M&A: When the rubber hits the road – what to do on Day 1 and beyond

Context

Much of what we do as Technology Leaders comes down to – People, Processes, Technology and Data.

And this holds true for M&A.  During Due Diligence, through the negotiation and signature process and leading up to deal completion, you will have been assessing the target organisation, planning as much as you can and preparing for the future state.

Day 1 is when you take full responsibility for the Technology of the acquired organisation.

There will be set piece activities, you need to complete on (or soon after) that first day.

And the pressure will be on validate and then complete the plans you have been developing so you realise the intended value of the acquisition as soon as possible.

Focus

So, once the deal has completed, what do you focus on in terms of people, process, technology and data?

People

Acquisitions can be periods of great uncertainty – for both the teams being acquired and your own teams. Your job is to provide structure for all parts of the Technology organisation and as much clarity as you can. You need to share what happens next – even if this is only for the short term.

You are likely to have had some engagement with the transferring Technology team prior to deal completion, but as legally separate entities, interactions will have been limited.

Once the deal is completed, there will be set piece announcements about the interim organisation structure and responsibilities (including any agreed changes) – and company-wide communications. You will also want to work with your own and the transferring leadership to secure critical resources (and their knowledge).

But over and above the defined approach – it’s about human connection. So

• Meet up: introduce yourself and the teams to each other

• Acknowledge things will change: recognise differences in styles, culture and strategy

• Start to develop relationships: talk about how you want to work together from Day 1, formally and informally

• Be open: be prepared and willing to answer questions (in line with the agreed communications plan) – and be honest if things are unclear or undecided.

Day 1 is the start not the destination – so communicate, communicate, communicate …. what you do on that first day sets the tone, but teams will really judge you on what you do next.

Processes

Some processes may continue unchanged in the short term, but you will need to be clear about cross-organisation priorities, particularly: authorisations - financial & organisational, communication, escalation and management of potential and actual breaches (data and security).

If the acquired organisation is operating under a Transitional Support Agreement (TSA), you will need to agree responsibilities and establish governance.

And you will need to confirm governance for projects and programmes and whether in-flight initiatives (both yours and those of the acquired organisation) should stop or continue.

Technology

The level of technology change, to achieve the target end state, will be driven by your company strategy and your technology strategy.

As an immediate priority you will need to ensure the new organisation is compliant, eg you may need to acquire additional licences, update compliance bodies with new information, ensure relevant officers are in place (eg for Data Protection).

And you will need to implement the agreed urgent technical changes. These could be as straightforward as changing the legal wording on forms and email footers or federating collaboration software – or it could mean replacing key technology which is not transitioning with the deal.

As well as working with the company providing transitional support you will need to work with your new team to engage with existing suppliers for the acquired organisation and secure service whilst the any strategic changes are planned and actioned.

Data

Data security and access to information will be key priorities. The wider business will be keen to see consolidated reporting as soon as possible – and as part of the agreement of urgent changes, you will have confirmed what will (and won’t) be done in the short term.

Where integration is planned, an assessment of master data will be key; will part numbers need to change and what impact will that have on your customers? Is there duplication – and does that provide a simplification opportunity?

Additionally, Day 1 is when you get full access to data about the acquired organisation and the ability to fully engage with SMEs in that organisation. So, it is also the time to validate the assumptions you have made prior to deal completion and get a full understanding of risks, costs and opportunities.

Want to know more 

As practitioners, we understand what is typically most important to you; we will align our plans with what is most important for each deal opportunity.