Delivering engagement in integration webinar Thursday 3 September 2020 presented by Jon Burke The link to the write up page and resources of this webinar: https://www.apm.org.uk/news/delivering-engagement-in-integration-webinar/

1. Delivering Engagement in Integration
Jon Burke
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Background and Experience
§ Marketing, commercial management and acquisition integration
§ Industries include: Engineering, Security and Access Control, Industrial technology,
Distribution, Consumer durables: Smart technology
§ Listed, privately owned and PE-backed businesses, with turnover from £100m+ to
£6bn, UK/ EMEA/ N. America
§ Consolidation and transition of up to 24 businesses across multiple sectors
§ Identification of acquisition targets and development of commercial justification
§ Consolidation of commercial teams to minimise cannibalisation and maximise
commercial effectiveness – generating measurable profit growth
§ Development of acquisition integration playbook

3. Survey Question 1
Yes
No
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Have you been involved in Business Integration?

4. Survey Question 2
Yes
No
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Would you regard the integration as a success?

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Why do acquisition integrations fail?
§ Poor Integration Process
§ Cultural Integration Issues
§ Limited Owner Involvement
§ Mis-valuation / Overpaying
§ Large Required Capacity
§ High Recovery Costs
§ Negotiation Errors
§ External Factors
Over 12 surveys in the last 2 years put the range of failure rates between 55 – 90%. Average of industry
figures indicates 65% failure rate

6. 6
Key Integration Objectives
Build on established processes and capabilities to design and implement an integration strategy and programme that
delivers on deal rationale
§ Achieve all statutory and critical actions ready for Day 1 (Transaction Close)
§ Ensure that the new combined business continues to run effectively from Day 1
§ Mitigate all risks, including disruption and distraction from business-as-usual, through rigorous integration planning
§ Setup and run a structured and well-resourced integration programme focused on:
§ Building on the best of both businesses, engaging ‘hearts and minds’, as well as assets
§ Delivering expected deal synergies and other deal objectives
§ Delivering functional alignment / integration to ensure that any agreed changes to the way the business is run
occurs in a planned and effective manner
§ Staying within the agreed cost/time brief
§ Recognising the importance of people as central to the success of any changes we choose to implement

7. 7
Integration Management Office (IMO) Overview
1. Pre-Planning
Objectives:
§ Finalize all core integration planning
requirements & direction
Engaged Personnel:
§ Senior leadership team
§ GPMIP engagement lead
Inputs:
§ Deal thesis, target operating model, diligence
information, executive input
Outputs:
§ Briefing deck for IMO kick off
2. IMO Kick Off
Objectives:
§ Mobilize all IMO participants and begin
integration plan development
Engaged Personnel:
§ Senior leadership team
§ Functional leads
§ GPMIP engagement team
Inputs:
§ Briefing deck
Outputs:
§ Instructions and next steps for plan
development and project management
3. Plan Development
Objectives:
§ Prepare Day 1 communications and functional
integration plans
Engaged Personnel:
§ Senior leadership team
§ Functional leads
§ GPMIP engagement team
Inputs:
§ Briefing deck
§ Target functional data
Outputs:
§ Day 1 Communications and Year 1 Functional
plans & Integration Roadmap
4. Execution
Objectives:
§ Post close execution
Engaged Personnel:
§ Senior leadership team
§ Functional leads
§ GPMIP engagement team
Inputs:
§ All planning elements
Outputs:
§ Initiative completion
§ Issue & risk escalation & mitigation
§ Post close communication updates
§ Transition to BAU
Have in place a consistent process from agreement to purchase through to execution – first 100 days
and beyond

