Point of View
M&A 2.0
Leveraging emerging technologies to address
“social aspects” of mergers & acquisitions
Avinash Jhangiani
Innovator. Digital Strategist. Business Technologist.
http://about.me/avi
2012

Preface
Mergers and acquisitions have become a familiar part of today’s business
landscape. The ability to rapidly yet effectively integrate is imperative to
gaining the strategic competitive advantage that companies sought for
before closing the deal. However the integration of two companies not
only means amalgamation of their business processes and systems, it
also means combining of two organization structures, cultures, and
working relationships. In order to create one company whose value is
greater than the sum of its parts, effective collaboration and
communications are essential. These human capital or social aspects of
mergers and acquisitions are overlooked many-a-times, causing
integration delays and/or merger failures.
This point of view discusses the social challenges of M&A and provides
recommendations to creatively address these challenges by leveraging
emerging Social Media concepts and tools during post-merger
integration.

The adverse impact caused by the social aspects of M&A quickly compound over
time if they are not addressed before core integration activities begin
People
• Loss of critical employees
and social connections
• Culture clash
• Loss of productivity
• Fear-uncertainty-doubt
(FUD)
Key social
challenges in
M&A
integration Collaboration
Communications
• Poor interaction between
• Inconsistent tone and employees of the merging
content of key messages to organizations
employees and customers
• Top-down approach to
• Lack of appropriate
integration, esp. in areas
feedback mechanisms to decision making and
address concerns and risks sharing of best practices
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CIOs can leverage emerging Social Media technologies to address these issues,
thereby effectively managing and accelerating integration
Issues
Business
M&A
People Collaboration Communications
Benefits
 Identify, maintain, and  Manage interactions  Create an employee  Improve visibility over
leverage existing working between LOBs, feedback loop to attain
How Social Media can
address these issues
integration activities
relationships in the workstreams, partners, real-time, ground-level
combined organization vendors, and other feedback about the  Enable effective
 Define skills sets and ecosystem entities perceptions of the deal knowledge transfer
locate SMEs to fit the job  Define target operating  Manage customer and
 Analyze knowledge model community concerns and  Increase employee
exchanges and  Decentralize decision misperceptions productivity
information flows between making addressed proactively and organizational
cross-functional teams  Capture best practices  Bridge the gap between efficiencies
and facilitate learning leadership and staff
 Enhance combined
 Online Profiles  Collaboration platforms  CEO Blogs, Moderated NewCo brand equity
Enabling
Tools
 Social Networks  Wikis consumer-facing blogs
 Web-based communities   Podcasts  Promote workforce
Social Tagging
 Ratings  RSS stability and address
external stakeholder
concerns
 Organization: rigidity of the organizational structure (hierarchical vs. flat collaboration
Constraints
model), existing knowledge management tools, operational alignment, cultural alignment  Retain key talent to
(reclusive vs. eager to engage), and level of governance
maintain business
 Workforce: diversity, age, and geographical distribution
continuity
 Business: employee turnover, importance of knowledge retention, level of transparency
with customers, level of regulation  Organizational
alignment towards
“Connections can help “Leverage wisdom “Be consistent,
integration objectives
combine cultures” of the crowds” accurate and timely”
-4-

Companies that have used Social Media for merger and acquisitions have benefited in
some very compelling ways
• Collaborative decision making: Defining Target Operating Model and sharing decision documents
in the Integration planning phase using employee-facing collaboration platform
• External communications: Blogging to connect with customers and address questions and
concerns about the merger at http://blog.wellsfargo.com/wachovia/
• Integration efficiencies: Drastically increasing its already-increasing efficiency in merger
integration efforts by collaborating using Social Media tools like Wikis
• Reduction in transaction costs: Closing acquisitions far more quickly is proof of an enterprise-
scale reduction of transaction costs, thereby enabling Cisco to undertake more transactions and be
more responsive and adaptive
• Tracking integration interactions: Used social network analysis to map and measure the melding
of information flows, work relationships, and knowledge exchanges to track where integration was
happening and where it was not occurring.
-5-

