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Delivering engagement in integration webinar, 3 September 2020

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Delivering engagement in integration webinar
Thursday 3 September 2020

presented by
Jon Burke

The link to the write up page and resources of this webinar:
https://www.apm.org.uk/news/delivering-engagement-in-integration-webinar/

Publicado en: Educación
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Delivering engagement in integration webinar, 3 September 2020

  1. 1. Delivering Engagement in Integration Jon Burke OA PowerPoint Template1
  2. 2. OA PowerPoint Template2 Background and Experience § Marketing, commercial management and acquisition integration § Industries include: Engineering, Security and Access Control, Industrial technology, Distribution, Consumer durables: Smart technology § Listed, privately owned and PE-backed businesses, with turnover from £100m+ to £6bn, UK/ EMEA/ N. America § Consolidation and transition of up to 24 businesses across multiple sectors § Identification of acquisition targets and development of commercial justification § Consolidation of commercial teams to minimise cannibalisation and maximise commercial effectiveness – generating measurable profit growth § Development of acquisition integration playbook
  3. 3. Survey Question 1 Yes No OA PowerPoint Template3 Have you been involved in Business Integration?
  4. 4. Survey Question 2 Yes No OA PowerPoint Template4 Would you regard the integration as a success?
  5. 5. OA PowerPoint Template5 Why do acquisition integrations fail? § Poor Integration Process § Cultural Integration Issues § Limited Owner Involvement § Mis-valuation / Overpaying § Large Required Capacity § High Recovery Costs § Negotiation Errors § External Factors Over 12 surveys in the last 2 years put the range of failure rates between 55 – 90%. Average of industry figures indicates 65% failure rate
  6. 6. 6 Key Integration Objectives Build on established processes and capabilities to design and implement an integration strategy and programme that delivers on deal rationale § Achieve all statutory and critical actions ready for Day 1 (Transaction Close) § Ensure that the new combined business continues to run effectively from Day 1 § Mitigate all risks, including disruption and distraction from business-as-usual, through rigorous integration planning § Setup and run a structured and well-resourced integration programme focused on: § Building on the best of both businesses, engaging ‘hearts and minds’, as well as assets § Delivering expected deal synergies and other deal objectives § Delivering functional alignment / integration to ensure that any agreed changes to the way the business is run occurs in a planned and effective manner § Staying within the agreed cost/time brief § Recognising the importance of people as central to the success of any changes we choose to implement
  7. 7. 7 Integration Management Office (IMO) Overview 1. Pre-Planning Objectives: § Finalize all core integration planning requirements & direction Engaged Personnel: § Senior leadership team § GPMIP engagement lead Inputs: § Deal thesis, target operating model, diligence information, executive input Outputs: § Briefing deck for IMO kick off 2. IMO Kick Off Objectives: § Mobilize all IMO participants and begin integration plan development Engaged Personnel: § Senior leadership team § Functional leads § GPMIP engagement team Inputs: § Briefing deck Outputs: § Instructions and next steps for plan development and project management 3. Plan Development Objectives: § Prepare Day 1 communications and functional integration plans Engaged Personnel: § Senior leadership team § Functional leads § GPMIP engagement team Inputs: § Briefing deck § Target functional data Outputs: § Day 1 Communications and Year 1 Functional plans & Integration Roadmap 4. Execution Objectives: § Post close execution Engaged Personnel: § Senior leadership team § Functional leads § GPMIP engagement team Inputs: § All planning elements Outputs: § Initiative completion § Issue & risk escalation & mitigation § Post close communication updates § Transition to BAU Have in place a consistent process from agreement to purchase through to execution – first 100 days and beyond
  8. 8. 8 Health Check Framework During Phase 1 use an integration health check framework to ensure the programme is aligned to the six key themes that are at the heart of successful integration (deal execution). Key objectives: § Ensure regulatory compliance is adhered to § Identify key deal value execution risks § Enhance confidence in delivery & planning § Opportunity to resolve capacity/capability gaps § Prioritise any remedial actions and/or support required § Improve eventual business outcomes § Improve team morale § Independent challenge to check that scope, timescales, costs and benefits are realistic OBJECTIVES & SCOPE § Vision and strategic alignment § Business case and assumptions § Deal & integration strategy § Programme & workstream scoping § Delivery complexity & approach § Delivery status § Readiness for