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Post Acquisition Integration Mike Robinson Business Mentor

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

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Post Acquisition Integration Mike Robinson Business Mentor

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  1. Post Acquisition IntegrationMike RobinsonBusiness Mentor

  2. 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 • 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 www.avondale.co.uk

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  4. 7 Deadly Sins of Integration Over focus on the legal and financial due diligence Unrealistic expectations Failure to integrate expeditiously Lack of shared vision Conflicting corporate or national cultures Not investing adequate resources to complete the integration Assuming the talent is better in the acquiring company www.avondale.co.uk

  5. Challenges of Acquisition 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 www.avondale.co.uk

  6. Resources for Integration • Management elasticity • Management capability www.avondale.co.uk

  7. www.avondale.co.uk

  8. Avoiding the seven deadly sins • Identifying the right target • Inform customers as soon as possible • Commit resources to the integration process early • Recognise the complexity of the integration process www.avondale.co.uk

  9. Application of resources for integration Resource Investing Emergent undiscovered risks/issues generating re-work Slow start Pre- close Completion Integration www.avondale.co.uk

  10. Application of resources for integration Resource Investing Early Investment Emergent undiscovered risks/issues generating re-work Coasting Home Slow start Pre- close Completion Integration www.avondale.co.uk

  11. Avoiding the seven deadly sins • Create a sense of velocity • Involve managers from both organisations • Take time to really understand the target organisation www.avondale.co.uk

  12. Ask two key questions • Who conducts your salary appraisal? • Who do you go to when things go wrong? www.avondale.co.uk

  13. Knowledge Management • 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 www.avondale.co.uk

  14. Where is Wally? www.avondale.co.uk

  15. Where is Wally? www.avondale.co.uk

  16. Avoiding the seven deadly sins • Develop a campaign approach to integration • Develop a meaningful communication plan • Take a proactive approach to building the new team www.avondale.co.uk

  17. Commitment to the team Developing the Performance of a New Team post-acquisition Team outputs - performance Forming Storming Norming Performing

  18. Ben Ainslie’s Role in Winning the America’s Cup

  19. Ben Ainslie’s Role in Winning the America’s Cup

  20. 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

  21. Sir Alex Ferguson Man Utd 86-13

  22. Sir Alex Ferguson’s Record • 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 www.avondale.co.uk

  23. David Moyse – Manchester United • Lasted less than ten months in post • Finished 7th in Premier League

  24. Louis van Gaal ……

  25. Conclusion • Think long … but not too long • Think hard • Be bold • Act decisively www.avondale.co.uk

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