Speaker 1: If you're part of a company that has grown through mergers and acquisitions, you've probably found that you're not getting as much business value out of those acquisitions as you could, and you're probably also finding a certain degree of disjointed processes, people, and systems. I'm going to talk in today's video about how to integrate your mergers and acquisitions. My name is Eric Kimberling. I'm the CEO of Third Stage Consulting. We're an independent consulting firm that helps clients through their digital transformation journeys. When we're working with clients that are either PE-owned or they're going through a high degree of mergers and acquisitions and scaling at a very rapid pace, we find that it's hard enough for companies with organic growth to keep aligned and to keep their business processes and their systems integrated, but especially for companies that grow through mergers and acquisitions. Companies tend to struggle even more to get the full business value out of their investments in these new companies. Their people and their culture is often misaligned or different. You oftentimes have different or siloed ways of operating, and the systems and technology oftentimes are different and don't communicate well together. To get the full value out of your investments in any sort of merger and acquisition activity, you need to have a merger and acquisition integration plan, and that's what I'll talk about here today. Now the first step to integrating your merger and acquisition targets and fully leveraging the value of those investments is to make sure that your executive team is on the same page with what the company wants to be when it grows up. Make sure you have a clear vision for what your operating model is going to look like. Are you going to take more of a top-down approach to your transformation? Are you going to have a common standard operating model? Are you going to allow these acquisitions to operate independently? Are there certain parts of the business that you want to standardize while leaving other parts independent? Those are some of the decisions that need to be made, and they need to be clearly made so that the executive team, especially to the extent that your executive team has grown through the acquisitions and you have new executive team members as a result of the acquisitions, you want to make sure that we're all on the same page with how the future of the company is going to look. Once you have that alignment, then and only then can you start to define what your roadmap forward is. What we see is a lot of companies that have grown through merger and acquisition make assumptions around how the transformation is going to look and how the integration of the different companies is going to look, but they haven't gotten that alignment at the top level yet, at the executive level, as far as what exactly that means and the definitive parameters around what the integration is going to look like. Without that as a prerequisite, your integration efforts are going to fail, so having that executive alignment is a key first step in the whole process. The next step in the merger and acquisition integration process is to assess the business processes you have in place, the current state business processes, as well as the current systems you have, the current technologies that you have across the different acquisitions or across the different parts of the organization. The really important part of this is to get an inventory of what you have, not because you are going to keep things the same and you just want to document things for documentation sake, but because you want to do a sort of a gap analysis to look at how the companies are different, how different parts of the businesses are operating differently, how you might leverage best practices from one part of the company to another, and ultimately how you're going to bring this all together and what our vision is for that target operating model. Ultimately, we need to assess our business processes, the systems we have in place, and we also have to assess our people, which I'll talk about here in just a second. One of the biggest reasons why merger and acquisition integrations fail is because the people or the cultural side of the integration doesn't match. The cultures are too misaligned. The cultures aren't changed. The cultures aren't ultimately integrated. The whole people side of the equation is what is most likely to derail any sort of integration efforts that you might have, and just like I made the point about executives having to be aligned as a prerequisite to a successful integration, so too must you have a fully integrated culture and a fully integrated organizational change in people side of the equation. Some of the things to assess in this bucket or this area of focus would be organizational design, really understanding people's roles and responsibilities, look for those redundant business processes, the inconsistent roles and responsibilities, the discrepancies in the way that the organization is designed across different parts of the business. The other part is to look at the culture of the organization and try to quantify or define what that culture is, how they're different from different parts of the company, and ultimately what you want your culture to be as a combined entity going forward. Having that clear vision of what you want from the people side is very important and really the entire transformation and integration plan should be fueled by and enabling that whole people and cultural integration side of things. Now to do this, to assess the organizational and people side of things, a very effective way to do this is to conduct an organizational assessment and really look at the quantitative and the qualitative aspects of your organization and your culture. There's tools that we use. I'd be happy to share some of those tools with you if you reach out to me. I've included my contact information below. But in general, just know that the people and cultural side of things is a very important step in the whole integration process. So the next step in the process is to identify potential improvements. You've assessed your people, you've assessed your operations and the processes, you've assessed your systems, you've defined at an executive level how you want to align as an organization. Now it's time to define what is it we want to change? What do we want to change in all those different buckets that we just talked about? And we can't change everything overnight. A lot of these cultures and business processes and systems were developed over decades in some cases, and we're not going to change that overnight. So we need to prioritize and figure out what is our transition plan? How are we going to phase that integration plan so that we can do so in a way that doesn't overwhelm the organization? One that is aggressive but doesn't introduce too much change and risk into the organization? And ultimately one that's going to allow you to get the most business value out of your acquisitions and the reason for the M&A activity in the first place. So prioritizing and defining what those opportunities for improvement are is the step that will then lead into the definition of your integration plan, which I'll talk about here in a second. Now that you've assessed, you've prioritized, you've identified opportunities for improvement, now it's time to define what is that integration and transformation plan? How are we going to roll this out? How are we going to address the people side of things, the process side of things, the system side of things? And having a deliberate strategy and plan that makes sense for your culture and your organization and your goals as an organization, that's the last step in the process here is to make sure that we take everything that we've done in terms of assessment and prioritization, understanding the lay of the land today up against what the future state needs to look like and defining what the priorities are and how that plan is going to unfold. So getting the full business value out of merger and acquisition integration is easier said than done. Most organizations fail to do it. Some start on the journey and don't get very far. Some never even start on the journey. Others fail miserably in their attempts, but regardless of where you want to go as an organization, it's important that you have a clear integration strategy so that you have a vision and a plan and a roadmap that's prioritized, makes sense for you to help you get the most value out of your organization. I've included a number of tools and resources below that should help you in your transformation. I also encourage you to please reach out if you have questions or you want to brainstorm ideas on how to make your integration more successful. I've included my contact information. Please also provide any comments you have in the comments fields below. I also encourage you to please subscribe to the channel as well. Thanks very much for your time and hope you have a great day. Bye. Bye. Bye.