Five years from now, each of us will look back at 2022 and the decisions we made to keep our Integration Management Office (IMO) intact and running.
Interestingly, I forecast that five years from now IMOs will play a cemented role in organizations. Crossroads, forks and tough decisions lay in front of all IMO Leaders as we roll into Q4.
This reminds me of a time in the early years of my career. I had a fork in the road to pursue either an amateur golf status or a business degree.
Either path had potential highlights and failures. A golf career was fraught with injury, canceled sponsorships, extensive travel away from home, and second-guessing myself. Yet, the reward of playing some of the world's best courses, maintaining strong athleticism, and playing a sport I loved kept the dream alive.
On the contrary, my wife appealed to my left-brain dominant thinking with hints of graduate school and the stability it could afford our young family.
At that time of my career decision, if I had a crystal ball to see my future in five years then would it have made my decision easier? Maybe. But not having that crystal ball meant I needed to rely on non-magical items to help me sequence my thoughts.
Let's apply three key tenets to help you close out the year with your IMO in tip-top shape.
1. Hire the best talent to create your future state
An English playwright by the name of John Galsworthy famously said
"If you don't think about the future, you cannot have one."
Golfer or successful business person? Could I see my future in either case? For sure I was enamored by the fame of being a top-seeded amateur golfer. I saw glimmering trophies adorning three display cases of my Florida home.
On the flip side, I could also see myself joining early at a startup and rising the ranks quickly to make VP before my thirty-sixth birthday.
IMOs are an amalgamation of people doing amazing things to deliver value for an acquisition; it is not a singular entity and requires company-wide coordination. To fuel the IMO (and it's success), you will want to stack the team with your best hires or transfers.
Unfortunately, the number of corporate development and integration practitioners in the market is finite. At M&A Science, we are giving out scholarships to the next generation of students to learn what it takes to be part of our industry.
Creating a team of seasoned practitioners affords the IMO a wealth of experience and knowledge to be sought after when times get busy. I am not giving financial advice, but if companies are not transacting during this recession then these very same companies may not come out of the recession in good standing.
Setting up a strong team is important no matter the timing.
Margie Thomas of Auctus Search Partners confirms:
“one of the most important measures of success is the capability of the IMO team to deliver against the integration goals''.
Integration requires a unique skill set, balancing traditional project and change management expertise with high-touch soft skills such as communication, persuasion, and diplomacy.
To find and retain top talent you need to be realistic about your needs.
Structuring your approach
- Identify critical roles and skills gaps across the entire integration process. Look deep into past integrations to identify key individuals who made a strong contribution.
- Create a career path around integration. Exceptional talent value new experiences and opportunities to upskill and reskill.
- Equip individuals to take the lead. Encourage employee engagement from the early stage of pre-announce through integration
- Showcase success. Behaviors that demonstrate best-in-class skills build motivation and achievement.
Top integration talent is hard to find. High-valued IMO leaders have used creative sources to build a future talent map and pipeline. Internal talent communities, external networks, employee-generated content, and targeted communications that promote the IMO are proven ways to staff for the future.
2. "Never give up the ship"
There is no doubt that my integration family is always part of the equation when it comes to work/life balance. And because of this, I ardently protect my budgets and headcount. My greatest appeal to you is to do the very same.
There was a point in my career when I grew an IMO from an individual contributor role to a team of four. The company I was with hit a rough patch and all teams were asked to decrease headcount. I told my boss, the CFO, that I could do that only when he made me part of the approval committee for every transaction going forward.
He said he could not do that under board confidentiality.
My reply to him was simply, "What is the opportunity cost of a failed $2.92 billion acquisition compared to the salary of $130,000 for one of my workstream leads?"
As I write this tenet, I am having tingles of post-traumatic stress from budget engagements when I was too young and naive to fight hard for my team. Please do not let your future five years from now be a regrettable view of how you should have protected your team's growth.
3. Create a CoE that rivals the best portals in the world
Personally, I think this is a low-hanging task that many IMO leaders miss. If I had a decision to make about spending a weekend building my M&A Integration Center of Excellent (CoE) or a round of golf, well, let's say it would be a super hard decision but eventually I will fold into building the CoE.
And the simplest rationale is that I will get economies of scale from the CoE.
Let's see a few examples of how:
- Your CoE will become the central repository for all company-wide Integration playbooks (benefit: the self-serviceability of your CoE will save you countless hours of emailing templates)
- Your CoE will house the necessary dashboards for integration project progress (benefit: send your SteerCo to the dashboard on a weekly basis so they can keep current without bothering you for status)
- Your CoE will generate inherent cultural value (benefit: as the archive and repository for much of what happens in and around Integration, your teams will keep all their working files in the portal so it is less work for you to collect them at the end)
Most of us can use Microsoft Teams or Google Workspace to build a sufficient portal. Portal software is not expensive.
In an informal survey run with many of DealRoom's customers, the time savings associated with not having to reply to redundant template requests, dashboard updates, and missing files amounts to 20+ hours a month.
Turning the corner to 2023 is a much-needed reprieve for many. Turning the clock forward to 2028 should not be a painful look back on what could have happened. Rather, employing the right moves today can set up your IMO for longevity. All signals show that M&A activity will continue to occur (and in some sectors M&A activity will accelerate).
Seven IMOs and many years later, I look back at some successes and some regrets. But the one regret I do not have is finishing graduate school. Peering through my crystal ball today is not a premonition by any definition. Yet without the magical orb, we rely on what we know.
I am confident you can put each of these three tenets listed above in flight before the end of the year.
Now is the time for reflection and evaluation of past success to prepare for the next phase of your IMO.
A few questions to get started – How well did you create a results-driven culture? What were the best practices that shone bright, how will you ensure repeatability? What roles emerged as critical and core to the integration effectiveness? Why do you believe your IMO is prepared to meet the toughest challenges ahead? What is the greatest risk ahead, are you prepared?
You must make a choice to build your IMO for the future. Our global economy will come out of its downturn soon enough. Prepare your IMO to meet the pace of transactions during the upturn.
How to Build and Grow an IMO Function (Podcast)
How to Stand Up an IMO (Podcast)
This article was written by John Morada, COO at M&A Science and Margie Thomas, Managing Director, Technology Sector at Auctus Search Partners, LLC.
John Morada is a 17-year veteran in corporate development. He sees the change happening in the M&A community which he feels is a timely expansion and extension of the field. He is passionate about growing the M&A community so the next generation will bring better practices that can be shared with others.