Text version of interview
Can you briefly explain your experience leading project management for M&A integration?
I spent a little over five years at Oracle leading integration efforts for about 10 acquisitions, and currently I'm assisting on a few acquisition-related projects in my role at VSP.
However, those are a little more limited in scope, mostly from a procurement perspective. When I was at Oracle, I was responsible for all integration efforts that fell within the procure to pay space, which includes suppliers, so migrating supplier data and onboarding suppliers in preparation for transitioning accounts payable and supplier contracts.
From a procurement and expense reporting standpoint, I manage transitioning acquired employees over to new procurement and expense processes, policies, and tools.
I was responsible for transitioning accounts payable from the acquisition company over to the new entity and ensuring proper data retention efforts had been completed.
I also managed the travel space, so transitioning over travel agencies, tools and everything else related to travel booking for the company.
So when it comes to preparing for a communication plan, what are some of the things that you're doing ahead of time?
I'll divide this question out into two, as in developing a communication plan for M&A integration for the organization, if you're starting from scratch, and then how you would customize your communication plan and templates for your specific acquisition.
In creating a communication plan for your organization I recommend that you create a generic communication plan and templates for your communications that you can use to save time and ensure consistent messaging.
That'll ensure that you don't forget messaging that you used on previous acquisitions for the next acquisition.
Also think about what integration milestones are planned and happen in all acquisitions for your company, especially what do employees need to know at each milestone, what's changing for them at this time, and what isn't changing.
Plan to communicate before and after each milestone and also plan to use multiple forms of communication.
Next you'll want to learn what communications acquired companies will be receiving from other teams within your organization, which is really important to ensure that your communications are set at an appropriate cadence and are not repetitive.
Ideally, you're going to have one person or team within your organization. Who's responsible for coordinating all of the internal communication. It truly helps when your messages from all the teams have a consistent look and feel.
With that in mind, you can also plan to combine your messaging with other lines of business, where it makes sense to reduce an overload of communications to employees.
You're going to want to seek to improve your communication plan as you encounter areas where employees are consistently struggling or based off of statistics.
The overall vibe from an employee population can be positive or negative depending on the company's culture and how the acquisition was communicated internally from the acquired company's management.
Lastly, topics of importance are gonna vary a lot by acquisition.
Moving into what to do before developing a communication plan for your individual M&A integration, you'll take your templates and you're going to update them.
It is important to understand how integration changes will impact the employees at this particular acquisition, as it will help you anticipate where differences could cause issues at specific integration milestones.
Set up discovery meetings with the acquired company as quickly as you can. Those are crucial to understanding their unique culture, processes and policies at the company, and will help you build relationships with key individuals who can champion your changes and be that person within the acquired company to help answer questions and maintain a positive outlook on what's happening.
You'll take all of that information that you learned and customize your communication plan that you've prepared ahead of time and all of your templates based on what you learned and go from there.
How do you deal with folks that have a very negative outlook about the whole transaction?
Having those key contacts within the acquired company and identifying those who have a more positive outlook can be key to urging the acquisition to have a more positive outlook. No one's going to listen to anyone from the company that's acquiring as much as someone within their own company may.
You want to start building trust with those employees that have concerns. If you have someone who's particularly outspoken in a negative way, if they have a concern, recognize that they have a valid concern and go back and look into it because it shows that you're listening, and that you recognize that the transition is difficult for them.
How much does the communication plan depend on an organization's culture?
In communications to the employee population, maybe about 20 to 30%.
Ideally you want your templates to have everything you need for the most part, and then make unique aspects of the company's culture or differences that you discover just tweak the verbiage to cover those.
When you're having communications with your integration champions, that's going to vary a lot more.
So I like to use more of a checklist of items that you need to accomplish or things that you need to share with them, and then open up a discussion on how best to accomplish that work.
Can we get into the specific elements that make up a communication plan?
I prefer to visit the acquired company in person, if possible, and go in just after the announcement.
From an integration standpoint, I like to go in preferably before close, but if you can't make that happen immediately after close. When you go in, you're just learning how they run their business and who the key people are.
You're not making any changes, giving recommendations or opinions on how they do things in their company, especially before close. You're just listening. While you're listening, you are going to identify if there's any gaps in their spend authority and/or assigning authority that could cause issues and potentially expose your company to risk after close.
