Analyst’s introduction to post-merger integration in telecommunications The Change Management challenge “Cultural & people issues present the biggest specific challenges during the post.
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Analyst’s introduction to post-merger integration in telecommunications The Change Management challenge “Cultural & people issues present the biggest specific challenges during the post deal period…” Only 20% of respondents were very well prepared to deal with cultures differences Top post deal challenges Complex integration of two businesses 32% Dealing with different organisation cultures ● 27% ● IT 24% Customer retention 10% 4% Proportion of respondents Source: ▬ Differences in working styles, leadership approach ▬ National culture differences ▬ Behavioural differences 30% People issues Time and management Cultural challenges People Issues ▬ Key members of management team leaving ▬ Employee moral and motivation ▬ Retention of key staff ▬ Consultation with staff and representative bodies KPMG Global M&A survey 2005 …yet two thirds of companies had not placed a great deal of emphasis on addressing people and cultural issues in planning for the post deal period ABCinc’s change management approach ● 9 out of 10 barriers to change are people related ● In all M&A activities – ABCinc consider how we will identify and manage the human impacts of change in order to deliver the business goals and strategy. ● Our change programmes are distinct from, but linked to, the more technical HR elements of M&A such as benefit and job alignments. ● We address both the day 1 issues (systems access, tools etc) and the longer term integration needs of employees. ● Typically our change programmes address: Change management focus ▬ Change definition (what, why, when, how) Business impacts ▬ Change leadership style & capability of ABCinc & the target company ▬ Culture, behaviour & climate Strategy & Business Plan ▬ Communications & engagement ▬ Relationship / stakeholder management ▬ Organisational structures ▬ Skills & capabilities People impacts Technical impacts M&A Integration Practice (M&AIP) – our role The M&AIP is the CoE for integration capability, methodology and skills: ▬ ▬ ▬ ▬ ▬ with an overall priority for the successful delivery of integration projects determining overall integration strategy, methods and approach. engaging in the pre-transaction deal team - integration due diligence, business case refinement, planning and preparation engaging and developing the wider integration community in GS, and wider e.g. ABCinc Retail, ABCinc Design providing Integration Directors team for the integration projects for each acquisition. Transferring integration skills to wider ABCinc community (i.e. Comsat) Pre-transaction Time/resource Allocation Live Projects: 80% ▬ Method and skills: 20% ● ● Post OC engagement ● Focus on integration elements of business case ● Integration DD, BC assumptions and application of historic learning ● Ensure increased integration planning and preparation validation of synergies, integration budget and cost inputs, pre closure communications, change management, integration resource in place and ready. Blueprint philosophy Post-Merger Integration (PMI) ● ID tasked with delivery ● Close monitoring/support in first 12 months ● Ongoing assessment audits of integration project ▬ After 12 months quarterly reviews till close ▬ Key driver is achievement of acquisition business case goals ▬ Support project team ▬ Risk/mitigation strategies M&A Skills & Community ● Standardised methodology – version controlled robust approach ● Consistent and repeatable ● Adaptable to varying business requirements but within common structure ● Minimise risks of diverse approaches to future projects ● Invest our substantial earning ● Central set of integration tools and templates ● Reporting and governance ● Fasttrack to project readiness ● Establish and develop the virtual M&A community within ABCinc ● Ensure Integration expertise and experience I harnessed for continuous improvement ● Identify new integration directors and programme managers ● Maintain resource and skill list for rapid deployment across projects and repeatability benefits ● Thought leadership of M&A integration ● Promote our capabilities to internal/external audiences, supporting ABCinc strategic themes Integration Workshops timeline (during Pre-transaction) ABCinc Kick-off Workshop Joint Integration Kick-off Workshop As soon as possible after Day-1 Between A-Day and Day-1 Joint Integration Agreement Workshop 2-3 weeks after the Joint Integration Kick-off Workshop Synergy Validation Workshop 2-3 weeks after the Joint Integration Agreement Workshop A-Day Day-1 Day-1 + 12 months (e.g.) Pre-transaction Integration Transition Prioritisation Workshop 2-3 weeks after the Synergy Validation Workshop Full Team Rolling Review 2-3 weeks after the Synergy Validation Workshop Workstream Rolling Review 2-3 weeks after the Synergy Validation Workshop BaU Programme information flow Charters Owner **Acquisition Name** - Progress Summary Overall status: PDD’s Assumptions Today's Date is Milestones Risks Resources 7-Dec-06 