We all hear the horror stories about the failed M&A deals because of the lack of communication between the corporate development team and the integration team. And there’s also the best practice of corporate development team involving the integration lead early in the process.
But what if you are the integration lead? What can you do to ensure communication and better deal outcomes? Helping us with this question is Johanna Tseng, M&A Integration leader at Coinbase.
“It's so important to marry these two processes (diligence and integration) and get ahead of it so that we can start planning ahead without wearing down founders with redundant questions.” - Johanna Tseng
One of the best things you can do as an integration leader is to have a strong relationship with folks in corporate development. This will give you a good sense of what their priorities are and how fast deals are moving. Have weekly check-ins and try to involve yourself as early as possible to know what's coming down the pipeline.
The perfect time to get involved is when you are about to do a term sheet, and the team is about to submit a memo to the board. Being a part of that conversation and contributing to the planning process of post-deal is crucial.
Earlier than that is not too ideal. A big part of your role is to have a realistic view of what can and can’t be done. Having that too early can be annoying to the corp dev team. Seeing their big vision get stomped very early is not good for the relationship that you want to build.
Being viewed as a thought partner by business leadership is a good thing. So imposing the things that you can bring to the table may not be a good idea.
It all starts with understanding everything about the company. Understand the process, who the stakeholders are, how they make decisions, what works, and what doesn’t work. Then you can bring in your experience and start building the program.
The second thing you want to do is socialize it and get buy-in from the leadership team. Documents and policies are all going to be useless, but no one wants to do it, and no one believes in it.
Ang lastly, Implementation. Just try it out. It’s always going to be trial and error because every deal is different, and there's always going to be lessons learned. No program is perfect, and you always have to approach it with the right mindset - it's dynamic, it's breathing, and it's continuously improving.
Coming in and imposing your will on everyone will not yield great results. Having a good relationship with everyone in the company will help you get things done faster, so positioning yourself as a thought leader is better.
Every team will operate their roadmap, their priorities, how they trickle down information differently. You need to understand how they work, how they want to approach things, and then collaborate on how you can achieve the goal by using their processes.
There is so much value in building out our integration process pre diligence. It will help you move faster and reduce the number of conversations and documentation that founders have to provide. Redundant conversations frustrated the founders because they still have to run their own business and make a huge decision.
BPM is one of the most effective structures you can use:
This will serve as your North Star and will help keep people aligned around the deal objectives.
An effective integration approach can definitely affect the outcome of your deals. The key is to have a strong relationship with the corp dev, which will enable you to plan early in the process. A good relationship with the different functional teams is also essential to keep communications open and keep everyone aligned about the deal objective.