A Better System to Successfully Integrate Business Acquisitions
I recently wrote a blog highlighting the first differentiator for the webinar I presented for the Association for Corporate Growth (ACG).
To recap, the 3 differentiators are:
- Set expectations and eliminate the drama
- Align the companies so that you have one team and one system to integrate and scale your acquisition
- Avoid the cultural chaos that creates confusion and paralyzes the organization
The webinar was titled "3 Mistakes You Must Avoid to Integrate Your Acquisition Successfully " and during it, I go into the 3 primary differentiators our clients have found that make the difference between an acquisition that fails and one that succeeds. You can access the full webinar here if you would like to listen to it in its entirety.
Let’s take a quick look at the second differentiator - how to align the companies so that you have one team and one system to integrate and scale your business acquisitions.
It is very important that we focus on integrating the companies and systems we use to execute. This is what drives predictable results and gets people up to peak performance in a short period of time. One of our clients, MobilityWorks, got their new locations up to peak performance in just 6 months by doing this. One team, one system is what did that along with the right KPIs and making adjustments quickly when things are off track.
MobilityWorks was able to scale because they were ready and had a system in place with the right drivers to drive the right behavior to get the desired results.
You need a system to drive your desired results that includes a common approach to planning annually and quarterly, driving weekly meetings, and monitoring KPIs. This will get your teams aligned and create the right cadence. You also need common terminology and processes to get everyone on the same page.
One of the things our very successful client, AvidXchange, does is give out Rhythm books to all newly acquired companies and employees so that they can learn the operating system being used, speak the language, ramp up faster and get on board to start contributing right away. We have other clients that require their new employees to go through Rhythm Certification when they onboard to get up to speed quickly.
AvidXchange was able to grow and 2X their business because they planned and were ready to go to work right after their acquisitions.
Here is an overview of the Rhythm System our clients use to get everyone on the same page, to plan, execute and communicate effectively to drive successful integrations.
Create the Right Plan:
The number one reason we see failure following an acquisition is that plans do not get executed. It’s hard enough under normal circumstances, let alone trying to integrate a new company full of new team members. You have 30 or 50 or 100 people enter into your company, and they are not prepared to work on the right things. People live in chaos if they don’t know what to work on and instead spend time on what they think is important, not necessarily what is important to the company and the integration.
Having these plans in place is going to allow us to have effective weekly meetings that help accomplish your 100-day plan and ensure you have a successful first year while meeting your investor and shareholder expectations.
Test the Plan:
After we create our integration plans, we need to make sure the team is not overloaded. This is a very common problem as teams and people tend to take on too much.
You want to test the plan to make sure it has no more than 3-5 priorities (too many priorities and you will get little done). Stephen Covey tells us more than 5 and the quality and completion level suffers.
Keep in mind, everyone has their day job activities in addition to the activities to integrate the new business. And, the faster you are moving, the more you need to communicate.
Manage the Plan:
It is important to develop the right rhythms and cadence with Weekly Adjustment Meetings. All key employees should be in a weekly meeting. It starts with the executive team and cascades down to the next level. This way, all of the key people know what the important initiatives are and what they should be working on. Spend time discussing the items that are off track during their meeting to make the right adjustments or find the right solutions so that you can accomplish them successfully. A good weekly meeting focuses 80% of the time working on solutions rather than statusing or reporting the news.
You don’t have to be the in 50-90% of companies that fail to meet their goals through acquisition if you put the right system in place, create the right plans, and manage the integration and annual plan with effective weekly meetings.
Good luck and look for part 3 in the next few weeks.
Photo Credit: iStock by Getty Images