Post Acquisition Integration

Mike RobinsonBusiness Mentor

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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

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

Challenges of Acquisition

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1. Obsessive list making2. Over focus on the legal and financial due

diligence3. Content free communication4. Barnyard behaviour5. Preaching Vision and Values6. Rewarding the wrong behaviours 7. Assuming the talent is better in the

acquiring organisation

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Seven deadly sins of M&A

Identifying the right targetCommit resources to the integration process earlyRecognise the complexity of the integration process

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Avoiding the seven deadly sins

Re

sour

ce In

vesti

ng

Pre- close Completion Integration

Slow start

Emergent undiscovered risks/issues generating re-work

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Application of resources for integration

Re

sour

ce In

vesti

ng

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

Identifying the right targetCommit resources to the integration process earlyRecognise the complexity of the integration processCreate a sense of velocityTake 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?

Identifying the right targetCommit resources to the integration process earlyRecognise the complexity of the integration processCreate a sense of velocityTake time to really understand the target organizationDevelop a campaign approach to integration

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Avoiding the seven deadly sins

Beer & Sandwiches Team Briefing

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First Lions team to win series since 1974

British Lions 1997 Tour of South Africa

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A high performing culture?

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Resignation of Martin Johnson

Think long … but not too long

Think hard

Be bold

Act decisively

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Conclusion