delivery GOVERNANCE § Organisation and governance structures (e.g. SteerCo, IMO, Workstream levels) § Workstream and project definition § Key project roles & responsibilities § Mandate & delegation of authority § Alignment of project & functional governance SKILLS & CAPABILITIES § Incentives § Skills, capabilities and capacity § Resource and performance management § Training § Procurement and supplier management § Plans for future capabilities § Business readiness § Planning for future processes, skills and structural change § Change management challenges § Key dependencies § Customer issues § Technical challenges § Appropriate solution(s) OTHER § Benefits realisation management (synergy validation and delivery) § Budgeting and funding to deliver programme objectives § Accounting and financial control mechanisms (e.g. capex; including synergies into BAU budgets) § Cost and synergy sensitivities FINANCE § Alignment to IMO Processes § Planning, reporting, risk/issue & action management § Project methodology § Stakeholder and communications § Quality management, configuration and document management § Project assurance; lessons learned PROJECT APPROACH The health check aims to ensure the integration overall and each workstream is meeting key success criteria to deliver intended outcomes through successive integration phases
  9. 9. 9 Communications & Change Management Managing noise Orchestrating message delivery Addressing “What about me?” distractions Coordinating information post- close Navigating the emotional response to change Shaping culture vs. cultural surprises Design a change and communications strategy that addresses one of the most pressing concerns, the impact on key stakeholder groups, notably customers, staff and suppliers. The primary goal is to ensure disruption arising from integration is minimized and a new, combined team quickly establishes a ‘new normal’ Winning hearts and minds internally, whilst convincing customers and suppliers of the benefits of the new, combined company:
  10. 10. 10 Setting the IMO up for Success: 6 Lessons Learned
  11. 11. 11 Lesson 1: Seeking and Delivering Value Any integration programme, spearheaded by an Integration Management Office (IMO), should be primarily focused on the identification and delivery of value, and to ensure the new, combined business is set up for success from Day 1. Joint incentivisation and handover from deal team to integration team is key. The aims of the IMO should be to ensure that: • Projects are continuously prioritised according to expected synergies and cost to realise, but also complexity, risk, and available capabilities to deliver in order to optimise return on project investments • Projects are set up for success from the start and have clear ownership, accountability, capability & capacity • Quantifiable benefits are delivered through well planned and high performance project execution to ensure that synergies and other key deliverables are linked to KPI’s and operational milestones; as well as Integrated into the organisation’s financial and performance measurement processes • Projects are consolidated into an overall master plan that facilitates synchronisation across workstreams/projects in terms of impact, delivery timing and resourcing; with clear, concise Exec reports • Governance at all levels is appropriate for the complexity being managed at each level, as well as integrated within existing line management governance and wider change initiatives. • All IMO processes and services remove, rather than add duplication; and drive efficiencies in delivery. The focus is on the content, rather than format. The IMO needs to be Execution Ready by Close. Business Case Value capture - A Value creation Leverage best practice, cross sell Valuecreatedfor shareholders OpExcellenceto target stakeholders Change the Rules Change portfolio and increasing performance Increase revenue and/or margin Re-engineer business processes Release duplicate / unnecessary assets Reduce third Party expenditures Rationalise suppliersConsolidate overlapping operations One-off Integration costs + Minimise Distraction Disruption Costs + Cultural impact Integration Related Costs Organisational Efficiency Procurement Rationalise Operations Business Processes Transfer Capabilities Revenue Growth Business Strategies Market Transformation TYPICAL M&A INTEGRATION VALUE MODEL
  12. 12. 12 Lesson 2: Key Success Factors Learn the lessons of past integration projects (what worked well, what didn’t and why); and incorporate the wisdom of all parties central to the successful delivery of integration. From our experience, some of the key success factors include: Quick Start Shared Vision Holistic Approach Aspirational Targets Built on Trust Capability Investment 1 Integrations work best if they are based on a shared vision across the company – involving all functions and levels. Speedy mobilisation of the integration team is a proven way to kick off an integration. ‘Cherry-picking’ usually fails − a holistic approach works and unlocks much more value. Articulate “value to the business” beyond cost. The integration programme will drive business change – targets should be aspirational; but benefits delivery should be from Day 1. Creating trust (credibility, intimacy, …) is just as important as the right business design. Most organisations can enhance both technical and change / project leadership skills. Strategy is key, but fast-paced execution is essential. 80-20 approach; do not aim for perfection in all areas. 2 3 4 5 6 Focus on Execution 7
