The purpose of integration is more than just the integration of assets, systems, and processes. It must also achieve the engagement, commitment, and accountability of all parties towards a common cause. Most integrations fail by not taking these reasons into consideration.
Based on integration efforts found in the areas of Mergers &Acquisitions, Corporate Turnaround, Investment Acceptance, and Cultural Change activities, we have observed:
* Most still do not work.
"…the most frequent and serious problem merging institutions encountered was unexpected difficulty in integrating the people" - Wall Street Journal, January 2002. Without a well planned integration strategy that allows the people involved to find reason to want to belong, peak performance with even the best of integration plans will not be achieved.
* Do you care? Who should care?
Do you care that the integration necessary following these activities is set up for success? Some are happy with closing the deal and moving on, others believe (at least to some degree) that they should have some responsibility to see integration through to success. In order to answer this, we get to take a look at the purpose of our own organizations – do you care? Should we care?
* Integration planning begins with the end in mind.
A full integration plan has a beginning, an end, and a strategy to fill in the gap. This is where we come in. However, in companies that choose to do this themselves, this gap analysis is currently done when “we come in, meet your people, and prepare a plan”. This is obviously not working for the companies going it alone. Without a proper diagnosis or assessment, even the best of prescriptions will fail. Most of the integrations that we have observed fail due to lack of planning or putting the wrong plan in place.
* Assessing and integrating assets and resources is key.
We have seen great success stories in integrating manufacturing plants, financial processes, IT systems, etc. However, who runs these systems and processes? Are people an asset or an expense? If they are an expense, treat them as such in your integration plan. If they are an asset, treat them as you do other assets. We coach you to consider what the asset is worth, which assets are necessary to reach implementation goals, and what is the regular maintenance necessary to keep the value of the asset.
* Slow down to speed up.
Our observations show that most integrations that fail begin without a formalized way of planning, benchmarking, and measuring the system. These integrations usually take 3-5 years to complete (one way or another). Our observations are that successful integrations have 6 – 12 month plans, monthly benchmarks, and true measures of success. The biggest difference is that successful integrations start slow. This allows people to catch up and inherently finish quicker.
2007 will be a year with a large amount of integration. As the saying goes, “If you keep doing what you have been doing, you will keep getting what you have been getting.” We continually ask those involved in M&A, Corporate Turnaround, Investment, and Change Management functions : Who is responsible for causing this change?