8. 8
Health Check Framework
During Phase 1 use an integration health check framework to ensure the programme is aligned to the six key themes that are at the
heart of successful integration (deal execution).
Key objectives:
§ Ensure regulatory compliance is
adhered to
§ Identify key deal value
execution risks
§ Enhance confidence in delivery
& planning
§ Opportunity to resolve
capacity/capability gaps
§ Prioritise any remedial actions
and/or support required
§ Improve eventual business
outcomes
§ Improve team morale
§ Independent challenge to check
that scope, timescales, costs
and benefits are realistic
OBJECTIVES & SCOPE
§ Vision and strategic alignment
§ Business case and assumptions
§ Deal & integration strategy
§ Programme & workstream scoping
§ Delivery complexity & approach
§ Delivery status
§ Readiness for delivery
GOVERNANCE
§ Organisation and governance structures
(e.g. SteerCo, IMO, Workstream levels)
§ Workstream and project definition
§ Key project roles & responsibilities
§ Mandate & delegation of authority
§ Alignment of project & functional
governance
SKILLS & CAPABILITIES
§ Incentives
§ Skills, capabilities and capacity
§ Resource and performance management
§ Training
§ Procurement and supplier management
§ Plans for future capabilities
§ Business readiness
§ Planning for future processes, skills and
structural change
§ Change management challenges
§ Key dependencies
§ Customer issues
§ Technical challenges
§ Appropriate solution(s)
OTHER
§ Benefits realisation management
(synergy validation and delivery)
§ Budgeting and funding to deliver
programme objectives
§ Accounting and financial control
mechanisms (e.g. capex; including
synergies into BAU budgets)
§ Cost and synergy sensitivities
FINANCE
§ Alignment to IMO Processes
§ Planning, reporting, risk/issue & action
management
§ Project methodology
§ Stakeholder and communications
§ Quality management, configuration and
document management
§ Project assurance; lessons learned
PROJECT APPROACH
The health check aims to ensure the integration overall and each workstream is meeting key success
criteria to deliver intended outcomes through successive integration phases

9. 9
Communications & Change Management
Managing noise Orchestrating message delivery
Addressing “What about me?”
distractions
Coordinating information post-
close
Navigating the emotional
response to change
Shaping culture vs. cultural
surprises
Design a change and communications strategy that addresses one of the most pressing concerns, the impact on key stakeholder groups,
notably customers, staff and suppliers. The primary goal is to ensure disruption arising from integration is minimized and a new, combined
team quickly establishes a ‘new normal’
Winning hearts and minds internally, whilst convincing customers and suppliers of the benefits of the new,
combined company:

10. 10
Setting the IMO up for Success:
6 Lessons Learned

11. 11
Lesson 1: Seeking and Delivering Value
Any integration programme, spearheaded by an Integration Management Office (IMO), should be primarily focused on the
identification and delivery of value, and to ensure the new, combined business is set up for success from Day 1. Joint incentivisation
and handover from deal team to integration team is key.
The aims of the IMO should be to ensure that:
• Projects are continuously prioritised according to expected synergies and cost to realise, but also complexity, risk, and available
capabilities to deliver in order to optimise return on project investments
• Projects are set up for success from the start and have clear ownership, accountability, capability & capacity
• Quantifiable benefits are delivered through well planned and high performance project execution to ensure that synergies and other key
deliverables are linked to KPI’s and operational milestones; as well as Integrated into the organisation’s financial and performance
measurement processes
• Projects are consolidated into an overall master plan that facilitates synchronisation across workstreams/projects in terms of impact,
delivery timing and resourcing; with clear, concise Exec reports
• Governance at all levels is appropriate for the complexity being managed at each level, as well as integrated within existing line
management governance and wider change initiatives.
• All IMO processes and services remove, rather than add duplication; and drive efficiencies in delivery. The focus is on the content, rather
than format. The IMO needs to be Execution Ready by Close.
Business
Case
Value capture
-
A
Value creation
Leverage best
practice, cross sell
Valuecreatedfor
shareholders
OpExcellenceto
target
stakeholders
Change the
Rules
Change
portfolio and
increasing
performance
Increase
revenue and/or
margin
Re-engineer
business processes
Release duplicate /
unnecessary assets
Reduce third
Party expenditures
Rationalise suppliersConsolidate
overlapping
operations
One-off Integration
costs
+
Minimise Distraction
Disruption Costs
+
Cultural impact
Integration
Related Costs
Organisational
Efficiency
Procurement Rationalise
Operations
Business
Processes
Transfer
Capabilities
Revenue
Growth
Business
Strategies
Market
Transformation
TYPICAL M&A INTEGRATION
VALUE MODEL

