After overcoming the immense challenges to deliver your Post Merger Integration program, the moment of truth arrives on Day 1. Throughout the commotion of daily status calls, dashboards, and fire drills surrounding conversion weekend, it is common for programs to misplace their focus on issues other than their integration’s definition of success.
Your Merger’s Success will be defined by:
How well did you take care of your customers?
Have you minimized business impacts?
Did you maintain high quality?
Did you provide transparency for your internal and external customers?
Did you create a controllable and manageable environment?
Were you pro-active in your issue resolutions rather than reactive?
Henry Hartman once famously quoted “Success always comes when preparation meets opportunity." Your Day 1 Post-Merger transition will be no exception to these words of wisdom. Below are 8 essential factors to prepare for Day 1 readiness that have been developed from lessons learned through previous large scale integrations.
1. Strong Leadership: Industry best practice research indicates that successful integrations have well-defined decision makers and escalation paths that clearly map to a set of Day 1 objectives and priorities. Strategically, leadership must maintain focus and communication on the integration success factors while tactically being called to manage conflicting stakeholders and resolution of high severity risks and issues.
2. Clear Accountability: Day 1 presents significant, incremental disruption to "business as usual" routines. Post-Merger best practices indicate that Single Point of Contact interaction models with clear accountability may remove substantial risk from the formation of integration gaps.
3. Quality Focused: "Integration Issues" will guarantee frustrated customers, negative public relations, and demoralized organizational resources. When Day 1 arrives, it will be quickly recognized if the integration has not approached the event with rigorous planning and disciplined execution.
4. Over and Above Customer Service: You never get a second chance to make a first impression. Day 1 is the first day that the new company has an opportunity to introduce themselves to their customers. Unfortunately, customers tend to be highly skeptical of mergers as a consequence of previous deals failing to provide the value and service promised. If integration challenges have limited the delivery of an integration’s scope in its entirety, it is especially important to formulate response and contingency plans.
5. Proactive Controls: Your customers and organization may have set expectations of the merger, but they can be understanding, and even forgiving of the issues that may arise. The strategic differentiator is the way in which the issues are managed and resolved.
Take a data conversion at a Fortune 500 bank’s commercial portfolio for example. An integration file transfer issue resulted in a double debit to some customer accounts. Fortunately, the proper controls were in place to recognize the error, and the bank pro-actively reached out to the customers while simultaneously resolving the issue. The impacted customers were thankful for the pro-active response, turning a high-severity incident into virtually a non-incident. It could be suggested that the response even went as far as spinning a poor customer experience into a positive experience that furthered developed brand trust with the impacted customers.
6. Repeatable and Traceable Processes: The documentation of decisions and project artifacts throughout an integration will prevent a significant amount of time waste, re-work, and risk. Any enterprise executing an acquisition strategy will benefit from the investment in forming repeatable and traceable processes, with a continued focus on incrementally improving their integrations through lessons learned from each acquisition.
7. Data Driven Focus: Once the data has keys to the vehicle, the truth can be easily found in the passenger seat. Well-defined reporting and metrics provide the ability for leadership to make business critical decisions, and volume control undesired noise.
For example, a Financial Services company was experiencing undesirable noise from an elevated volume of issues across a large geographical footprint on Day 1 of their back-office business integration. Impressively, the team was able to map the majority of all reported issues to be occurrences of the same issue, and solve the underlying issue in less than one hour by following this principle.
8. Support Capacity: There are too many fires, and not enough extinguishers in post-merger integrations. This may be most prevalent for Subject Matter Experts, whom are highly constrained through an integration program. It is best practice to have defined interaction and prioritization models for integration critical SMEs in order to ensure that their time is allocated properly to the core priorities of Day 1. Of equal importance is identifying risk in their capacity to manage both their Day 1 Business As Usual, and Post-Merger Integration responsibilities. If this is missed, you can end up in a situation where you are robbing Peter to pay Paul.
An integration that does not invest in the proper resources and prioritization around Day 1 readiness is like the marathon runner that runs 26 miles and quits. Day 1 is the final, and arguably most important .2 miles of your integration marathon.
The average customer attrition rate can double as a result of a merger. This dis-synergy driver can significantly limit the Maximum Synergy Potential (MSP) of your merger. It is key for the new company to get Day 1 right for the customers, brand, and their organization. These 8 essentials do not guarantee integration success, but they do ensure that you are best equipped to manage a successful Day 1 transition.
