POST MERGER INTEGRATION PMI TEAM TRAINING Introduction Best

POST MERGER INTEGRATION (PMI) TEAM TRAINING

Introduction

Best Practices on Successful PMI (in descending order of criticality) • Appoint a strong executive to clearly lead the integration process • Compress change duration by taking bold strokes early • Provide for real incentives to reach targets • Set out credible milestones and maintain pressure for progress • Move quickly with regard to personnel changes • Build a robust plan detailing integration activities • Emphasize the transfer of critical capabilities to capture value • Ensure senior management involvement in integration activities • Adopt best practices in key functions from either the acquired, acquirer, or some external source • Get task forces (with people from both companies) interacting as soon as possible (Source: Booz Allen survey of over 500 successful and unsuccessful deals)

Framework For PMI Value Creation Framework What: The Vision • What is the vision for the new enterprise? • How will value be created for customers & employees? • How will the new enterprise achieve its objectives? Ø new capabilities Ø new products Ø new markets What The Vision How The Architecture Who The Leadership How: The Architecture • What parts of the business should be integrated? • At what level in the business should change occur? • At what pace should the integration proceed? • What capabilities should be migrated, shared, and built upon? • What operational and overhead savings can be obtained and how do they fit with specific targets? Who: The Leadership • Who leads the process (overall and day-to-day)? • How is the change created and managed? • What are the roles of the CEO and key executives? • How is participation between the two companies balanced? • What level of resources should be dedicated to the process? • How should culture differences be managed?

Three Elements Necessary For PMI Driven Change Elements Present Vision Architecture Leadership Outcome Successful post-merger integration Change isn’t cascaded throughout both companies Or at all levels No focus: new enterprise lacks direction Chaos: no process for integration An academic exercise Bureaucracy Empty charisma

Critical Success Factors 6

Elements of a Vision Mission Core Values And Beliefs A set of tangible goals and actions Basic precepts that reinforce culture, values, and purpose Distinctive Capabilities Fundamental Purpose Expectations About the Future Environment A set of competencies that enables the delivery of an organization’s unique value A definition of the value that the company and its employees create and deliver A common understanding of the future Know Where You Are Going Overall and the Extent to Which the Merger Helps Fulfill the Vision

Extent and Pace of Integration Accelerated ve i s s Unequal e gr Ag Pace of Change Relative Size of Companies Equal u tio s u a C Slow Diverse Similar Type of Business

Bias Towards Speed

Functional Considerations SOURCE: 2009 Post Merger Integration Conference Survey (New York and San Francisco combined) 10

THIS IS ONLY A PARTIAL VIEW OF THE PMI TRAINING COURSE. THE NEXT 23 PAGES OF SLIDES AND VIDEOS ARE INTENTIONALLY NOT SHOWN. THE FULL UNRESTRICTED COURSE IS AVAILABLE TO BOTH 2 -DAY AND ANNUAL SUBSCRIPTION MEMBERS ONLY FOR DOWNLOAD AND REUSE. 11