12. 12
Lesson 2: Key Success Factors
Learn the lessons of past integration projects (what worked well, what didn’t and why); and incorporate the wisdom of all
parties central to the successful delivery of integration. From our experience, some of the key success factors include:
Quick Start
Shared Vision
Holistic
Approach
Aspirational
Targets
Built on Trust
Capability
Investment
1
Integrations work best if they are based on a shared vision across the company –
involving all functions and levels.
Speedy mobilisation of the integration team is a proven way to kick off an
integration.
‘Cherry-picking’ usually fails − a holistic approach works and unlocks much more
value. Articulate “value to the business” beyond cost.
The integration programme will drive business change – targets should be
aspirational; but benefits delivery should be from Day 1.
Creating trust (credibility, intimacy, …) is just as important as the right business
design.
Most organisations can enhance both technical and change / project leadership
skills.
Strategy is key, but fast-paced execution is essential. 80-20 approach; do not aim
for perfection in all areas.
2
3
4
5
6
Focus on
Execution
7

13. 13
Lesson 3: Focus on all People-related factors
In addition to practical experience from deals, the industry research over the last 30 years is really clear:
• Most companies identify the right solution; but far fewer succeed in delivering
expected value due to poor implementation (execution)
• 9 out of 10 reasons for this failure are people-related, either:
• Insufficient capabilities and/or capacity in execution (”we’ve done the deal,
it’ll just happen, right?” Wrong. Delivering the Value is far, far harder than
doing the Deal.)
• Issues related to leadership, politics, incentivisation, retention, co-
ordination, clarity of roles and loss of focus of business as usual (linked to
the capacity of key leaders and managers to deal with running the business
and involvement in the integration programme)
6 key areas to focus on to ensure
Integration Readiness
• Vision
• Incentives
• Culture
• Actions
• Resources
• Skills
We should explore the Ingenico
approach to each of these as we identify
the key factors to set up any Ingenico
integration programme for success…

14. Weak PMO
High-performing PMO
Integration PMO
(IMO)
14
Lesson 4: IMO Approach
A weak PMO is reactive and purely process driven. A high-performing PMO is proactive and directly benefits delivery and control, raising standards. An
IMO has to go even further. It requires a greater intensity, pace of delivery and reporting. It is a very robust function, using an additional toolset, and
delivering unique products in the most complex of environments.
Features
§ Reactive
§ Process and function driven
§ Poor benefits management
§ Lack of cross-programme support. e.g. management of
inter-dependencies and strategic risk management
§ Perceived as bureaucratic
Features
In addition to the ‘standard’ high-performing PMO...
§ Is responsible for driving the integration programme - the ‘engine’.
§ Drives an extremely intense, fast pace of integrated planning, reporting
and interdependency management (daily).
§ Delivers significant challenge and support to the workstreams.
§ Enables rapid executive decision making.
§ Generates and owns an additional toolset of products on behalf of the
Integration Programme e.g:
§ Day 1 checklists and ongoing plans
§ Integration strategy and future blueprint
§ Workstream charters and checklists
§ Transitional Service Agreements
Features
§ Proactive
§ Benefits (value) focused
§ Integrated with governance & business,
enabling strategic decision making and risk
management.
§ Supports delivery
§ Engenders continuous improvement

15. 15
Lesson 5: How mature do our IMO Services need to be?
IMO Services have a range of maturity. The skill of the integration team is to assess what is appropriate for the needs of a specific
Integration Programme. The integration team should also assess what is required for all integrations; i.e. the degree of
repeatability/standardisation needed will drive the level of maturity required
IMO Service
Maturity Level
Description
(what does good look like?)
Level 1 -
Awareness of
process
No documented process. Activity is
uncontrolled and works in a reactive manner
Level 2 -
Repeatable
process
Documented process is carried out but not
formalised (ad-hoc, with unpredictable
results)
Level 3 -
Defined
process
Consistent disciplines started, using
repeatable processes supported by
standardised templates and materials.
Level 4 –
Managed
Process
Processes are well defined and applied
consistently in the majority of situations and
managed proactively. Some effort is applied to
assess continuous improvement
opportunities.
Level 5 –
Optimised
Process
Processes are always applied consistently
using best case practice. Regular review of
processes to identify opportunities for
continuous improvement and plans executed
to continually optimise processes.
1. Scoping (Day 1 Readiness / Integration
Workstream Charters)
2. Programme Governance (Simple, Disciplined &
Legally Compliant)
3. Team Mobilisation & Resource Management
4. Cost & Benefit (Financial) Management
5. Virtual Collaboration, Document Control &
Knowledge Management
6. Planning & Dependency Management
7. Progress Reporting & Cost Control
8. Risk & Issue Management
CORE IMO SERVICES HIGH PERFORMANCE IMO SERVICES
9. Detailed Scoping (Project-level Definition)
10. Project Portfolio Prioritisation & Change
Control
11. Contract / Supplier Management
12. Delivery Assurance & Quality Management
13. Project / Programme Management Capability
(deployed into Workstreams)
14. Business Change Management
15. Operating Model Capability
16. IMO Capability Building & Knowledge Transfer
FOCUS IN PRE-CLOSE AND EXECUTION PHASES
ADDITIONAL FOCUS IN EXECUTION PHASE
WHAT IMO SERVICES?

