January 10
M&A Science Live - The Evolution of M&A Functions
August 4, 2022

More often than not, M&A involves go-to-market integration. After all, companies are bought to achieve revenue synergies in new markets. Getting the GTM integration just right should be a top priority. 

In this article, Massimo Malizia, Director of Corporate Development Integration at Cisco Systems, talks about the challenges of go-to-market integration and how to make it more successful.

"Having the right go-to-market plan to achieve revenue strategies is critical and almost always, one of the elements of a successful integration." - Massimo Malizia

Biggest Challenges

There are two major challenges regarding GTM integration: sales team retention and legacy customers.

The sales team will suffer massive disruption if synergies rely on full integration. Firstly, the acquirer will most likely have an account manager. The acquired sales team will have to play a different role inside the larger organization. This overlap often results in a demotion, which also changes their compensation structure. 

In addition, how the sales team sells might also change, depending on the strategy, and they will also have to learn the existing products of the acquiring company. If this transition is not managed well, most of the sales team will leave, taking their expertise.

Another big challenge is integrating legacy customers. These customers might have long contracts to honor, so you have to keep selling and supporting them for a long time using the legacy system. The longer they stay on the legacy system, the slower the integration will be.

It is also in your best interest to keep all of the acquired customers. Sometimes, they don't like the changes you will implement, such as changing their account manager, the route to market, or the product itself. Not to mention, the larger the customer, the more complicated the migration.

Secrets to Success

The biggest mistake people make is only focusing on compensation plans. Employees today care more than just money, so figure out their role in the larger company. Analyze their strengths and try to replicate them.

The key to a successful compensation plan is balance. Find the right combination between the base salary and incentive so employees can get close, if not the same, to their previous compensation. However, having the support of a larger organization may also shorten their sales cycle, which allows them to work less or sell more. Communicate these properly to establish a strong relationship with new people.

Also, socializing the acquisition strategy is a great way to keep people excited about their future in the company. This kind of transparency sends a powerful message that they are a part of the team and everyone is working towards the same goal. 

Biggest lessons learned

Every plan has a direct impact on people.  Try and translate what's on paper into real life. It might be immediate or in the long run, but any changes are guaranteed to impact people's lives. 

Also, ambiguity is not always bad. People have this negative impression of ambiguity, making it look like you don't know what you're doing. But ambiguity is necessary at the beginning, which means you have a high-level view of the objectives and are keeping your options open to the best way to achieve them.

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