  13. 13. 13 Lesson 3: Focus on all People-related factors In addition to practical experience from deals, the industry research over the last 30 years is really clear: • Most companies identify the right solution; but far fewer succeed in delivering expected value due to poor implementation (execution) • 9 out of 10 reasons for this failure are people-related, either: • Insufficient capabilities and/or capacity in execution (”we’ve done the deal, it’ll just happen, right?” Wrong. Delivering the Value is far, far harder than doing the Deal.) • Issues related to leadership, politics, incentivisation, retention, co- ordination, clarity of roles and loss of focus of business as usual (linked to the capacity of key leaders and managers to deal with running the business and involvement in the integration programme) 6 key areas to focus on to ensure Integration Readiness • Vision • Incentives • Culture • Actions • Resources • Skills We should explore the Ingenico approach to each of these as we identify the key factors to set up any Ingenico integration programme for success…
  14. 14. Weak PMO High-performing PMO Integration PMO (IMO) 14 Lesson 4: IMO Approach A weak PMO is reactive and purely process driven. A high-performing PMO is proactive and directly benefits delivery and control, raising standards. An IMO has to go even further. It requires a greater intensity, pace of delivery and reporting. It is a very robust function, using an additional toolset, and delivering unique products in the most complex of environments. Features § Reactive § Process and function driven § Poor benefits management § Lack of cross-programme support. e.g. management of inter-dependencies and strategic risk management § Perceived as bureaucratic Features In addition to the ‘standard’ high-performing PMO... § Is responsible for driving the integration programme - the ‘engine’. § Drives an extremely intense, fast pace of integrated planning, reporting and interdependency management (daily). § Delivers significant challenge and support to the workstreams. § Enables rapid executive decision making. § Generates and owns an additional toolset of products on behalf of the Integration Programme e.g: § Day 1 checklists and ongoing plans § Integration strategy and future blueprint § Workstream charters and checklists § Transitional Service Agreements Features § Proactive § Benefits (value) focused § Integrated with governance & business, enabling strategic decision making and risk management. § Supports delivery § Engenders continuous improvement
  15. 15. 15 Lesson 5: How mature do our IMO Services need to be? IMO Services have a range of maturity. The skill of the integration team is to assess what is appropriate for the needs of a specific Integration Programme. The integration team should also assess what is required for all integrations; i.e. the degree of repeatability/standardisation needed will drive the level of maturity required IMO Service Maturity Level Description (what does good look like?) Level 1 - Awareness of process No documented process. Activity is uncontrolled and works in a reactive manner Level 2 - Repeatable process Documented process is carried out but not formalised (ad-hoc, with unpredictable results) Level 3 - Defined process Consistent disciplines started, using repeatable processes supported by standardised templates and materials. Level 4 – Managed Process Processes are well defined and applied consistently in the majority of situations and managed proactively. Some effort is applied to assess continuous improvement opportunities. Level 5 – Optimised Process Processes are always applied consistently using best case practice. Regular review of processes to identify opportunities for continuous improvement and plans executed to continually optimise processes. 1. Scoping (Day 1 Readiness / Integration Workstream Charters) 2. Programme Governance (Simple, Disciplined & Legally Compliant) 3. Team Mobilisation & Resource Management 4. Cost & Benefit (Financial) Management 5. Virtual Collaboration, Document Control & Knowledge Management 6. Planning & Dependency Management 7. Progress Reporting & Cost Control 8. Risk & Issue Management CORE IMO SERVICES HIGH PERFORMANCE IMO SERVICES 9. Detailed Scoping (Project-level Definition) 10. Project Portfolio Prioritisation & Change Control 11. Contract / Supplier Management 12. Delivery Assurance & Quality Management 13. Project / Programme Management Capability (deployed into Workstreams) 14. Business Change Management 15. Operating Model Capability 16. IMO Capability Building & Knowledge Transfer FOCUS IN PRE-CLOSE AND EXECUTION PHASES ADDITIONAL FOCUS IN EXECUTION PHASE WHAT IMO SERVICES?
