The Conference Board recently sponsored a 2 day seminar on Post Merger Integration. Best practices were shared from HP, IBM, Sun Microsystems, John Deere, J&J, JP Morgan, McKinsey and many others. While most presenters acknowledged that the failure rate of acquisitions is still high, Diane Sias of McKinsey, suggested that the larger companies who are serial acquirers have a higher success rate because they are able to develop specialized internal skills and standard processes for integration. Further, Pat Caveney of HP, emphasized the advantage of having full time personnel dedicated to the integration process and separated from the day-to-day operational personnel. David Johnson from IBM says that they have placed a strong emphasis on involving the integration team early in the due diligence process.
Another interesting approach to acquisitions was taken by John Deere, who has established an acquisition capability within their Dealer Development Services Group. They have concluded that stronger dealers lead to better sales and stronger dealers are characterized by size and financial strength. So they have offered their skills to help facilitate the consolidation of their dealers (a consolidation that was inevitable) in an effective way.
Stephanie Snyder of Pritchett spoke eloquently about the effects of culture on integration. She encouraged the audience to work toward understanding and respecting the differences and to limit the desire to change cultures unless absolutely necessary to support the strategic objectives of the business.
JP Morgan and Sun Microsystems surprisingly shared many of the same best practices in merging very different kinds of sales forces. Both recommended that compensation plans stay in place through the first year even when very different. The difficult decisions regarding job loss and relocation were important to execute early in the integration process. Organizationally they did differ. See our article on Best Practices: Sun Microsystems for more information on Sun’s approach.
Jack Prouty of Step-Change Management reinforced our ThirdWave Integration™ approach by classifying the integration process into three stages, each with a different objective – value retention, value realization, and value creation.
I’m sure there were many different “take-aways” for other attendees but these were a few of the comments and practices that I thought were significant.