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The Turtle Won’t Win This Race

by on January 16, 2014

Turtle

Here’s a One Question Quiz:  What do you think is the single best predictor of successful merger integration?

Answer: The length of time for the Transition Period.

The longer you take to integrate, the closer you are to failure.  Disappointing deals are directly related to slow integration.

The Turtle Won’t Win This Race

The turtle may win the race in fairy tales but not in the high stakes, high risk game of merger integration.  You may say, “Yeah, everyone knows that.”  The problem is that companies still have big difference of opinions about what “fast” is.

Most mergers take longer than they should. The executives, management, and integration teams embark on their mission to integrate the companies full of hope and high expectations.  But then, BOOM, they get hit by other matters that demand the attention of the executives and management.  There are other issues that emerge that suck up financial resources.  What once started out with lots of energy eventually loses momentum, attention, and initiative.  Attention spans are short.  The integration needs to be short, too.  The slower you proceed with the integration process the more likely the project will end up a victim to this affliction. It’s just too hard to keep everyone’s attention for very long.

Far too often executives sit down, reason among themselves, and conclude that they are damn well going to take their time and do the integration right.  Sounds good in theory, fails miserably in practice.  When it comes to speed of execution, so-called “prudence” becomes a reckless strategy.  People argue that they need to study the situation longer, weigh the alternatives one more time, consider all the angles, wait until they have everybody on board.

That’s simply garbage.

Speed is Good

It’s a race and the turtle won’t win this one.  It’s a race against the operating issues that are just typical in every merger.  A race against competitors who are building a better product.  A race against customers who have a million other choices.  A race against employee disenchantment.  A race against your critics – the people who would love to see you fail.

You can’t afford to tolerate any form of procrastination, even if it appears as the prudent thing to do.  While you pause, your competitors push ahead.  While you debate, your customers will abandon you.  Decide to think about it a little longer and you let the doubters gain the upper hand.

No Perfect Solutions

It’s crucial that you fight the natural tendency to study the situation and craft the perfect plan.  There are no perfect solutions in merger integration.  Only good and timely ones.

So be fast!  Use speed to implement solutions before the doubters can even isolate the problems.  Use speed to disorient those that are fighting change.  Now is the time to be lightning quick.  Speed stacks the odds in your favor.

Integration Manual

The best way to come out of the gates at full speed is to be prepared.  The best way to run an offense is if everyone is using the same playbook.  You need an Integration Manual.

I’ve created that Integration Manual and you can get it.  It provides:

  • A checklist of the key measures of every successful acquisition, from pre-deal to post-deal.  You will be able to anticipate problems before they arise and to plan well in advance each step in the process ensuring a successful transaction.
  • A comprehensive step-by-step process for effective communication, both internal and external, and key points to address in every integration communication.  This guide will ensure you speak to the employees of the target company in their language, and provide tools for communication executives that are making the announcements.
  • Each department is provided a checklist of deliverables at different stages of the integration, from LOI to Announcement, from deal Announcement to Closing, Closing plus 1 week, Closing plus 1 month, Closing plus 3 months, and Closing plus 9 months.  You will be able to layout and identify each aspect of every minuscule task that needs to be accomplished, making it easy to create an executive dashboard on the progress of the integration at every step.

p.s.

If you’re wondering how you build a company that you can sell for a premium in a few years, contact me to discuss the Valuation Amplification Process.

I also invite you to download the white paper and learn the 5 step process on How to Quickly Increase Your Valuation: a Proven 5 Step Process.  http://www.therevenuegroup.net/free-offer.html

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From → M&A, Strategy

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  1. Mergers are Seismic Events | Mike Rogers

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