One of the major reasons that acquisitions fail is the poor quality or absence of post completion planning. The first three months are crucial as during this period, the staff of both companies are receptive to change, indeed they expect it. I thought I would set out a Six Minute Strategist brief introduction to the 100 Day plan to help you with your planning.
The key actions prior to completion are centered around the preparation of the post completion action plan. This is a statement of the obvious however planning rarely starts until the probability of completion is high and this often only leaves a few days to do this.
Management on both sides should ensure that adequate time is spent prior to the completion of the deal in the preparation of a 100 day plan which is clearly set out.
The specific components must include:
- Specific Objectives
- Specific Responsibilities
- Specific and Measurable Actions
- Budget Associated Capex or Opex
Committees and Panels
The overall plan should be in the hands of a small senior management group from both companies (no more than 5 people) who have over all command and control of the plan. The chair of this committee should be the acquiring company’s CFO and the committee should report directly to the CEO and be prepared to present reports to the full board of the enlarged company
The work of the Committee can be delegated through a panel structure to the appropriate line managers. This can be done on a process, function, product, service or geographical basis or a matrix of some or all of these.
Regular Review Meetings
The Main 100 Day Committee should meet at least weekly. This is not to say that regular daily informal communications should not be the norm. The panels should also meet on a regular basis and have a systematic reporting format for presenting their information and progress to the main Committee.
The are several critical stages to the process which should be clearly identified and understood.
- Prior to Completion
- Immediately (-24 hrs) Prior to Completion
- Immediately (+24 hrs) Post Completion
- The First Week
- The First Month
- The First Three Months
Management should think about these stages as they prepare the 100 day plan and ensure that their timetable is responsive to these milestones.
The capital expenditure and operational expenditure required for the implementation of the plan needs to be clearly identified and budgetted for. This should be in the hands of the acquiring CFO. It is important that the enlarged business has adequate working capital (plus a contingency) to execute the plan. It should not be forgotten that financial requirements may lead to a re-negotiation of the terms of the deal if the target company is found to have significant operational or infrastructural deficiencies which require additional investment.
Apart from the business challenges, the management of people and change is, in my opinion, the greatest challenge. Beware that all staff will be very unsure about what the new organisation means to them but there will be a willingness to accept change if it is communicated clearly and logically. The window for this acceptance is likely to close within the 100 day period and poor communication is likely to see it close much faster than that. In all aspects of the planning, prepare to work hard with your employees to ensure that the process is seen as positive, progressive and fair. Tough decisions, when necessary, must be handled in person and with tact and diplomacy.
Ensure that your HR staff are well versed in the latest local employment regulations and practices and if you don’t have this support it is worth seeking external advice.
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