Status is DRAFT High Level Task Task Owner Milestone RAG or Key Deliverable Complete Comments MARKETING PROCESS, SKILLS & RESOURCING PROCUREMENT CLR HR FINANCE CS&NO SECURITY SYSTEMS INTERNAL COMMS CHANGE MANAGEMENT SAVINGS COST UPLIFT & REVENUE Synergy Tracking INTERLOCK Project Budget PORTFOLIO Assumptions FUNCTIONAL WORKSTREAM Dependencies SALES SYNERGY WORKSTREAM should know Risks Tracking Programme that everyone Dependencies G G G G G BT International G G G Global Business & Services G G G IP Networking G G G Systems & Security G G G Customer Service & Network Operations G G G Human Resources G G G Finance G G G Strategy & Development G G G G G G G G G Marketing Manager Key information G Global Telecom Market Regulatory CRITICAL PATH Lead = Summary HLMP BTGS UK Commercial Legal and All Lead = RESPONSIBILITY G Planning Projects G Overall Workstream Progress vs. milestones Objectives PSG M&A Integration Practice Slide: 2 Key Achievements - Key Risks - Key Issues - - © British Telecommunications plc 2006, All Rights Reserved. The Contents of this Document are confidential to British Telecommunications plc, all non-authorised use is strictly prohibited. Day to Day Driver = primary contact Overall milestones HL0010 S-Day HL0020 A-Day HL0030 Day-1 HL0040 Delivery of ** Acquisition ** 06/07 financials "dd-mmm-yy" HL0050 Delivery of 06/07 revenue synergies Integration Director HL0060 First PSG Integration Director HL0070 Organisational design recommendations Integration Director HL0080 Rebrand complete Integration Director HL0800 Handover to BaU Integration Director HL0900 Three year check For information For information For information CEO Integration Director Integration Lead = Synergies Integration Director Day to Day Driver = Programme Manager 2006/2007 TOTAL BUSINESS CASE SYNERGIES IS0100 Integration Director For Information For Information As captured in the business case Through FY09/10 Checkpoint Revenue: £nn.nM IS0110 Blueprint Vision Network Workstream Lead **Value** Customer Workstream Lead HLMP Update Services IS0120 **Value** Procurement Workstream Lead IS0120 **Value** Etc. Workstream Lead IS0200 Rationale EBITDA: £nn.nM IS0120 **Value** Identifying Deltas to Business Case Synergies Integration Director Capture any ongoing deltas to the (if any) business case IS0210 **Workstream and delta** Workstream Lead IS0220 **Workstream and delta** Workstream Lead TARGET SYNERGIES 06/07 IS0300 Integration Director Revenue: £n.nM IS0310 EBITDA: £n.nM 06/07 Revenue synergies Workstream Lead £0.4M 06/07 EBITDA synergies IS0320 Integration Structure Workstream Lead £0.2M Etc. TOTAL HR & INTEGRATION COSTS IS0400 Integration Director As captured in the business case Through FY09/10 HR costs: £n.nM IS0410 Integration costs: £n.nM HR costs HR Workstream Lead As captured in the business case £n.nM Integration costs Integration Director IS0420 As captured in the business case £n.nM IS0200 Identifying Deltas to Business Case Costs (if any) Action Register Integration Director Capture any ongoing deltas to the business case Issue & Risk Register The Integration − contents & flow First 30 Days and ongoing …. Formal Handover to the Integration Team Integration Process Matrix Impact Next 70 Days & ongoing …. Programme Steering Group (PSG) Last 100 Days Joint Integration Kick-off Workshop Culture Integration Practice Reviews Integration Blueprint Integration Communications Checkpoint Joint Integration Agreement Workshop Synergy Validation Workshop OUC’s and Finance Transition Synergy Tracking & Reporting Change Management HLMP (High Level Milestone Plan) Re-branding Prioritisation Workshop The last 100 days Hygiene Factors for Day-1 Document Register Action Register The Softer Integration Requirements Full Team Rolling Review Other Useful Information Focus during the first 100 Days Governance Issues & Risks Register Motivation, Team Building & Recognition Workstream Rolling Review Quick Wins Programme Reporting Timeline Integration Workshops Timeline Leadership Brochure Blueprint THIS IS ONLY A PARTIAL VIEW OF THE FULL DOCUMENT. THE REMAINING PAGES ARE INTENTIONALLY NOT SHOWN. THEY ARE SHOWN ONLY IN THE MEMBERS DOWNLOAD AREA. ADDITIONAL TEMPLATE PREVIEWS Guides PMI Planning Guidelines Types of Merger Integration Approaches (Hostile vs. Friendly) How To Integrate Acquisitions Well Ways to Integrate - Ver2 7 Deadly Sins The First 100 Days CFO's Role in PMI Merger Communications Plan - Ver1 Merger Communications Plan - Ver2 (No Preview) Managing Receivables Blues Motivating the Teams Managing the Process Integration Tools and Templates Merger Integration Best Practices Integration Initiatives By Functional Area Integration Timeline By Functional Area Integration Approach Kick-Off Presentation PMI Planning & Execution Model Integration Plan Example 1 Integration Plan Example 2 HR Integration Plan Example Overall Merger Integration Plan Sales Force Merger Integration Treasury Department Merger Integration Presentation and Report Charts and Graphics - Big Time Saver! Biotech Merger Integration Plan Telecom Merger Integration Plan New Business, Product, and Startup Ideas MARKET, INDUSTRY, AND COMPANY, RESEARCH