Following a structured approach similar to those used for other enterprise
applications is the key to successful Social Media implementations
Assess Plan Execute Manage and Grow
Assess the current Develop a plan for Launch the Social Manage the Social
environment and the using Social Media Media project and Media initiative and
characteristics of to deliver value execute the plan develop a growth
Social Media strategy
 Determine overall  Define scope, scale, and  Implement the  Analyze success of the
business strategy goals of the project project plan initiative: understand
 Understand Social Media  Develop a detailed  Focus on the goals and where things went well
and specific pain points that business case measures defined in the and also where not so
it will address  Use business case to business case well and why
 Assess strategic alignment identify and manage  Take incremental stops  Understand where value
risks, set goals and was truly created and
with goals of Social Media define metrics and measure actual
metrics against how to leverage it
 Analyze technical  Develop a project plan to
environment assumptions in  Identify a growth strategy
focus on the metrics and
business case based on experience and
 Assess alignment and mitigate the risks from the
business case  Make modifications maximum value creation
readiness of organizational
structure and human  Incorporate best practices where necessary based
capital initiative for launching a successful on actual results
Social Media initiative
Social Media is more about people and less about
technology. Developing a business case to assess its
fit and value is essential.
-6-

Developing a detailed business case is a key component of successfully leveraging
Social Media
Two fundamental questions need to be addressed…
What value is created by
1 this investment and how
is it measured?
What are the major project
2 decisions and how do they
affect costs?
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It is important to define the quantitative and qualitative benefits along with cost
drivers for a comprehensive business case for Social Media
Determine area’s of the organization affected by the Social
Social Media initiative Business Case
Media Results:
Strategy: Define Quantitative Benefits: Define Qualitative Benefits:
 Identify components and  Clarify operational
 Goals Quantitative Analysis:
measures of the benefits improvements
 Scope and  Determine variances and  Understand how to gauge  NPV
Scale dependencies among improvements and  IRR
 Support components determine indirect measures  Graphical Scenario
Analysis
Understand project steps that will affect the quantitative benefits
and the operational improvements created by qualitative benefits
Qualitative Analysis:
Establish ownership of the operational changes
 Areas of operational
improvement
Define cost drivers  Indirect measures for
 Understand how costs are affected by project plan decisions assessing effects
Determine direct Determine areas Analyze areas of Stakeholder buy-in,
costs of of indirect costs future costs related ownership
implementing related to changes to managing and responsibilities, and clear
the initiative or operational growing the initiative plan for realizing and
improvements measuring value
-8-

The answers to key questions will help maximize business value from Social Media
Category Questions and Considerations
 Which of the M&A challenges (people, collaboration, communications) are you trying to address?
Value
 Are you planning to leverage Social Media in BAU mode?
 Does Social Media align with your company strategy?
Strategy  Will Social Media enhance your competitive advantage?
 Are you already experiencing the adverse effects of not implementing Social Media?
 What are the demographics of your combined workforce?
Human
 Has a part of your workforce already begun using Social Media for business purposes?
Capital
 What is the target state of the combined culture of NewCo?
 Do you believe there may be value in exposing hidden or untapped networks within the combining
organizations?
Organizational
 How much collaboration between employees does your current organizational structure allow?
Structure
 What changes to your organizational structure are necessary and how difficult will they be to
implement?
 What specific audience(s) are you trying to engage? Employees? Customers? Business partners?
Audience
 What are the risks associated with giving power to this audience?
 What existing systems does your company have?
Existing Systems  To what degree do you want your Social Media to be integrated with existing systems?
 What technical requirements does your company have?
 What external government regulations does your company and industry have to follow?
Compliance
 What are your internal compliance rules? Information-specific rules? Technology-specific rules?
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Thank you for your time!
Need help?
Contact Avinash Jhangiani if you need help with developing
innovative social, mobile, and web strategies for your
company.
Profile: http://about.me/avi
LinkedIn: http://linkedin.com/in/avijhangiani
Twitter: http://twitter.com/goodthing
Blog: http://youarenew.blogspot.com