16. 16
Lesson 6: Day 1 Planning Focus
The Integration team should be mapping workstreams to deliver both (1) specific synergies / deal value (high priority projects) and (2)
functional integration. GPMIP use multiple tools to assist clients in Day 1 planning, including detailed Day 1 checklists for every function -
this focuses on the prioritisation of functional integration activity.
Day 1 Planning Priorities:
• Deal Rationale
• Integration Strategy
• Functional Day 1 priorities:
1. Statutory/legal requirements
2. Critical Day 1 Enablers
3. Functional integration priorities
• Workstream Priorities:
1. Project planning to deliver deal value
2. Project planning to deliver functional
integration
3. Project planning to deliver changes
to overall operating model (if
required)
Day 1 Checklist
Status Update:
No. of
actions
No.
complete
No. still to
complete
No.
overdue
(Red)
No. of
actions
No.
complete
No. still to
complete
No.
overdue
(Red)
No. of
actions
No.
complete
No. still to
complete
No.
overdue
(Red)
No. of
Relevant
Actions
No.
complete
No. still to
complete
No. At Risk
(Amber)
No.
overdue
(Red)
TOTAL 9 0 9 0 43 0 43 0 28 1 27 0 2204 1 79 0 0
53
19
407
212
311
355
0
0
0
0
0
0
71
226
0
0
0
1 00
0
0 0 0 0
0 0 0 0
0
2
0 0 0 0
0
0
90
147
99
122
0 00 0 0 0
Nice to Have
14 1 13 0
13 0 13
0
TOTAL
00
0 0 0 0
1 0 1 0 3
246
72
0 0 0
Green 0 0 0 0 0
0 1 0
0 0 0
Marketing Green 0 0 0 0 1
2 0Products Green 0 0 0 0 2 0
Green 0 0 0 0 0
0 0 0 0 0
0.0% Complete
1 0
9 0
0
0 0 6 0 6 0
0 0 0 0
0
Key Day 1 Enabler
9 0 30 0 30
0
0 0 0
0 1 0
0 2 0
2 0 2 0
0
00 0 0 0
1 00 0 0 0
0
0 0 0 0
0 0 0 0
0 19 0
0 0
Property Green 0 0 0
0 0 0 0
Procurement
0 0 0
Green
0
0
0
0
Green 0 0 0 0 2
Comments
0 1 52 00
Green 0 0 0
Green 0 0 0 0
0
0Green 0 0
11-Mar-19
Exec
Overall
Legal
Finance
Customer Service
Green 0 0
Green 0 0
Green
Workstream
Checklist
Developed
Checklist
Agreed
Green
Statutory / Critical
Distribution
HR
Sales
IT
Prog. Man.
Comms 0 0 0
0 0 0 0
0 0 0 0
0 0 0
0
0
0 2 0
0
0 0 0
0 0 0
0 0 0
0 0
00

17. 17
Delivering a future-proof approach
A proven mix of value, execution, and repeatability designed to deliver the deal rationale and mitigate risks
associated with the deal and integration programme.
Activate value Execute rigorously Transfer knowledge
& repeatability
§ Connect integration objectives to business
strategy and deal objectives
§ Prioritise focus and realisation of synergy
goals
§ Maximise acquired human capital
§ Mobilise Integration Management Office (IMO)
§ Implement comprehensive but flexible process
orientation to manage complexity
§ Empower internal expertise
§ Prepare training for Integration Planning and
Execution Essentials to prep internal
integration teams
§ Create Integration Playbook for consistent
planning and execution of future activity

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osmastonassociates.com
jon.burke@osmastonassociates.com