Text Version of the Interview
How to transition to an integration leader?
You tend to see in the market when you talk to other practitioners that they don't jump right out of school and become integration leaders. They take a path that is in parallel to become integration lead.
I meet a lot of HR folks who are just passionate about the change management component of integration. And that's critical, especially as we look at people centricity as a core value that we deliver at post-close.
We also have folks in finance who spend time working on an acquisition doing work pre-close and then they're also very much passionate about making sure that the investment rationale flows all the way through in terms of financial synergies as well as in financial rationale.
So we find lots of those types of practitioners who come into the field, myself included. I came from the technical side, where I was doing a lot of technical due diligence, allowing me to flow into an integration lead.
One of the triggering points was when my manager noticed that I was adept at doing all the technical due diligence while having good people skills. So he mentored me to improve my people skills, which allowed me to become an integration lead.
Roles Easiest to Transition from
Typically, if you have people responsibility and budgetary responsibility, that tends to be an easier migration into integration lead role.
In integration, we have to run budgets. We borrow other people's time in many ways, but we also have a budget we have to stick to. So if you already have that skill set, it's an easier transition.
There's a people component, and we are managing multiple workstreams. We are working with not only our in-house team as the parent company, but we're also working with the acquired company people. Having a good EQ will help you make sure that all those moving parts move together well.
And in some cases, I will admit there are financial benefits to making sure that we do things well, and those financial components and having a good acumen or on finance will also assist in helping you deliver much more value through the post-integration work or post-merger integration.
One is very organized because you are working with lots of workstreams and juggling a lot.
The second skill is being a great listener. Being in the integration management office, it's good to have a solid, strong framework and know when to listen to people so that if the framework doesn't apply, you're able to adjust and be flexible. Understand where they're coming from as well.
The last skill is having a very good critical thinking mind, which is how to look at problems, find the key critical items causing that problem or issue, and then use those same investigative skills to find solutions around it.
I can't tell you how often I've been in steering committee meetings where they tell me to approach them with every problem that I have, but when I do, they ask me what the solution should be.
So what they really want when you're working with executives in the steering committee is to bring them everything that could be stalling or halting your integration and come up with good ways that they can help you provide an answer or help.
Importance of a dedicated integration leader?
It depends; if you are a series D startup, several hundred million in funding, You've just spun up your corporate development team, you're looking at being acquisitive, that is still fairly early in the game.
So having a dedicated IMO or integration leader probably doesn't make the best sense cause you haven't acquired anything yet. Suppose you plan to be acquisitive, meaning two or three a year. In that case, a corporate development needs to consider having an integration leader in making sure you get the value out of those acquisitions.
Now, if you're a PE-backed mid-cap company and you are looking to be acquisitive as well, definitely start those conversations with an integration leader very early. You want that person ingrained in the culture of the company.
By the way, it doesn't mean you have to find somebody externally to be this integration leader. You could find somebody internally and probably that's the fastest path because they have a network. They have a cultural understanding of the company. They certainly have credibility with other leaders in the company. And that helps accelerate what the IMO means in the organization.
So having that person come in, having them be part of diligence is important to make sure that they are aware of the investment rationale. All those motions make great advancements in helping create much more value for that integration afterward.
Primary Role of an Integration Leader?
Coordinate all of those moving parts to deliver the value from the investment rationale at the end of integration. That is our KPI or OKR in a nutshell. We have to make sure that we manage all those moving parts and govern them in a way that continues to move progress forward.
It's also achieving the right value of that acquisition for our customers. In the old days, when we acquired something, it was usually a compliment to the company's ability to manufacture and have a better supply chain. But in this day and age, in our digital age, it's about driving quick value to our customers.
When do you like to get involved in the deal?
I prefer to be involved after the LOI has been sent out. That way, I can be read in when the intention to acquire is official, and that gives me a good sense that this deal will move forward.
If you're a bit too early, especially if you get word for court development, especially if they're just sourcing things, it's great information to have. It's a great context to have, but I'm not going to go jump into integration planning at that point.
Even if I have in my IMO has a good strong framework, the fact that I will start to think about who I need to pull into this integration who are the workstreams this have to consider is a lot of work.
So I want to wait until the LOI is sent out when I have good confirmation that things are going to move forward. There's confidence from the board that they want to approve this.
However, when creating that investment thesis that leads to LOI, it's also essential to have some input there. So, as integration lead, you need to properly socialize the importance of the IMO to corporate development so they will have an indication of where you fold into those assumptions.
You can go out with them for lunch and just build a relationship. The more they know about what you do, the more they know about your philosophy, the values that you bring your frameworks, the more they can include it in the assumptions.
And that's also the fourth skill that the integration lead needs to have is communication—openly communicating with other teams so that they understand that the IMO works with you shoulder to shoulder all the way through the process.
Evolution of Integration Role
It hasn't changed over the years, and I'd say that the importance of integration has become much more prevalent over the past decade.
As I noted earlier, the role or the skills of the integration lead tend to remain the same. At the core, it's about leading and governing the entire set of workstreams that have to happen at integration. Core to that is communication, organization, leadership, emotional intelligence. So those are fundamentally core skills that you have to have.
Now, will IMOs evolve? Most likely. It used to be a traditional institutional training around integration. But now, there are more flexible ways to do things. There's agility in the way that we can do things. We can apply agile M&A activity into that so that we don't always have to abide by a gated approach.
