Developing a Post-Acquisition Strategy - Completion And Beyond

DEVELOPING A POST-ACQUISITION STRATEGY: COMPLETION AND BEYONDCase studies, Concepts, and Debatable Ideas

Kenny OngCNI Holdings Berhad

www.myCNI.com.my www.OOBEY.com

1. The first 100 days

2. In-house systems synergy

3. Staff, Compensation and Benefits

Rewarded vs. Unrewarded M&As

From: “Habits of the busiest acquirers”, Robert Palter and Dev Srinivasan, McKinsey Toronto

1. The First 100 Days

Strategies for M&A

1.Base Retention

2.Share Gain

3.Positioning4.Adjacent Market

5.New Business

GROWTH

“Double-Digit Growth”, Michael Treacy

Post M&A Type 1: Buying Market Share

IntegrationOperating

PricePremium

Buying Market Share

Net Cost per Customer < Direct Acquire

No evidence of previous company

One Kingdom

Pre-integration Blueprint

Slow Trigger, Fast Bulletwww.myCNI.com.my www.OOBEY.com

• Make or Buy?1. It is easier to meet the standards of

competition if you buy an existing player

2. Adjacent acquisitions must remain as a SEPARATE ENTERPRISE

3. Integrate Management Control (systems, technology)

4. Inter-transfer of management talent, knowledge and capability are important

Post M&A Type 2: Invade Adjacent Markets

Post M&A Type 3: Acquire New Business

1. No core advantage to bring in

2. Investors mind-set vs. Managers mind-set

3. Value unlocking via operational improvements

4. Invest in Management/Leadership

5. Premium = Combined value > stand alone

First 100 Days: Conflict Points

1. Leadership style differences

2. Who’s is charge? (Who won?)

3. Organic vs. bureaucratic cultures

4. Open vs. closed communication

5. Decision making speed & style

6. Collegial vs. competitive

7. Structures that don’t match

8. Values incongruence

The First 100 Days

25 50 75 100

Save Star Performers

Revise Strategy/Value Maps

Staffing Plans

Assess HR Value

Re-align Strategy

Coaching/Team Dev

Restructure

Capabilities Audit

Culture Integration

2. In-house systems synergy

Operational Excellence(low cost producer)

Ref: The Discipline of Market Leaders, Michael Treacy & Fred Wiersema; 1995

Product Leadership(best product)

Customer Intimacy(best total solution)

Strategy: Disciplines, Priorities, and KPIs

Operational Excellence

• Competitive price

• Error free, reliable

• Fast (on demand)

• Simple

• Responsive

• Consistent information for all

• Transactional

• 'Once and Done'

• Competitive price

• Error free, reliable

• Fast (on demand)

• Simple

• Responsive

• Consistent information for all

• Transactional

• 'Once and Done'

Customer Intimacy

• Management by Fact

• Easy to do business with

• Have it your way (customization)

• Market segments of one

• Proactive, flexible

• Relationship and consultative selling

• Cross selling

Customer Intimacy

• Management by Fact

• Easy to do business with

• Have it your way (customization)

• Market segments of one

• Proactive, flexible

• Relationship and consultative selling

• Cross selling

Product Leadership

• New, state of the art products or services

• Risk takers

• Meet volatile customer needs

• Fast concept-to- counter

• Never satisfied - obsolete own and competitors' products

• Learning organization

Product Leadership

• New, state of the art products or services

• Risk takers

• Meet volatile customer needs

• Fast concept-to- counter

• Never satisfied - obsolete own and competitors' products

• Learning organization

Strategy: Disciplines, Priorities, and KPIs

Customer Intimacy

Product Leadership

Organization, jobs,skills

Management systems

Information and systems

Culture, values,norms

Each Discipline Requires Different Priorities & Resources

•Central authority, low level of empowerment•High skills at the core of the organization

•Disciplined Teamwork•Process, product- driven•Conformance, 'one size fits all' mindset

• Integrated, low cost transaction systems•The system is the process

•Command and control•Quality management

•Central authority, low level of empowerment•High skills at the core of the organization

•Disciplined Teamwork•Process, product- driven•Conformance, 'one size fits all' mindset

• Integrated, low cost transaction systems•The system is the process

•Command and control•Quality management

Organization, jobs, skills

Management systems

Product Leadership

•Ad hoc, organic and cellular•High skills abound in loose-knit structures

•Concept, future-driven•Experimentation and 'out of the box' mindset

•Person-to-person communications systems•Technologies enabling cooperation

•Rewarding individuals' innovative capacity•Risk and exposure management•Product Life Cycle profitability