With that information at close, you may want to put it in place a policy. You could put, spend controls or policy changes that address these specific areas, where you found gaps that you want to cover.
That would be an official policy document that has all of the information that they need all in one place. You can build that out as a template and then adjust the threshold and finer details that can be customized based on what you learn for that specific acquisition.
Next, you'll want to set up regular or weekly meetings with your key stakeholders to work through all of the action items that we have to do to accomplish the integration.
Your communication plan is going to include training decks for live trainings. You may also want to build out a series of short on demand videos, which can be helpful after your live training. You'll have a whole array of communications at different milestones.
You can use an HTML template that way your entire company can all have communications that look and feel the same and are on brand with your company.
And then lastly, you can also build out websites or online resources for employees.
How do you most effectively distribute this communication throughout the entire company?
I like to use a combination of communication methods to ensure that you're reaching as many people as possible, and that also covers the different ways that people learn.
You'll want to find out how employees are used to receiving company-wide information, because that can vary a lot depending on the company culture, and play into the company culture and communication methods heavily at the beginning of an integration.
Then you can teach employees about how communication is distributed at your company and slowly get them more accustomed to your standard communication methods and terminology.
Some of the top communication methods that I've used in the past would be email communications to the entire employee base, a top down approach where you use leadership meetings to then distribute the information down to their teams or even emails from top leadership at the acquired company, out to the employee base.
You can host a town hall or all hands meeting and assure that the information is shared there, or you can host live online trainings via WebEx if you're not able to do it in person.
How do you best approach supplier onboarding and what challenges do you typically face there?
We'll start with the challenges with supplier onboarding. One supplier onboarding takes forever and requires a lot of file follow up to ensure it's completed timely.
A lot of companies don't have the cleanest supplier data or it can be difficult to pull the reporting that you need out of their financial systems.
Suppliers don't always cooperate or even respond to communications from an entity or even an individual they're not familiar working with, and people tend to overlook it because it doesn't seem super important until it becomes a payment issue.
Another issue that I've seen with supplier onboarding is ownership. It can be difficult to determine who the owner of that supplier relationship is, since many suppliers are used by more than one business owner.
A lot of times, there's the question of why not have one person or team responsible for the entire supplier onboarding process. And the problem that you run into there is you end up setting up suppliers that you don't need and those suppliers don't respond as easily to someone they're not familiar working with.
From an expediency standpoint it's best for the business owner or the contact that the supplier works with on a regular basis to be the one who reaches out and lets them know that this change is happening and that they need to go through the supplier onboarding process in the first place.
You'll want to get an export of the acquired company supplier information at close, and then you're going to take that list, compare it against your company supplier database, and identify shared suppliers versus new suppliers.
The best way to do that is to compare tax ID because supplier names can be very difficult to ensure that you have the same supplier as their supplier, but you want to ensure that that information is shared in a secure manner. From there, you'll have a list of new suppliers that need to be paid by your company's accounts payable in the near future, but are not currently in your supplier database from there.
You'll also want to narrow it down to which suppliers do you plan on continuing using, going forward. That's a conversation that the supplier owner or the department that manages that supplier relationship at the acquisition needs to get in touch with the corresponding department from your company.
Then, you're going to onboard suppliers through your company's supplier onboarding process.
And then from there you're gonna monitor follow up and escalate as needed.
You'll want to prioritize the strategic suppliers for the acquired company that provide services that are key to their business operations. And those are the ones you want to push through as quickly as possible.
Do you ever have suppliers that, after the acquisition news get out and they realize that now the company's owned by a larger company, all of a sudden want to start increasing prices and changing terms?
It definitely happens, although a lot of them have contracts, so it ends up being more of an issue when you're transitioning from the acquired companies contract over to your company or if you both have relationships with the same supplier and you want those to be integrated into one contract
If there was a vendor that didn't have a long term contract and all of a sudden they escalated their prices quadruple or more?
Hopefully your key suppliers are under contract, but if you did have that situation, if it's a key supplier, unfortunately you're going to kind of have to pay what they need you to pay, and then start looking for a replacement that you can transition to.
What other challenges have you faced with large integrations and how have you overcome them?
Larger acquisitions usually have more mature processes and systems, which is good overall, but it can also make it a little more difficult to integrate.
