BMO Financial Group's Bill Clarkin and Guidehouse's Jonathan Shiery discuss modernizing the IMO and building an effective synergy plan at the recent M&A Science Virtual Summit Event (June 10-11, 2020). The panelists reviewed 7 key principles in M&A integration and emphasized how each deal is different and deserves unique attention, how COVID-19 has impacted and will continue to impact M&A integration, and how integration work is challenging, yet highly rewarding
The 7 key principles discussed include:
Bench strength creates rapid flexibility: Routinely review M&A playbooks and refresh M&A knowledge to stay resilient and give your organization flexibility when considering new acquisitions.
The Pen is Mightier than the Sword: Have the integration in mind when negotiating. When going through the integration, be sure to document everything and ensure all agreements are cleared by Legal partners.
Climb the Mountain: Integrating can be a monumental task akin to climbing a mountain. To successfully lead your team to each 'basecamp', it's key to build trust in team members and bring a positive attitude to the table.
Speed is Key: When deciding on the best integration strategy, an IMO needs to be conscious of time. It may be human nature to want to delay, but maximizing synergy objectives frequently requires moving quickly.
Do Not Delay: Set ambitious goals and avoid delaying unless it's necessary. To put it in Bill Clarkin's words: "You can always delay, but don't delay until you absolutely have to."
80% is the Right Answer: When integrating, leverage the 80/20 rule to make decisions quickly and to keep the integration on track. Using a "One Throat to Choke" approach can help put power in decision makers’ hands and help to mitigate delays due to waiting for decisions by consensus.
Talk Isn't Cheap: Communicating in an M&A cycle is critical to be able achieve goals. People don't expect things to go perfectly in an M&A integration, but covering up the truth can cause people to lose trust.
Special thanks to Jason Mraz for contributing to this article.