Product Leadership

•Ad hoc, organic and cellular•High skills abound in loose-knit structures

•Concept, future-driven•Experimentation and 'out of the box' mindset

•Person-to-person communications systems•Technologies enabling cooperation

•Rewarding individuals' innovative capacity•Risk and exposure management•Product Life Cycle profitability

Management systems

Customer Intimacy

•Empowerment close to point of customer contact•High skills in the field and front-line

•Customer-driven•Variation and 'have it your way' mindset

•Strong customer databases, linking internal and external information

•Strong analytical tools

•Customer equity measures like life time value•Satisfaction and share management•Focus on ‘Share of Wallet’

Customer Intimacy

•Empowerment close to point of customer contact•High skills in the field and front-line

•Customer-driven•Variation and 'have it your way' mindset

•Strong customer databases, linking internal and external information

•Strong analytical tools

•Customer equity measures like life time value•Satisfaction and share management•Focus on ‘Share of Wallet’

Post M&A: 4-Wheels Model

Culture

Business

ObjectiveM&A

Strategy

StructureResources

Leadership

Person

Post M&A : Framework

• Joint-Boards• Org Structure• Job Design• C&B• Policies & procedures• Decision making• Transition/Integration Team• Revise structure to strategy• Process alignments

Structure

1. Share Gain

2. Adjacent Market

3. New Business

• Info and Comm Technology

• Integration Cost Centers• Real Estate• Operating Assets• Procurement*• Combined Cost Savings

KPI• Product lines• Geographic Parking:

Services, Production• Customer Problems

Database• R&D

Resources

1. Share Gain

2. Adjacent Market

3. New Business

Special Note: Procurement

• Prices and Terms of current contracts• Supply market dynamics• Tactics for Supply Purchase• Consolidated spending database• Opportunities to save money• Cutting T.C.O.• Manuals on Negotiation Strategies

Activity Grid to optimize resources

Increase (↑)What are features/

activities/services to increase?

Create (+)What are features/

activities/services to introduce?

Reduce (↓) What are features/

activities/services to reduce?

Eliminate (-)What are features/

activities/services to eliminate?

3. Staff, Compensation and Benefits

• Tone, Speed, Direction, Principles, Requirements

• Post-M&A Roles & Responsibilities

• Geographic role differences

• Decision making processes

• Employee authorities• Communication*• Culture integration

sessions• Buy-in ‘Key Players’

Leadership

1. Share Gain

2. Adjacent Market

3. New Business

Communication: Internal

• What: Significance, Direction• Top Management Roadshows• Website• Web TV (Vlogs)• Employee Conventions, Re-Branding launch• Concrete, Consistent Messages• Generate Enthusiasm, allay Fears• Questions: Workforce merge or separate? Let

go? Role assignments? Compensation?

Communication: External

• Media Interviews• Media Day• Single Face to Market (single proposition)• Customer Communication Organization

(Advantages of M&A)

• Integration-era Incentives

• HR Value: Alignment• HR Value: Capabilities• HR Value: Engagement• Star (‘A’) players• Competency mapping• Culture gaps• Employee views on

new entity

Person

1. Share Gain

2. Adjacent Market

3. New Business

HR: Special Considerations

1. Frontline (Sales) is key in post-M&A

2. Targets for Competitors to poach

3. Communication: Roadshows, Repetition, Emphasis

4. Integration-era Incentives:1. Retaining key people

2. Encourage Cooperation

3. Sharing of Knowledge

4. Cross-selling

5. Temporary Management Structure:1. During transition period

2. Cut thru Red Tape

3. On-the-spot Decisions

4. Priority Access to CEOwww.myCNI.com.my www.OOBEY.com

MBO Standards

A Excellent

B Good

C Average

D Poor

E Useless

MBO Standards

A Excellent

B Good

C Average Good

D Poor

E Useless

MBO Standards

A Excellent Excellent

B Good Very Good

C Average Good

D Poor Not Good

E Useless Commit Suicide

MBO Standards

A Excellent Consistently achieved 4 for 3 quarters

B Very Good Higher than planned results

C Good Achieved Planned Results

D Not Good Did not fully meet planned results

E Commit Suicide

Unacceptable performance

What to Pay?

• Pay for Service

• Pay for Job

• Pay for Performance

• Pay for Competency

Performance and Incentives

1. Internal Equity1. Internal Job Rates

2. Performance differentials

2. External Competitiveness1. External Job Rates - Benchmarking

2. Demand & Supply

What’s the Difference?