The timing and complexities of transitioning away from systems where they're using a software versus a more manual system, definitely takes a little more time and it's a little more difficult to handle that part of the integration.
You also have the added work of collecting historical records out of those systems and terminating service with those suppliers. For a larger acquisition, you would need to host more trainings to cover the larger supplier base.
You want to be prepared for more questions and you will also likely have more key contacts to manage.
For a larger acquisition, you're going to have an AP team and expense team of procurement team, maybe a procurement contracts team as well and you'll have to meet with all of them.
More legal entities for a larger acquisition, usually require working around multiple time zones, and if they're international entities, you also have to navigate language differences and differences in government policies.
Have you ever dealt with heavy resistance to do a deal, and if you have, how'd you handle it?
Yes, absolutely. Sometimes it's one particularly difficult individual. Sometimes it's an overall negative outlook from the entire company.
I like to think of it as a challenge when you go in and I want to kind of win over the acquisition leadership and those key contacts as quickly as you can. The message that comes down to the employee base from the leadership makes a huge impact in the.
If you can kind of coach and guide the leadership at the acquisition to be really positive when they're bouncing changes and announcing the acquisition to the company, that's helpful. And then in working with those specific relationships, one-on-one, I try to build myself as, and be the person who helps them navigate integration issues.
You want to give the acquired company team as much of an opportunity you can to determine how and when changes will occur and how they'll be communicated.
There are certain milestones and changes that are non negotiable, but try to be flexible wherever you can, and listen to their advice because they do know their company and how communication will go. Stay positive, but real.
Also, I like to always think about what's in the best interest of the combined company and use that to guide your decision making in terms of an issue. As the integration lead you're often a facilitator between the acquired company and your own company.
And then worst case scenario, you can escalate with the appropriate person or you can get creative with backup solutions.
If you lose a key employee or just completely lose their cooperation, you could bring in a contractor, get access to their systems and then take over pieces of their process using internal resources.
These are some great tips and I really like your view about being flexible and even empathetic with that company that you're integrating.
It's never easy. They have all this integration stuff that they're required to be a part of, the integration deliverables, new systems to learn and new processes that they have to follow cause now, and new policies.
They also have the job that they were doing before the acquisition happened, so it's a little bit different than being hired as a brand new employee, and they all have to learn all the processes together.
They don't have anyone within their existing group that has the answers.
What often goes wrong?
Suppliers don't get onboarded and then they don't get paid, so you're scrambling to onboard them and pay them before the suppliers press off service.
That's a big issue.
Employees, maybe not following processes or policies because they either didn't get the correct communications and you weren't clear, or they didn't listen to the communications.
A lot of times their process is so different from our process that we don't even have a process to migrate them to. Then you're creating a brand new solution to an area of the business that you didn't have before.
The biggest destruction of value comes from key people leaving. What causes key people leave?
Some of the employees might be concerned that their jobs are going away or they might get a transitional offer and they'd prefer to jump ship and go find themselves full time offers somewhere else.
Communication is a huge issue that can cause employees to leave and done well is something that will keep them on board at least for longer.
You can point out all of the opportunities and other areas of the business, where they might expand their career experience if they want to.There's a lot of benefits to employees sticking through an integration, so it is important to communicate that.
What have you done to help bridge those gaps or overcome some of those specific communication problems when you see them?
If the right communication didn't go out at the time that it should have, get it out as soon as you can, and then look to update your templates and your project plans to have a little more forward thinking the next time around, so you don't run into the same issue.
Can you give me an example?
For example, supplier onboarding doesn't seem like it's important or big deal. It seems like you have a ton of time until you forget about it while you're working on other integration items or your regular job. Then, all of a sudden, you didn't get the supplier onboarded.
In one case we had a manual process for onboarding suppliers and there wasn't enough accountability and suppliers just weren't getting set up.
So, we moved to a method where we were assigning each supplier to an individual and we built an in house software solution to help remind people of the tasks that they needed to do and when they needed to do them.
What advice do you have for me on my next acquisition?
Have a good communication plan built out and then be ready for it to go wrong and adjust. Be empathetic, ready to solve problems when they come up and stay positive with the acquisition.
What's the craziest thing you've seen M&A?
In one situation there was no other form of travel in an area, so a company was chartering private helicopters to get back from customer jobs.
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