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Integration Management

M&A increase people's workloads, but there is often a failure to prioritize work and thus the right thing gets done only by chance. After the initial excitement surrounding deal announcement, acquiring firm managers typically turn their attention back to prior tasks.92 However, issues arising from implementation will need immediate attention. Managing integration thus needs to be kept separate from the day-to-day demands of firm operations.93 This means it is necessary to make integration implementation a manager's only responsibility. In many successful acquirers, this person is called an integration manager.

An integration manager with full-time responsibility and accountability for making integration work can help avoid the problem of having managers who participated in integration planning simply returning to the demands of their regular jobs. Used effectively, integration managers perform the task of keeping others focused on creating value, and maintaining the momentum from integration planning.94 Successful acquirers select this person from the integration planning team, empower them, and then track progress toward achieving integration goals through reviews that help identify needed changes. These reviews focus on making business units respond to the integration manager, and, by extension, help the combined firm be successful. They can keep uncertainty from stalling integration by maintaining a focus on implementation and by providing a mechanism for addressing issues and making decisions.

Integration managers require good project management skills, but more importantly, they need to be general managers. Assigning an executive from the acquiring firm that has been made redundant due to the blending of the top management team gives the new top management team an integration manager they trust. If the team is announced early, the person selected can also be ready to start integration the moment the acquisition completes. However, attracting the right talent to this role requires acknowledging that the position has limited duration (about one year) and is part of a leadership pipeline. The reward to the integration manager is increased visibility with the promise of a promotion. Meanwhile, the reward to the organization is better integration, and managerial talent with firsthand knowledge of M&A difficulties, as experienced managers form part of the firm's acquisition capability.95 Another alternative would be to select someone close to retirement so as to leverage their experience and provide them with a transition event that is meaningful for both the individual and the organization.96

Continuing Adaptation

The plan that begins any successful endeavor is not the same path that is ultimately followed, and any single acquisition will be only part of a larger corporate strategy. As an acquisition is planned and integrated, new information becomes available, setbacks occur, and competitive dynamics change, all circumstances that require adaptation. Feedback mechanisms to maximize learning and performance guide dynamic adjustment by firms in order to reach aspiration levels.97

Despite managers' best efforts, it is unlikely that targets will be optimally integrated the first time, and restructuring will need to be repeatedly applied to unlock as much value as possible. Managers confront messy problems through a process of considering alternatives then assess results that follow experiential learning. As experience with integration and restructuring is gained, managers will be able to make better decisions when recombining units.98 This process, however, takes time, and it can take years after an acquisition before changes in firm performance are observed. Though each context will be different, different researchers have suggested three years may be needed before positive results can be achieved from an acquisition.99

Successful implementation also requires recognition that there is more than one way to achieve a goal, so implementation should focus more on the desired end and remain flexible on how goals are accomplished. Restructuring may require creating new divisions from existing resources or new acquisitions, dividing divisions into different groups, eliminating divisions by reallocating resources or divesting assets, or additional options. However, successful acquirers capitalize on each success, while recognizing that continued improvement requires additional restructuring. Two gauges of success to monitor during implementation are how well talent and customers are retained. These will provide early indications of whether improved performance is being achieved or additional changes are required.

 
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