• Increment

• Bonus

• Promotion

Compa Ratio Table

Use this if your company: • Pays for Performance, and • Pays for Job rates

Mid-Point = Mid Point of Pay Grade

Grade E2

Min RM2,000

MID RM2,500

Max RM3,000

Compa Ratio Table

< 0.7 ≥0.7 - ≤0.9

>0.9 - <1.1

≥1.1 - ≤1.3

Compa Ratio Table

< 0.7 ≥0.7 - ≤0.9

>0.9 - <1.1

≥1.1 - ≤1.3

Compa Ratio Table

< 0.7 ≥0.7 - ≤0.9

>0.9 - <1.1

≥1.1 - ≤1.3

3 9 7 5% 4 3

Compa Ratio Table

< 0.7 ≥0.7 - ≤0.9

>0.9 - <1.1

≥1.1 - ≤1.3

5 15 12 9 8 7

4 12 9 7 5 3

3 9 7 5% 4 3

2 6 4 2 1 0

1 4 2 0 0 0

Employee Distinction

Group I

(Talent Pool)

Group II

( Potential)

Group III

( Performance)

Group IV

(Counseling)

2 3 4 5

POTENTIAL• Identify

Post M&A: 4-Wheels Model

Culture

Business

ObjectiveM&A

Strategy

StructureResources

Leadership

Person

End Note for Post-M&A

“In the absence of leadership, the people will listen to

whoever speaks”A.J., from the movie “The American President”

Thank You.

soft copy of slides: www.totallyunrelatedrandomanddebatable.

blogspot.com

Developing a Post-Acquisition Strategy - Completion And Beyond

Business

Transcript of Developing a Post-Acquisition Strategy - Completion And Beyond

Beyond Customer Acquisition Opportunities Affiliates Can Bring

Acquisition of 21 December 2020/media/MLT/...2020/12/21 · Acquisition is expected to be accretive with stabilised NPI yield of 4.5% Acquisition will be funded by debt. Upon completion,

Beyond Surveys and Data Mining: Searching for New and … SLAF Completion... · Beyond Surveys and Educational Data Mining in the Learning Sciences Learning Sciences is an inherently

Beyond raw frequency: Incidental vocabulary acquisition in ...vocabulary acquisition often occurs more through written text (Grabe, 2004). Of course, explicit instruction in word meanings

Notice Concerning Completion of Acquisition (Prime Maison ...sekisuihouse-reit.co.jp/file/en-news-f1495f3d802147156b6d89720a3c... · Disclaimer: This translation is for informational

APS London 2016 - Beyond user acquisition - myThings

Life-Cycle and Mission- Driven Acquisition Valuation ... · Tod Levitt. George Mason University C4I & Cyber Center. Topics • DoD acquisition: beyond the horse blanket • Acquisition

Beyond Integrated Weapon System Management- Acquisition · PDF fileAD-A276 791 1993 Executive Research Project RS8A Beyond "Integrated Weapon System Management"-Acquisition in Transition

Marketing Automation - Beyond Customer Acquisition

Attraction, Acquisition and Beyond · Attraction, Acquisition and eyond Drive growth with Consistently Engaging Content Why is Acrolinx a Commitment to Great Content? Your business

Integrated Acquisition Environment FPDS Program Management Office Version 1.3 Completion April 1, 2009.

Beyond Resource Acquisition? Analyzing Chinese-‐backed Projects in Africa, 2002-‐2012

1 HHS’ Federal Acquisition Certification for Project and Program Managers (FAC-P/PM) Program: Now & Beyond Judith L. Button, Departmental Acquisition Career.

Second Language Acquisition: Implications of Web 2.0 · PDF fileSecond Language Acquisition: Implications of Web 2.0 and Beyond _____ Ching-Wen Chang

Acquisition of Shares of Acrelec Group S.A.S. · Acquisition of Shares of Acrelec Group S.A.S. Objectives of the Business Combination 2 OBJECTIVES Advance our business beyond cash

FROM ACQUISITION TO DISPOSAL ... - World BEYOND War

Mobile Marketing and User Acquisition Trends - 2014 and Beyond

APEC Project Completion Report Docs/4007...Use this template for projects selected in 2019 and beyond APEC Project Completion Report Please submit to your APEC Secretariat Program

Beyond The CPU: Defeating Hardware Based RAM Acquisition - First

Nick Duddy - NAC 2017: Beyond SEO: Alternative acquisition tools