  16. 16. 16 Lesson 6: Day 1 Planning Focus The Integration team should be mapping workstreams to deliver both (1) specific synergies / deal value (high priority projects) and (2) functional integration. GPMIP use multiple tools to assist clients in Day 1 planning, including detailed Day 1 checklists for every function - this focuses on the prioritisation of functional integration activity. Day 1 Planning Priorities: • Deal Rationale • Integration Strategy • Functional Day 1 priorities: 1. Statutory/legal requirements 2. Critical Day 1 Enablers 3. Functional integration priorities • Workstream Priorities: 1. Project planning to deliver deal value 2. Project planning to deliver functional integration 3. Project planning to deliver changes to overall operating model (if required) Day 1 Checklist Status Update: No. of actions No. complete No. still to complete No. overdue (Red) No. of actions No. complete No. still to complete No. overdue (Red) No. of actions No. complete No. still to complete No. overdue (Red) No. of Relevant Actions No. complete No. still to complete No. At Risk (Amber) No. overdue (Red) TOTAL 9 0 9 0 43 0 43 0 28 1 27 0 2204 1 79 0 0 53 19 407 212 311 355 0 0 0 0 0 0 71 226 0 0 0 1 00 0 0 0 0 0 0 0 0 0 0 2 0 0 0 0 0 0 90 147 99 122 0 00 0 0 0 Nice to Have 14 1 13 0 13 0 13 0 TOTAL 00 0 0 0 0 1 0 1 0 3 246 72 0 0 0 Green 0 0 0 0 0 0 1 0 0 0 0 Marketing Green 0 0 0 0 1 2 0Products Green 0 0 0 0 2 0 Green 0 0 0 0 0 0 0 0 0 0 0.0% Complete 1 0 9 0 0 0 0 6 0 6 0 0 0 0 0 0 Key Day 1 Enabler 9 0 30 0 30 0 0 0 0 0 1 0 0 2 0 2 0 2 0 0 00 0 0 0 1 00 0 0 0 0 0 0 0 0 0 0 0 0 0 19 0 0 0 Property Green 0 0 0 0 0 0 0 Procurement 0 0 0 Green 0 0 0 0 Green 0 0 0 0 2 Comments 0 1 52 00 Green 0 0 0 Green 0 0 0 0 0 0Green 0 0 11-Mar-19 Exec Overall Legal Finance Customer Service Green 0 0 Green 0 0 Green Workstream Checklist Developed Checklist Agreed Green Statutory / Critical Distribution HR Sales IT Prog. Man. Comms 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2 0 0 0 0 0 0 0 0 0 0 0 0 0 00
  17. 17. 17 Delivering a future-proof approach A proven mix of value, execution, and repeatability designed to deliver the deal rationale and mitigate risks associated with the deal and integration programme. Activate value Execute rigorously Transfer knowledge & repeatability § Connect integration objectives to business strategy and deal objectives § Prioritise focus and realisation of synergy goals § Maximise acquired human capital § Mobilise Integration Management Office (IMO) § Implement comprehensive but flexible process orientation to manage complexity § Empower internal expertise § Prepare training for Integration Planning and Execution Essentials to prep internal integration teams § Create Integration Playbook for consistent planning and execution of future activity
  18. 18. OA PowerPoint Template18 osmastonassociates.com jon.burke@osmastonassociates.com

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