episode 

Making Integration Successful from Both Sides of the Deal

Christina Amiry

Steve Elliott

In this webinar, you will learn how to make sure both sides are happy at the end of a deal. Hear lessons learned from Atlassian team members and what practices they applied to integration that created an extremely successful outcome.

Jeff Desroches
VP of Corporate Development at Atlas Copco
Ivan Golubic
Former VP Corporate Development at Goodyear
Erik Levy
Group Head Corp Dev and M&A at DMGT PLC
Kison Patel
CEO at DealRoom

Making Integration Successful from Both Sides of the Deal

4 Jun
with 
Christina Amiry
Steve Elliott
Or Listen On:

Making Integration Successful from Both Sides of the Deal

Making Integration Successful from Both Sides of the Deal

By now it is common knowledge that integration planning should begin early, and integration leads should be part of the deal’s lifecycle, at least from due diligence on. However, integrations still face friction and obstacles in terms of culture and achieving synergies because of a myriad of factors.

Today, we will synthesize and explore five (less discussed) strategies for making integration successful from both sides of the deal based on the open and honest feedback of expert practitioners who have been integral parts of deals that are truly exemplars of integration planning and execution. 

1. Adopt and spread an Agile mindset from the start 

Remaining Agile is a common thread among the practitioners on both sides of the deal. Being Agile is a mindset, and this Agile tone must be set from the early moments of the deal.

How do you transition from a traditional approach to an Agile approach?

Both sides of the table can facilitate this from the onset by focusing on getting the deal done and having honest conversations surrounding the main objectives of the deal; here you are moving forward even though you have not signed on the dotted line, indicating the deal is done.

This not only fosters agility, but also has powerful ripple effects, such as building momentum (you are getting things done and getting them done faster!), as well as building trust and meaningful relationships. The entire deal becomes more aligned with a genuine quality that cannot be replaced. This Agile tone can also be accomplished through setting a cadence of meetings across functions to break down work and show the various functions how they are interdependent. Now teams are consistently being broken out of silos and are regularly assessing progress and tackling obstacles and problems as they appear. 

Additionally, the buy-side specifically should very early on in the deal’s lifecycle complete a compatibility matrix to see where each company is and where they may or may not be aligned. By doing this, the acquirer is isolating and naming key differences between the two companies and is now prepared for the differences and fostering an openness to change. Being ready to adapt makes the acquirer much more Agile. 

Finally, late stage in the deal, not utilizing earnouts is another way to become more Agile and create a culture of agility. Earnouts are not a good Agile strategy because you do not want to be fixed on a goal that is not working. Of course, you want to find ways to hold people accountable and incentivize them, but earnouts are not the best approach since they do not allow you to pivot when the unexpected comes up (we could point to COVID-19 here, for example). 

Ultimately, remaining Agile means you are planning, but not setting things in stone so you can pivot, address problems, and learn. An agile mindset provides you the flexibility to avoid letting one bump in the road become a showstopper. 

2. Focus on the long view

Similarly, and quite related to being Agile, is the recommendation by practitioners to focus on the long view and overarching goals during a deal, specifically integration. For the seller, for instance, this means having conversations early on about the long term goals of the company that the employees have been striving towards and how these goals can continue even after the company is sold.

Furthermore, it also means the seller needs to truly care about his/her people when selling, having conversations and focusing on maximizing the long term rewards for the employees - not just focusing on the employees being okay for the next six months. 

For the acquirer, focusing on the long view often means keeping the integration team on the deal longer (more on this below in #3) in order to analyze and help the acquired company continue to run properly during the integration. This might involve helping scale the acquired company in a healthy way.

For example, perhaps the acquirer is buying a start-up that needs an extra layer of people or support to have business run smoothly. Overall, the long view helps acquisitions grow roots in the new company long term.  In addition, often when focusing on the long view, the acquirer needs to overinvest in the acquisition for the first year, which leads us to our next point….

3. Plan to keep the integration team on the deal longer

The integration team should not plan to automatically exit around the traditional six month marker; rather it should stay on as long as it is adding value to the deal. Throughout this time, the integration team wants to keep a cadence of its meetings and communications.

Also, the team should be the champion of and advocate for the acquired company as it learns the ways of the acquirer and faces challenges related to the transition. This means the integration team should not be bound to a fixed timeline, and it is perfectly valid to have the team stay on the deal for a year or eighteen months. 

4. Use the leadership kick-off play

A leadership kick-off play should be initiated by the buy-side so that the leaders from the acquirer can meet their counterparts in the target. Ideally, this should take place after due diligence; when planning, then, it can be helpful to block off some time. Obviously, the more time for interaction between these two leadership groups (ideally, across all functions) the better.

In the case of the practitioners we learned from, they used a week during which the two sides began to formulate how they would work together, learned what their teams would be like, discussed goals and started to define together what success would look like in each team. This play creates value as it again creates momentum and keeps the deal moving forward, while at the same time protecting a very valuable asset, which is the people that make a business successful. 

5. Leverage tools that foster transparency and open communication

The buyer must create opportunities for open discussion and debate and see value in these conversations. To take the lead on this, the buyer must be sharing information regularly - the more transparent, the better.

Why?

The benefits are abundant. One, open communication and transparency elevates everyone’s thinking and learning. On a more specific level, a company that regularly shares information ensures its employees are not just hearing about their functions, but also learning how their function affects other functions and how other functions affect them.

Two, when information is readily available to everyone, the onboarding process is accelerated as it is easier for the target’s employees to learn processes and people.

Moreover, open communication tends to also generate stronger leaderships. Another practical way for the acquirer to be transparent and open is by having an open term sheet on its public domain so that it is clear about how it operates. 

Certainly tools can help create transparency and open communication since they allow employees to have easy access to information and provide visibility to what others are doing. Additional benefits here are that trust and accountability are also created. Tools such as Atlassian, DealRoom, and Trello can help capture, track, and share work. 

Final thoughts

Moving away from rigid checklists and moving to techniques and best practices can help transform traditional integration to a more successful Agile integration. Agile integration better serves both sides of the deal by creating both momentum and flexibility, and emphasizing the value of relationships and trust between the acquirer and the acquired.

special guests

Christina Amiry
Head of M&A Strategic Operations, Integration at Atlassian
Steve Elliott
Head of Jira Align at Atlassian

special guests

Christina Amiry
Head of M&A Strategic Operations, Integration at Atlassian
Steve Elliott
Head of Jira Align at Atlassian

Hosted by

Kison Patel
episode 

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