Business

What is integration strategy, do we have one and can it be implemented?

Large corporates have teams of people who get engaged in the integration of a new acquisition although most midmarket acquisitions will keep an eye on costs and minimise the number of people involved leaving the process to line managers. Some may have a formal strategy process, some will “wing it” or leverage past experience. It is important to have a plan, any plan, which can be used to communicate an objective. The plan does not need to be a 100 page PowerPoint deck with the many key charts activities and working groups.

Keep it Simple

Keep the integration plan simple however a key question to ask is “what is the basic structure of the integrated business”? Is it going to operate autonomously or will it be absorbed into the acquiring business. Will back office services be shared, will IT systems be harmonised? What about financial reporting structures and timetables?

Absorb & Assimilate into One

Often there is difficulty in extricating a business out of a large corporate where the back office has been integrated in a common IT platform with many shared services. How do you replace these services while keeping costs under control? What about the people? Who is going to fill key roles, what are their titles, what is the structure? How do we address those that are underperforming, will the underperforming teams be transformed by the new company leadership, new strategy and perhaps strengthened balance sheet? Or, do we need to replace key elements of the team?

Autonomous or Semi Autonomous

Which of the strategies are you going to implement, scenario 1 or scenario 2? How much time will you need to develop the plan, consult with the appropriate parties and carry out the plan. What resources do you need? Who do you need on the team? Can your M&A services provider assist with this strategy? A good M&A services provider would typically be able to provide guidance and appropriate resources and leverage extensive experience. Ask them for their input, most would be more than happy to assist.

A key part of keeping the staff of the acquired business “on-side” is to involve them in the process. They will be expecting big things from their new owners and expectations are high. First impressions count. If you don’t have an integration strategy and implement it as you are taking control, you will quickly lose credibility, you could lose key staff and seriously damage your investment. Preserve your investment, have a focus, have a theme and motivate all staff to work to a common goal.

Communicate the Plan

Communicate and communicate, have an integration strategy and avoid the damage to your investment of being asked “what is integration strategy” or “what is our integration strategy”? Some large companies underestimate what is involved, ensure you are well prepared.