Post-Merger Integration & Transformation Program

The Challenge:

ABC Company was launched following the acquisition of certain assets from XYZ Company. Together with the private equity partner selected following a long process, we were also subsequently able to purchase 2 other businesses within 4 months and 16 months respectively resulting in a $600m services provider with a global footprint and 5,500 employees worldwide. Since all acquired assets/companies were either in ‘wind down’ mode or corporate orphans, no back office or material support systems were acquired as part of any of the transactions. Furthermore all 3 legacy businesses had operated with very distinct ‘command and control’ cultures and standard operating processes. Not only did ABC Company need to create an enterprise team and back office for a complex business that was operating at a highly functioning program level, but multiple, distinct cultures also needed to be harmonized into a ‘one ABC Company’ culture so that ABC Company could optimize performance and drive the value committed to the Board of ABC Company and its’ investors.

Action:

This task required the whole team not only to work together effectively but to create value in the process. Increasing the complexity was the fact that the entire team was largely unknown to each other and still in the early stages of building trust. Additional team members would join over the next 12 months walking into a process that was already underway; it required a great deal of humility to hear what might have been done differently but also to accept that some aspects of the business had evolved to ‘be what they will be’. We worked hard to ensure that ‘perfect was not the enemy of good enough’. We took the following steps to be successful:

1 It was crucial to define which team member was responsible for each critical item; clearly defining roles and responsibilities in a ‘matrix’ environment and providing a mechanism for swift dispute resolution. We created a reporting structure that allowed for early identification of issues and took the needs of all stakeholders into account.

2 We realized that we had to force the cross-functional team to communicate often and effectively to avoid ‘silo’ mentalities. After a few initial mishaps (accounting ledgers being set up in a manner reflecting 1 legacy company only as an example), we were able to course correct and, after a few months of forced cross-functional calls/reporting, relationships started to organically form to a place where communication would happen naturally. We also identified those individuals who continued to struggle with working in a silo and simply set an expectation that those to whom it came more naturally would be the example for this. In time, cross-functional teamwork became a strength of the enterprise team at ABC Company.

3 Where new processes/policies/functions needed to be created or refined, we created a habit and practice of getting together in person to workshop together and create a solution to present around which everyone broadly aligned. We worked hard to involve our partners in the business lines and (where necessary) business development to ensure that there was a team-centered approach to resolving the challenges, setting goals, KPI’s and expectations.

4 Over time, it was interesting to see many of the team become closer personal friends in addition to teammates such that in a recent engagement survey it was clear that this ‘team’ dynamic is what kept many of them at ABC Company despite all the hard work and trials. It was very challenging to work in a constant entrepreneurial pseudo-start up environment and this camaraderie was critical. It became the key not only to the culture but to the success of ABC Company.

5 The team accepts the need to continuously improve and be self-critical (not to tear down but to build up) in order to be successful. A great deal was invested in L&D, coaching and mentoring programs and leadership development. 

Outcome:

After 4 years, an employee engagement survey at ABC Company demonstrated that associates identify more with ABC Company than a legacy organization and that the processes and back office supports the ABC Company enterprise as one cohesive organization with only pockets of ‘legacy’ activities that still needed to be harmonized. The ABC Company brand is strong internally and increasingly externally. When a further acquisition was made, transition was almost seamless because the back-office machinery, systems, processes, and functions operate so efficiently together. ABC Company also delivered unparalleled year-on-year growth, meeting or exceeding the commitments made to investors against almost every KPI.