Mergers and acquisitions are a means of protecting current revenue as well as driving fresh avenues for it. Companies seeking to manage a merger well need to consider cost synergies. Significant cost savings are the result of proper planning and execution of an expansion or merger. Revenue synergies offer benefits additionally, but these also require a fair degree of attention. Lack of focus can destroy significant value on both accounts. As deals are inked, companies need to have a merger planning process in place. The David Barzilay expansion team works to achieve significant revenue goals post every acquihire, and bridge critical gaps in integration.
Unlocking Value From Mergers
Sales momentum needs to be sustained post the merger. Failure to carry out commercial integration programs causes lost revenue synergies. Growth and value captured post a David Barzilay expansion involves concentrated management focus and a structured program for protecting present revenues and driving future sales. The steps an acquihire should involve to reach the same levels of success as the David Barzilay expansion are as follows.
#1 Presence of an A-level Team
In recent research studies, the importance of commercial integration management is paramount for successful expansion. Revenue synergy goals are attained on account of effective integration management. The central team for integration ensures seamless merger. Integration teams need leaders with complete accountability and full time involvement for duration of effort and appropriate seniority to assess integration strategies. The team should comprise skilled A-level team members who are networked and can devote the time to move the company processes forward.
#2 Validating Deal Models For Realistic Targets
It is critical that acquihiring companies stress test deal models. Artful synergies involve getting the most value out of an M&A deal. Mergers need to be identified effectively as sources of value. Integration team members ensure careful support for revenue synergies and achieve these within a time-frame that is reasonable. Deep understanding and strategic decision making form the core of securing a deal and effective transactions. Deal models need to be understood in their entirety and the acquihire team must focus on understanding strengths and drawbacks or pitfalls.
#3 Effective Risk Mitigation
For creating effective risk mitigation planning, it is essential to set up a deal team which works well within regulatory and legal rules to analyze company data. Antitrust laws, competitive concerns and sensitive information need to be examined with care. Comprising analytic, sales and finance experts, the deal team works for a David Barzilay expansion to facilitate strategic decision making.
Refinement of revenue synergy estimates is important. Customer base churn needs to be assessed by unearthing shared planning impact. Identifying and retaining key talent through an acquihire is what distinguishes a David Barzilay expansion and defines its success. Planning cross-selling and other revenue synergy outcomes, the aim is to ensure seamless accounting and effective analysis.
A comprehensive picture of the deal value and the means of capturing, detecting and resolving conflicts is the key. Commitment is critical for successful commercial integration. Achieving or exceeding revenue synergy goals requires strong leadership involvement from sales to C-suite executives.
#4 Executing Action Plans
Failure to follow through with actions can be hard. You need to work harder to ensure success. Rather than focusing on just the existing targets and priorities and delegating integration planning, the aim should be to take decisions and engage at deeper levels. Establishment of a clear governance structure is important. One needs to review and make decisions based on facts and analysis put together by the integration team. Clarity and strategy in decision making is important.
#5 Protecting Revenue
One of the biggest issues for effective integration management is to follow through and resolve responsibilities for accounts and sales territories to prevent revenue disruption. Teams need to operate with certainty and clarity with respect to leadership, role, target achievement and compensation. For those executives handling the commercial side of the merger, many questions need to be clarified. The expansion team should have the right talent to handle integration complexity.
Two companies merging should study their channels and cycles of sales and communication as well. Critical decisions pertaining to integration need to be assessed carefully along with the degree of customer overlap and plans to protect revenue. You need to be clear about communication strategies to reach out to sales forces and customers, post the acquihire and ensure a culture clash does not come into existence between the acquirer and the acquihired company.
#6 Communication is the Key
A vast number of companies build integration strength through clarity and efficiency in communication. For companies that do not succeed, communication obstacles are generally the roadblock. This is because communicating effectively is the key tool to manage risk during and post the change period. The most effective communications are timely, relevant and clear.
Communication for employees need to address reporting structures, job security, compensation and benefits. There should be transparency and strategic decision making, in collaboration with customer and territorial overlaps, driving front line talent and preventing exits and a consequent fall in sales. Serial acquirers should also repeat and clear communication channels for effective understanding.
#7 Retaining Talent
Nurturing talent is important. Mergers can be tough for sales teams, like top performers if there is lack of job security. Valuable players should include those managing not just the sales, but operations as well. Engaging with individuals is as critical as identifying them. These tactics permit the integration team to respond to employees. Retention, clear communication of roles and incentives for exceptional performance are the key to retaining top talent and ensuring team synergies.
#8 Actively Handle Differences in Processes, Practices and Capabilities
The important principle is addressing differences in capabilities, processes and practices and have an impact on value at risk and stake. Serial successful acquirers excel at integration. Deep understanding of differences and how to value and respect these is the key to successful integration. Different cultures cause confusion about expectations and necessitate the need of a team for defining vocabulary and new performance system metrics.
Essential cultural differences need to be identified through cultural diagnostics involving quantitative and qualitative measures. Culture management practices need to be in place, to ensure autonomy for talent and link it to behaviors and roles. The team also needs to develop a strategy to integrate cultures leading to shared vision for commercial success, cross pollinating leading talent, aligning on performance systems and ensure target setting, compensation, quota and evaluations.