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In The Deal NewsWeekly Gerald Adolph and Goran Hagegard of Booz Allen Hamilton Inc lay out a 3-Year, 100-Day post-merger integration plan.
Merging two organizations requires a vast amount of planning and attention to detail to create an entity that can perform in the near term and satisfy the overall strategic objectives of the partners. Yet it is all too natural to find oneself focusing mainly on the first 100 days after deal close. While this 100-day plan -- in practice a day one and short-term operating plan -- is critical to achieving the objectives of the transaction, focusing on it to the exclusion of all else can injure the organization two to three years down the road. Given this reality, we suggest management take a dual approach: the three-year, 100-day plan.
This seeks to link two aligned and concurrent integration plans, closely coordinated but with distinct purposes. The near-term, 100-day plan emerges as a road map to securing immediate gains and getting the organization moving in the right direction post-close. Meanwhile, the longer-term three-year, or end state, plan looks to how the combined company will create value over time and helps set direction for the short-term plan. It is much like making a long putt, where a golfer must focus both on the hole and an interim target two feet in front of the ball.
Just what do these plans look like? The 100-day plan is perhaps the most familiar. It is essentially designed to create wins -- putting meat on the table for skeptical investors, employees and customers -- to set direction and to capture the cost savings and growth upsides that are possible within this window. In contrast, the concurrent long-term end-state effort focuses on elements that are necessary to build a strong foundation for the combined entity and create and sustain value. Importantly, the end-state plan guides development of the 100-day plan. In implementing the three-year, 100-day plan, we have have found there are three areas where the dual approach is most critical: Building capabilities. From the onset, selecting and building capabilities necessary for the long-term success of the combined company must be an imperative. This means having a nuts-and-bolts conversation about the organization's strength and competitive advantages, both for today and the future. It is critical in this process to understand why things work, including the subtleties of customer success, cost to serve and what really drives head count. This will let managers make short-term decisions that take long-term consequences into account. Developing a programmatic approach. The merged organization will need to develop an approach that assures coordination between the teams driving change. This can help create a sense of momentum as the transaction moves forward and also can provide an opportunity to build transparency by establishing common methods of reporting, best practices and a shared understanding of the deal's overall strategic perspective. Such an approach allows managers to look across teams to make sure all tasks sync up. Remembering the softer side of integration. Senior management must consider the more sensitive aspects of the deal, which move in tandem with all the hard-dollar decisions made during the first 100 days. Organizational structure is important but meaningless if early decisions alienate the rank and file. Management has a golden opportunity to create an organization where people are passionate and enthusiastic both to work and to win. Focus on consistent communication, not only to address and manage uncertainty but to successfully lay a foundation for the organization's future culture and environment. Managing the three-year, 100-day plan occurs at all levels, starting at the top with the company's board. Clearly defined roles and tasks result in clear ownership, accountability and the ability to measure progress. When a merged organization can successfully create and implement the three-year, 100-day plan, transition planning becomes an easy matter. The entire effort is like driving a car. Only by both looking down the road and being conscious of the vehicle's current position can the driver keep the car on track and headed for home. Gerald Adolph is a senior vice president at the management consulting firm Booz Allen Hamilton Inc. and leads its mergers and restructurings group. Goran Hagegard is a former principal at the firm, focusing on corporate finance and strategy. Categories Deal Video
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