The market's changed. The industry change. The fast pace of digital is changing a lot of things. So the fact that we can model and change our own frameworks to be more flexible and more fluid is something that IMO is looking at today.
A More Agile Framework
I hardly believe that we will find more of the transition of software development into M&A. I'll take a perfect example. Why do we still call it a workstream lead? Why don't we call it workstream leads? Do we always have to have one person who runs one workstream, let's say for finance or employee engagement? Not necessarily.
Now I'm going to borrow an extreme programming method here, called pair programming, which is you have the designer and the business analyst sitting beside the programmer.
And together, as the programmer is writing the code and showing you what it'll do, the analyst is approving or disapproving it based on the requirement that was written by the customer, which could be an internal team or an external customer.
We should have workstream leads. We should have paired workstream leads. So, for example, if you're running the employee workstream, and you would have somebody in HR or people matters.
But in addition to that, if the acquisition, for example, was to bring in, let's say, 60 to 600 new customer success individuals. You should probably have somebody in your customer's success team be part or be partially a lead as well.
Because there's a huge impact to them bringing in 60 to 600 people, that's where I think we, as the IMO, have to look at all the moving parts, look at the bigger picture, and determine where it is important to have this duality of responsible.
So that then it becomes a much more paired approach to success than just one individual carrying the workload and responsibility and accountability for the success of that one work workstream.
The integration team runs the confirmatory diligence trend.
I think that's a fantastic approach. If you can have a culture that does that, you should go for it. That would be something. In some cases, if you can do that when you're a smaller company and build those habits and build that philosophy in, I think you could have something here.
Do you think every company should set up an IMO?
Flat out answer is no. Depending on the company's maturity, depending on the maturity of your acquisition history, an IMO may or may or may not be required.
If you're a series D company with several hundred million in funding, having an IMO early in the process doesn't make sense. Can you borrow time from others in the business line and put them as part of the IMO? Sure. That happens all the time.
Now, as you get bigger, as you look to acquire more and the complexity of these integrations or acquisitions also evolve, you definitely want to start looking at the formality of an IMO.
That can help you make sure that as you present your thesis to the board, they feel confident that there is support and process to deliver on the value of that acquisition post-close.
So that way, in corporate development, when you're talking to the entire acquisition, you talk to it as a whole, which is everything that you did to get to this point, plus everything that you plan to have after the close.
So the idea is to have a much more holistic approach to acquisition as you mature your own corporate development team, as well as you have mature your own M&A strategy thesis.
What is IMO?
The integration management office is the formal name that we give to the people involved in integration, the governance of the integration, and the reporting of the success of this integration. So think of it as the full breadth of the methodologies encompassed under the integration management office umbrella.
There are individuals in the IMO. One is the indication lead, who, for all intents and purposes, basically defines a framework for how you want to run integration and then starts to get involved in integration planning after the LOI is signed.
We have workstream leads. And in some cases, if you're a large corporation or you have a dedicated IMO team, these workstream leads can be aligned per function.
- You'll have a finance workstream lead.
- You'll have an HR lead.
- You'll have a tech and product lead.
Now in many, many cases, workstream leads are individuals who we borrow from the business line.
- These individuals are big thinkers.
- They have critical thinking skills.
- They have a great network in the company.
- They have credibility in the company.
- They have the time to do it.
And then, below the workstream lead, you don't have a dedicated set of practitioners in integration. We just borrow time from folks in the business line because they're just that close to the activity that has to happen.
And in many cases, what you'll do is you'll pair up somebody from the parent company with the acquired company. And those two together will perform the necessary tasks for the workstream itself.
Advice for Aspiring Integration Leads
My first recommendation is to be the best of what you do. That carries a lot of weight. So if you want to run the finance workstream, be the best at it. Those are all wonderful skills to have because it establishes a baseline of trust of who you are and what you can deliver in terms of the value because you're the expert in your field.
The second one is to think bigger. Think about how this acquisition serves the greater good of the customer and the greater good of the company. Somebody who can communicate is definitely already achieving what an IMO really at the fundamental level is looking to do, creating value for the overall customer and company.
The last item is to think outward. So if you can think outward beyond just yourself and the company, think about how this acquisition actually positions yourself in the overall market, and if you can advocate for that and communicate it. At the most fundamental level, that is also important up at the steering committee.
Future of the integration role
It's going to evolve. We're going to find that the role of integration will start to become more agile, applying more of those software development practices and methods that are a part of the agile principles into mergers and acquisition, notably in integration.
As I noted earlier, many things are changing very, very quickly. There's a lot of fluidity in what's happening. And if you're not able to adjust quickly to those changes, if you're still using standard gated approaches, you'll find that two weeks is already too late to make a change to something.
Ideal Integration Lead
The best possible person to become an integration leader actually comes from the business line more than somebody in the enterprise PMO.
To be a project manager, there's a lot of rigor that you go through to become a certified project manager. And what I found in other project managers that I work with is that they have a very linear perspective of how to run their approach for a project. While that is a skill that is highly appreciated and it's good to have somebody on my team who can do that, I'm also looking at someone who can go above and beyond.
On the other hand, when you have somebody from the business line, this individual already has the expanse of communication and network with other business line lines as well. They know the business and the people they can work with.