Acquirors get excited about the prospect of purchasing a business that will elevate their offering and that will open up new markets. However, this same excitement can contribute to a hectic purchase period wherein the commercial operations of the target will suffer and lose momentum. In some cases this commercial malaise can even affect the acquiring business if a significant proportion of the management’s focus is diverted to the transaction and its demands. To counteract this loss of “secret sauce”, one will need to have a clear plan on how to integrate the commercials of the new business. Here at Scion, we have earmarked 4 actions to take as part of your integration plan to ensure that you don’t dilute your target’s commercial value.
1. Maintain management focus on sales by implementing an IMO
One of the best quotes which we keep top of our minds when approaching any client project is simply: “No sales = no business”. At the end of the day, these entities exist and survive on their ability to generate commerce and any project, no matter how strategic, that takes away from that pursuit needs to be rethought. As such, it is crucial to put in place an integration management office of some kind that can take away the burden from your executives and sales people and be tasked with the daily requirements of the integration project. Of course, your management team and the functional leads need to be involved in the integration journey but their time needs to be valued and their involvement should be limited to the taking of strategic decisions to shape and move the project forward. The daily rigours of project management, updating of tasks and the generation of progress reports are ones to be undertaken by the IMO, whether they be internally sourced or external consultants.
2. Set your sales and marketing people plans early and communicate them effectively
Employees are crucial to making your integration successful. Therefore, the people strategy for your sales and marketing team must be considered and clear. These staff members know your business model inside and out — and, more importantly, are able to sell it to clients — so retaining them and their bespoke knowledge is crucial. There are various structural questions that require consideration prior to deal close: will the new commercial teams from the target be absorbed into your existing structure and development ladder? Do you have any new geographies to integrate that might influence your approach? Does your previous structure need reforming in order to cater to your new client portfolio? If your sales and marketing teams are able to collaborate effectively, the likelihood of integration success will sky-rocket.
3. Decide on the commercial tools required for the combined business and deploy early
One needs to assess the requirements for technology and systems, particularly in relation to client management and the delivery of client services. It is imperative to have a robust, well-organised process to manage the sales funnel and nurture ongoing customer relationships. During the due diligence phase, we advise that the pros and cons of your existing client technology systems are assessed and those of your target, such that you can decide which platforms best fit your NewCo organisation post-acquisition. In many cases, this may require the expertise of a technical external consultant to guide you through the decision-making process, and to ensure there are no historical biases towards your existing systems if they are no longer fit-for-purpose.
4. Understand how the intellectual property acquired elevates your business proposals
Finally, as an acquirer, you must consider how to manage your target’s intellectual property. For a product-centric business, this largely sits within a technical realm. The target’s product must be studied closely during due diligence in order to establish how to build it into your wider technical strategy. If your target runs a services company, you will likely need to set up some form of knowledge database to facilitate sharing expertise across disparate teams as they merge into one. This may also influence how you decide to structure your client teams to ensure maximal collaboration. In some instances, it may be wise to build out a bespoke knowledge-sharing content platform, which in turn could create a new monetized revenue stream within your go-to-market strategy.
Considering your strategy across each of these areas will help you to manage commercial integration with ease, and ensure no critical sales-related wisdom is lost in the often unwieldy process of merging two businesses into one. Reach out to us if you want to discuss this topic further and share your thoughts/comments below.
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