Insights from the merger integration

The company called on Kearney to work side by side with integration leaders to execute the overall global merger. Our work spanned the entire integration, from planning and execution to value-capture and design of the leadership structure for each business unit (BU) and function.

Planning and execution

IMO light. We decided to establish a “light but robust” integration management office (IMO). The concept allowed us to stay sufficiently small and flexible to coordinate globally in all time zones. A good IMO enables the merger process; it is not the end goal.
Create a culture map. Combining two different corporate cultures is almost always a struggle. “Culture mapping” helped to identify potential roadblocks to the integration, which were addressed immediately, and highlighted the similarities, which were promoted to build goodwill. The approach was useful for building and maintaining momentum throughout the integration.
Communicate, even when nothing is happening. Communication is pivotal to mergers. All internal and external stakeholders must have all the information they need at all times. Even when important decisions are not ready for prime time, keep communications flowing by focusing on progress, people, and next steps.

Value capture

Focus on value and speed. Determining synergy goals can be tricky. You want to maximize synergy targets, but doing so often requires overcoming opposition at the local levels. Joint and diverse value-capture teams help find the balance while continuing to design an organization for long-term value creation.
“Acid test” the numbers. Get the CFO involved early in the synergy-review process to validate the numbers before they are confirmed to the market or baked into financial plans.

Leadership

Own the challenge. Assigning all BU and functional leadership positions and their teams early, ideally within 90 days, accelerates an organizational design that puts the best people from both organizations into key positions. In this way, managers not only own the challenge—half the battle in conquering it—but also deliver immediate impact.
Go one step beyond. Guided by Kearney, management used the merger as an opportunity to move beyond what either organization could achieve individually, ultimately building an “aspirational” organization structure and governance model that would ensure lasting advantage.

Impact and advantage

“The process was seamless,” said the CEO of the company’s decorative paints group in describing the day 1 integration. Projects were well run, as synergies were tracked and delivered according to plan. After day 1, some targets were stretched to deliver even further savings, and ultimately surpassed the $390 million target. A new organization structure was put in place quickly and top management appointed within a few days of close. And, perhaps most important, the integration was completed within the target 12-month period without a negative impact on revenues or customers.