post acquisition integration mike robinson business mentor
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Post Acquisition Integration Mike Robinson Business Mentor. Challenges of Acquisition. Only 23 % of all acquisitions earn their cost of capital In acquired companies 47% of executives leave within the first year and 75% leave in the first three years - PowerPoint PPT PresentationTRANSCRIPT
Post Acquisition Integration
Mike RobinsonBusiness Mentor
Challenges of Acquisition
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Only 23 % of all acquisitions earn their cost of capital
In acquired companies 47% of executives leave within
the first year and 75% leave in the first three years
Projected synergies not achieved in 70% of cases
1/3 of acquisitions achieve an increase in shareholder
value, a 1/3 destroy value and a 1/3 do not meet
expectations
In the first four to eight months following a deal
productivity can be reduced by up to 50%
Sources: PWC, Wharton Management School, Watson Wyatt Worldwide
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1. Over focus on the legal and financial due diligence
2. Unrealistic expectations
3. Failure to integrate expeditiously
4. Lack of shared vision
5. Conflicting corporate or national cultures
6. Not investing adequate resources to complete the integration
7. Assuming the talent is better in the acquiring company
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7 Deadly Sins of Integration
A study of 190 CEOs, CFOs and other top executives reported that,
“cultural incompatibility is consistently rated as the greatest barrier to successful integration but that research on cultural factors is the least likely to be done as an aspect of due diligence”
Source: Watson Wyatt Worldwide
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Challenges of Acquisition
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Resources for Integration
Management elasticity
Management capability
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Identifying the right targetInform customers as soon as possibleCommit resources to the integration process earlyRecognise the complexity of the integration process
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Avoiding the seven deadly sins
Pre- close Completion Integration
Slow start
Emergent undiscovered risks/issues generating re-work
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Application of resources for integration
Pre- close Completion Integration
Slow start
Emergent undiscovered risks/issues generating re-work
Early Investment
Coasting Home
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Application of resources for integration
Create a sense of velocityInvolve managers from both organisationsTake time to really understand the target organisation
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Avoiding the seven deadly sins
Who conducts your salary appraisal?
Who do you go to when things go wrong?
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Ask two key questions
10% of an organisation’s knowledge is explicit.
90% of an organisation’s knowledge is implicit.
Organisations frequently do not codify their tacit knowledge.
Source : Professor Nokana
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Knowledge Management
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Where is Wally?
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Where is Wally?
Develop a campaign approach to integration
Develop a meaningful communication plan
Take a proactive approach to building the new team
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Avoiding the seven deadly sins
PerformingNormingStormingForming
Comm
itment to the teamTe
am o
utpu
ts -
perf
orm
ance
Developing the Performance of a New Team post-
acquisition
Ben Ainslie’s Role in Winning the America’s Cup
Ben Ainslie’s Role in Winning the America’s Cup
Sept 13 Oracle Team US 8-1 down in the series against NZ
Bold decision to sack the existing tactician
Ben Ainslie appointed to takeover
His impact was immediate on the team
The team won the next 8 races to take the America’s Cup
First Britain to be in a winning boat for 110 years
"The Americans were beaten until Ben joined the boat," says Sir Knox-Johnston.
"Ben may be risking his life if he visits New Zealand, but there's no question it was Ben's arrival which changed the chemistry completely." www.avondale.co.uk
Ben Ainslie’s Role in Winning the America’s Cup
Sir Alex Ferguson Man Utd 86-13
26.5 years with Manchester United
38 Trophies won
The club had a reputation for players drinking and living the “playboy” lifestyle when Alex Ferguson arrived
Sir Alex paid attention to all issues in the club
Re-established discipline in the club
Built the foundations for succession planning
Removed individuals who did not display the norms
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Sir Alex Ferguson’s Record
David Moyse – Manchester United
Lasted less than ten months in post
Finished 7th in Premier League
Louis van Gaal ……
Think long … but not too long
Think hard
Be bold
Act decisively
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Conclusion