Since the beginning of the year, the conditions that foster deal-making activity have largely improved. The stock markets have rallied and the broad economic recovery has inspired confidence in corporate boards that the worst is over.
Many of the announced deals through Monday, including Kraft’s recent offer for Cadbury, Disney’s $4 billion purchase of Marvel Entertainment and eBay’s sale of a majority stake in its Skype unit, also involved different types of activity, from hostile bids to corporate mergers to private equity transactions.
But no matter what the merger flavor, mergers require integration, and companies who delay getting their integration capabilities up to snuff will see value destroyed and synergy realization delayed.
As we have stressed repeatedly throughout this downturn, slow times are a perfect opportunity to improve core operation competencies. Post acquisition integration is the perfect discipline to examine and improve while deal activity is slow.
Companies can prepare now by taking a few simple steps:
1) Examine past deals and post integration success and failures: A thorough post mortem on your last integration will yield clues to where your biggest integration pain points reside. Do a little research and outline where integration competencies need to be improved.
2) Talk to Acquired employees: Senior management and rank and file employees can provide plenty on the pros and cons of your last integration. Was your communication plan spotty; are there still “integration projects” open and requiring attention? Find out so you can prepare accordingly for your next integration.
3) Create and Integration Playbook: A scalable integration playbook is the foundation for integration expertise. Any company doing integration well is working off a playbook that is a living, breathing repository of integration tools, templates and lessons learned that they use to inform each integration.
Use this time to get your integration skills honed and ready for that next deal.
Scott Whitaker is President of Whitaker & Company, Inc., an Atlanta based consulting firm providing post merger integration expertise, tools, templates and playbooks for companies involved in frequent mergers and acquisitions.