  |
|
| ||||||||||||||||||||||
|
 | ||||
|
|
|
More on "The Whole Deal"
Although every company’s circumstance is different, making a single universal approach impossible, Booz Allen Hamilton has identified 10 critical items, or imperatives, that can help executives keep their M&As on track throughout premerger integration planning — a critical period that we define as starting shortly before the merger is announced and ending just before the effective date of the union. These critical items are discussed in depth in the article “Delivering on the Promise: 10 Merger Imperatives.” The imperatives include charting the right course for the merger by establishing strategic intent, building stakeholder enthusiasm, and promoting internal understanding of the merger’s merit. The imperatives also speak to the actual execution, including creating a detailed design and plan, coalescing as one company, capturing value, energizing the team, maintaining stable operations, closing the deal, recognizing and acting decisively at moments of truth, and knowing when to pass the torch from the integration team to management. Managing these 10 imperatives is no small feat, made all the more challenging since they tend to operate in parallel. Executives will find themselves juggling most of them at the same time; the imperatives cannot simply be checked off the list one at a time, as if at some point management could stop worrying about value capture or stakeholder enthusiasm. Mastering this juggling act is a critical capability for delivering on the promise of a merger. We selected the articles in this book to demonstrate both how far mergers have come since the late 1990s and how you can benefit by what’s been learned. They offer direct, hands-on advice and case studies that highlight these developments. The book is divided into four sections:
Setting the Strategic Direction In addition to “Delivering on the Promise,” the Setting the Strategic Direction section includes “Strategic Due Diligence: A Foundation for M&A Success.” This chapter argues for robust strategic due diligence, which examines whether the benefits identified in financial due diligence are attainable, given variables such as the evolving competitive environment and the risk of meshing two corporate cultures. “Symantec’s Strategy-Based Transformation” charts the transformation of the global software company through acquisitions that brought in new technology, management capabilities, and sales and marketing approaches. “Making Mergers Work: The Critical Role of the CFO,” discusses the growing role of chief financial officers in mergers and explains what they can do to keep the process on track and contribute to its ultimate success. Finally, this section includes an article called “Industry Context Dictates Merger Strategy,” which explores how the dynamics of specific industries influence the outcome of a merger. Executing the Integration The second section of the book, Executing the Integration, has seven chapters. The first is “Strategic Rollups: Overhauling the Multi-Merger Machine,” which shows that a rollup strategy differs from conventional M&A in three fundamental ways: the huge number of transactions involved, the tiny size of most deals, and the boldness of the strategic goal, which is to reinvent the industry. That chapter is followed by “Making Mergers E-merge: Using the Internet to Jump-Start Integration,” which shows how the Internet allows two companies to quickly create a common platform for sharing data, thus facilitating the information sharing needed for strategic decisions. The article describes in detail one of the most successful and visible mergers of modern times — that of British Petroleum and Amoco to create BP. In “Hearts and Minds: The Key to Successful Mergers,” the authors explore what they call the “invisible” drivers of corporate behavior through the integration stage. The first driver is the initial emotional response — the state of mind — of the acquired staff. The second is the degree of alignment among the mind-sets of the people in both organizations. Next up in this section is “The People Factor in Post-Merger Integration,” a chapter that discusses Fred Hassan’s arrival, in May 1997, as CEO of Pharmacia & Upjohn, which was struggling after its 1995 merger. He boosted morale among employees and put the company in a position to grow through further mergers. “Post-Merger Integration: How IBM and Lotus Work Together,” describes how IBM beat expectations and successfully integrated Lotus. In “Managing Procurement through a Merger: Capturing the Value of the Deal,” the authors argue that procurement synergies often approach 50 percent of the total value of all synergies, so careful attention must be paid. What’s more, the merger is a chance to improve sourcing performance and take a more strategic role in the new organization. “The CIO Wears Two Hats: IT’s Role in Post-Merger Integration,” the final chapter in the section, argues that a chief information officer must govern two areas. First, the CIO must oversee the combining of the two IT functions; second, he or she must have a longer view that enables the business strategies of the merged organization. Strategic Alliances The third section focuses on Strategic Alliances and opens with “Strategic Alliances: Smart Alternatives to Mergers and Acquisitions?” As the title implies, the story discusses the way alliances can help companies gain capabilities and constantly renew and extend their competitive position. Next up is “Virtual Scale: Punch above Your Weight.” Through carefully structured alliances, this chapter posits, organizations can combine mutual assets and capabilities to gain the benefits of scale that they would be unable to achieve alone, driving corporate growth and value. Our profile “STMicroelectronics: The Metaphysics of a Metanational Pioneer” explores how the company emerged from an inauspicious 1987 merger to become a “metanational” corporation, able to tap hidden pockets of innovation, technology, and market knowledge around the world. Cross-Border M&A Leading off the fourth and last section of the book, which focuses specifically on Cross-Border M&A, is “The Dilemma Doctors: Fons Trompenaars and Charles Hampden-Turner on Cross-Cultural Integration,” a story about two of the most prominent figures focusing on cultural diversity and leadership in business today. Their approach to dilemmas can be extremely helpful for leaders seeking to integrate corporate cultures or attitudes, especially after mergers that cross national boundaries. “The Dilemma Doctors” is followed by “Skoda Leaps to Market,” which examines Volkswagen’s successful 1991 acquisition of the Czech automaker — and how it is now on the verge of becoming a powerful global brand. “Tandem or Solo: Selecting an Ownership Approach in China” argues that joint ventures in China book summary posted May 2007 Related Links...
|
|
Home | About Booz Allen | Consulting | Consulting Services | Ideas & Insights | Contracts | News & Media | Careers Copyright 2008 Booz Allen Hamilton Inc. | All Rights Reserved | Legal Notice & Privacy Policy | Site Map | Contact Us |