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Related Topics
- Mergers and Acquisitions
- Strategic Alliances
Description
A Merger Integration Team is a group of senior managers from two merged companies charged with delivering on sales and operating synergies identified during the deal?s due diligence. The team?s composition should represent both companies, and the team?s role is critical: acquisitions most often fail because merged companies fail to successfully integrate. The Merger Integration Team should bring together champions with long-term prospects at the new company. The team doesn?t do everything but does make sure that everything gets done; individual sub-teams perform the detailed integration work. Beyond driving the integration, the Merger Integration Team ensures that core line managers remain focused on running the base business. Establish Merger Integration Teams quickly (ideally before a deal closes), and set up an integrated organizational structure before the work of capturing synergies begins.
Methodology
To capture synergies, a Merger Integration Team should:
- Build the master schedule of what is to be done and when;
- Determine the required economic performance for the combined entity;
- Establish sub-teams to work out how each function and business unit will be combined (e.g., structure, job design, staffing levels, locations, downsizing);
- Focus the organization on meeting ongoing business commitments and operational performance targets throughout the integration process;
- Create an early warning system of performance measures to ensure that both the integration and base business stay on track;
- Monitor and expedite key decisions;
- Establish a rigorous communication campaign to aggressively and repeatedly support the integration roadmap, addressing internal and external constituencies.
Common Uses
Merger Integration Teams help companies:
Focus on key sources of value for the merged organization. An effective transition team can ensure the right integration decisions and tradeoffs are made to focus attention on underlying strategic issues. Rather than getting mired in details, the team focuses on key concerns such as drivers of long-term profit, performance targets, cost management, and competitive, product, and customer strategy.
Maintain performance of the base business. Allocating dedicated resources to the integration effort clarifies non-teammembers? roles and enables day-to-day operations to continue at pre-merger intensity. As part of the integration process, the Merger Integration Team should develop and monitor a set of key performance measures that track underlying profit drivers. Such monitoring constitutes an early-warning system for unfavorable trends.
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Selected References
Ashkenas, Ronald N., and Suzanne C. Francis. "Integration Mergers: Special Leaders for Special Times." Harvard Business Review, November 2000, pp. 108-116.
Davenport, Thomas O. "The Integration Challenge." Management Review, January 1998, pp. 25-28. Lajoux, Alexandra Reed. The Art of M&A Integration:
A Guide to Merging Resources, Processes, and Responsibilities. McGraw- Hill, 1997.
Marks, Mitchell Lee, and Philip H. Mirvis. Joining Forces: Making One Plus One Equal Three in Mergers, Acquisitions, and Alliances. MacMillan Library Reference, 1998.
Pritchett, Price, Donald Robinson, and Russell Clarkson. After the Merger: The Authoritative Guide for Integration Success. Irwin Professional, 1997.
Schweiger, David M. M&A Integration: A Framework for Executives and Managers. McGraw-Hill, 2002.
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