Merger Integration: Delivering on the Promise - Booz Allen Hamilton
Merger Integration: Delivering on the Promise - Booz Allen Hamilton
Merger Integration: Delivering on the Promise - Booz Allen Hamilton
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PRINCIPLE 3:<br />
SIMULTANEOUSLY<br />
EXECUTE AGAINST<br />
COMPETING CRITICAL<br />
IMPERATIVES<br />
Companies need to balance<br />
several critical imperatives<br />
simultaneously as <strong>the</strong>y map out<br />
and engage in <strong>the</strong> merger integrati<strong>on</strong><br />
process (see Exhibit 7).<br />
Translate <strong>the</strong> Shared Visi<strong>on</strong><br />
As we menti<strong>on</strong>ed before,<br />
<strong>the</strong> CEO’s visi<strong>on</strong> must be acti<strong>on</strong>able.<br />
The organizati<strong>on</strong> must be<br />
equipped with <strong>the</strong> means to<br />
translate mere words into deeds<br />
to effect a transiti<strong>on</strong> and successfully<br />
integrate people and assets.<br />
The balancing act here is to<br />
provide a road map clear enough<br />
to allow those implementing <strong>the</strong><br />
visi<strong>on</strong> to know specifically what<br />
<strong>the</strong>y need to do — while not<br />
smo<strong>the</strong>ring <strong>the</strong> energy and<br />
creativity that it takes to realize<br />
<strong>the</strong> prize (that is, deliver <strong>on</strong><br />
<strong>the</strong> commitments made at <strong>the</strong><br />
time of <strong>the</strong> announcement).<br />
Create One Company<br />
The challenge of creating <strong>on</strong>e<br />
company from two formerly<br />
independent — and quite often<br />
competitive — organizati<strong>on</strong>s<br />
looms large. Those leading <strong>the</strong><br />
new organizati<strong>on</strong> must quickly<br />
move bey<strong>on</strong>d rhetoric to truly<br />
combine <strong>the</strong> two companies and<br />
create a single, bigger, and better<br />
competitor. The pitfalls are<br />
numerous (see Exhibit 8), but<br />
<strong>the</strong> opportunities to create new<br />
value are even more prolific.<br />
Exhibit 7. Imperatives for Successful <str<strong>on</strong>g>Integrati<strong>on</strong></str<strong>on</strong>g><br />
Stable<br />
Operati<strong>on</strong>s<br />
Source: <strong>Booz</strong> • <strong>Allen</strong> & Hamilt<strong>on</strong><br />
Close<br />
Value<br />
Capture<br />
Build Stakeholder Enthusiasm<br />
In <strong>the</strong> wake of a merger<br />
announcement, CEOs and <strong>the</strong>ir<br />
senior managers must direct <strong>the</strong>ir<br />
focus not <strong>on</strong>ly within but also<br />
outside <strong>the</strong> organizati<strong>on</strong> and rally<br />
<strong>the</strong> enthusiasm of <strong>the</strong> various<br />
stakeholders that <strong>the</strong> new company<br />
will need to succeed. Good<br />
intenti<strong>on</strong>s do not always translate<br />
into good communicati<strong>on</strong>, which<br />
is unfortunate, since it is critical<br />
that key stakeholders — be <strong>the</strong>y<br />
shareholders, customers, employees,<br />
suppliers, or regulators —<br />
fully buy in to <strong>the</strong> potential of<br />
a merger.<br />
Everything communicates,<br />
not just press releases and official<br />
bulletins. You send a clear<br />
message to customers, for example,<br />
when you increase prices in<br />
<strong>the</strong> wake of a merger or cause<br />
customers to suffer service<br />
Translate<br />
Visi<strong>on</strong><br />
Successful<br />
<str<strong>on</strong>g>Integrati<strong>on</strong></str<strong>on</strong>g><br />
Energized<br />
Team<br />
One<br />
Company<br />
Stakeholder<br />
Enthusiasm<br />
disrupti<strong>on</strong>s. What to say, to<br />
whom, when, and by whom are<br />
all critical <strong>on</strong>going decisi<strong>on</strong>s<br />
that need to be made quickly<br />
and clearly as part of an overall<br />
communicati<strong>on</strong>s strategy that<br />
balances c<strong>on</strong>flicting interests<br />
and messages.<br />
It is tempting to tell every<strong>on</strong>e<br />
what <strong>the</strong>y want to hear, but<br />
rarely, if ever, is that a feasible<br />
or realistic goal. The merger will,<br />
necessarily, create winners and<br />
losers am<strong>on</strong>g your various c<strong>on</strong>stituencies.<br />
In communicating<br />
with each of <strong>the</strong>m, you should<br />
emphasize as h<strong>on</strong>estly as possible<br />
what’s in it for <strong>the</strong>m — al<strong>on</strong>g<br />
with <strong>the</strong> value propositi<strong>on</strong> <strong>the</strong><br />
newly combined company offers.<br />
For those who stand to benefit,<br />
regularly dem<strong>on</strong>strate progress;<br />
for those who will be negatively<br />
affected by <strong>the</strong> merger, mitigate<br />
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