Mergers and acquisitions: The basics
Categories: complex projects, merger, methods
I was contacted recently by a reader who wanted to know how to best prepare for starting work on a merger project. It wasn’t something she had done before, and while she wasn’t 100% responsible for the work, she wanted to feel a bit more confident going into some of the early discussions, especially around how she could shape the project management work to support the integration efforts.
Here are 5 things I thought she would benefit from starting with.
1. Due diligence
The first stage – at least in this case as the deal wasn’t yet done – should include due diligence. It’s important to know what you are letting yourself in for. As project managers, we don’t necessarily get involved in that. In my experience, it’s an exercise led by the Legal team with input from subject matter experts as required. But it should definitely be on the project plan.
2. Stage gates
I manage a lot of projects quite informally, but a merger wouldn’t be one of them. If you are in this situation, see if your PMO has a template for stage gates and work out what the project lifecycle would look like. Think about what criteria are going to be required to move out of one phase and into another. I would define those criteria so everyone is clear about what they look like and there is general understanding about when the project gets to move on.
3. What to merge
What, exactly, gets merged in a merge? There might be brand assets to redo, websites to redirect, but also teams to merge and processes. There might be IT systems or physical equipment.
What about legal contracts that need updating, or intellectual property? There is a lot to consider, so some project management effort should be put into identifying what actually needs to happen and when it should happen. It’s likely that the integration efforts will take some time, so it’s going to be a staged approach. When you know what needs to happen, you can help business leaders organise that into workstreams or phases that best represent the work.
What does the world look like when the merger has happened? There might be a new vision, different approaches to staffing, new processes. Similar to identifying what needs to change, think about how you will know when you’ve got there. What are the success criteria? How will it feel? How will it work?
That’s a good exercise to identify what the outputs are likely to be, and therefore what work needs to go into making sure those outputs are delivered.
5. Ways of working
Finally, as with all projects, it’s worth thinking about how the project will run. How do you want it to run, and how can you influence how it is run?
Think about stakeholder engagement, what communications are required, how progress and performance will be tracked, what governance is required, what project controls look like… all the normal things. With so many moving parts on a project like this, it’s even more important to make sure everyone knows what is required of them and how they can contribute.
This type of project can be very complex, with a lot of risk attached, especially to do with losing key staff and market reputation. If the project feels big, it might be worth getting in some specialist help from project leaders or consultants who have done similar work before.
What else would you suggest for someone managing a merger or acquisition project? Let me know in the comments!