Corporate development typically involves their integration team a couple of weeks before closing a deal. According to Kerry Perez, Head of Diligence and Integration Management Office (M&A) at AMN Healthcare, there is a real benefit of involving your integration team earlier than the traditional timeline. In this article, she’s going to be helping us understand how to stand up a diligence and integration management office.
“The key is to have a small group of people who can move from integration to integration, who are committed to the sacred nature of integrations and can iterate as you get those lessons learned.” - Kerry Perez
Integration teams rarely receive the complete picture of deals. There are nuances that happen during diligence that don't make it in the diligence memo but are essential for the target company and internal team members. This has prompted AMN to combine diligence and integration into a centralized function to have continuity.
In short, DIMO helps create better diligence output, leading to better integration inputs since the integration team is involved right from the start. This also creates better knowledge retention and improves the overall efficiency of their M&A process.
The key to managing a large team is to divide the people you are talking to down to functional leads. They will represent their respective departments and lead their function during the process. Talking to 30 to 40 people is not very efficient, especially if you do multiple deals simultaneously.
Ideally, your functional leads will serve as your core group involved in every integration, and they will be the ones who have tribal knowledge of your process so you don’t have to reinvent the wheel every time you make an acquisition.
If you want repeatability and scalability, you need to have dedicated people who can pick up the learnings from integration to integration, from diligence to diligence, etc. and be able to just refine your processes.
The DIMO team typically hands off a four-page document to the integration team as they start becoming involved in the deal. Aside from the usual information like the scope of the deal, integration budget, and key decisions made, Kerry pulls up five key things upfront: