Delivering Growth During M&A Integration
In this new series, Intralinks has partnered with Danny A. Davis, an expert in post-merger integration (PMI) to discuss PMI learnings from his deals.
25 February 2016
In this new series, Intralinks has partnered with Danny A. Davis, an expert in post-merger integration. Danny is a director, writer and speaker, whose book “M&A Integration: How to Do It. Planning and delivering M&A integration for business success” is used by business schools and companies around the world. In this first installment, Danny discusses post-merger integration learnings from some of his deals.
Nearly all mergers and acquisitions (M&A) are about growth or have some sort of growth component. Most people I speak with have a high-level understanding of the key M&A growth drivers, yet many cannot deliver it. So how can buyers achieve the synergies that drive growth during M&A integration? There are many levers that drive a successful outcome, but there are three simple steps tied to the sales function that are critical:
- Managing sales force consolidation and account management — effectively combining the sales forces and enabling them to work as one team.
- Reconciling compensation plans — money motivates and achieving an equitable plan isn’t always easy.
- Promoting opportunities for cross-selling and upselling without those serving as a distraction to both the sales team and the customer.
Sales Force Consolidation
Combining two unique sales organizations can be a challenging and daunting task. In my experience, the best thing to do is act quickly and decisively, as that ensures that a firm leadership structure is in place. Begin by collecting all pertinent information from both companies, such as the account management structure, organisational charts and reporting schedules, as well as key compensation data.
This information should help you build a plan to ensure that on Day 1 there won’t be two account managers heading off to meet with the same customer. Not only would this make the newly combined organisation look unprofessional, but it could also erode customer confidence in the continuity of service.
The key to sales growth post-merger integration lies with each individual sales person — regardless of the side of the deal, pre-deal — remaining motivated. The sales team is likely to ask:
- Do I still get the bonus for what I sold before the deal was announced?
- Will my bonus stay the same until the deal is closed and new compensation plans have been agreed upon?
If there is a general sense of doubt or uncertainty among the sales force about compensation and pay out timing, there’s a significant risk of attrition.
Maximize Cross-sell and Upsell Opportunities
Alongside all of this, create an intertwined story where the value that each of the formerly separate companies delivers is evident to the customer.
Start by identifying three or four customers who are best suited to either cross-sell the new product or upsell. Help the sales person by providing clear context and details that he or she can easily communicate to the customer. Once you secure your first win, learn from that and target your next opportunity. Creating a success story that supports this combined value proposition is key — and make this happen fast. By creating this success story, you have started to build a virtuous upward spiral of growth.
I hope you find these sales team integration tips useful. I can’t tell you how many people fail to do these three simple things and, as a result, miss their synergy targets and ultimately fail to deliver the expected growth post-deal.
In my next post, I’ll talk about how to mobilise your M&A integration. Stay tuned.
Danny A. Davis
Danny A. Davis is a director, writer and speaker. Throughout his career, his experiences have included pre-deal integration planning on a 50,000 person purchase of a 25,000 person company a $6bn global deal running the European side across 30 countries, 250 business units, 26 functions, training over 100 companies on M&A integration and coaching a global telco through all its deals.