Name
Integrum Presenters
April 7, 2015
IntegrumCorporate Integration Specialists
Company Name
Agenda
Introducing Integrum
Our approach to integration
Integrum qualifications
Introducing Integrum
Integrum helps to integrate businesses undergoing significant
change
A firm of experienced managers
With a passion for people and development of human capital
And a proven track record of successful implementation
Our FirmOur Clients
Businesses going through significant change such as M & A and restructuring
Have significant investment in human capital
Understand the issues of implementation
Research shows many M&A’s suffer poor post-completion performance
Create the vision
Do the deal
Align Leadership
Communicate
Implement
Plan Integration
Minority of M&A deals create shareholder valueMost at best neutral - many value destroying
83% correlation between implementation success and overall acquisition success
Majority of mergers are driven by fit rather than vision
Only 50% of mergers succeed in delivering their intended value
Human capital is ignored. 2/3 top management team leave within 5 years of mergers
Most companies admit their communication is inadequate and fail to get employee commitment for integration
Only 1 in 5 acquirers appear to have devised a clear implementation plan
Restructuring programmes often fail
Loss of key human capital
Customer alienation
Erosion of core values and organisation identity
The impact is greater in organisations where people are the principal asset
Assets
Financials…………………….
Brand………………………….
Goodwill………………………
People………………………..
Shareholder value…………...
TOTAL……………………..
Liabilities
Competitors…………………..
Head-hunters………………...
Absentee levels……………...
Costs of recruitment…………
Reduced Productivity……….
TOTAL……………………..
Why implementations fail
Inadequate planning
Culture ignored
Own agenda / self preservation
Integration manager has a day job
No ownership / Leadership vacuum
Poor communication
No process or methodology
No early win / Loss of momentum
Our approach to integration
Maximise Maximise shareholder shareholder
valuevalue
Programme ManagementProgramme Management
ProductsProducts CustomersCustomers ProcessesProcessesCultureCulture Human CapitalHuman Capital CommunicationCommunication
Integrum’s approach to integration
Programme ManagementProgramme ManagementMaximise Maximise shareholder shareholder
valuevalue
CultureCulture
Programme ManagementProgramme Management
Human Human CapitalCapital
CommsComms
ProductProduct CustomerCustomer ProcessProcess
Programme management acts as the “glue” in bringing about change
MonitoringMonitoring
Baseline performance metrics
Identify early win opportunities
Organisational temperature reading
CommunicationCommunication
Message, posters, literature Educate and share learning Role for CEO
Townhalls, walkabouts Feedback for ideas /
frustrations
ManagementManagement
Coordinate campaigns and change activities
Focal point for programme communication
Day-to-day issue management
Change implementationChange implementation
Coach / facilitate campaigns Create change events Workshops Leadership coaching Support opinion formers Develop appropriate tools Recognise / celebrate success
Programme Programme ManagementManagement
OfficeOffice
We manage the programme in a collaborative style
Integrum’s ContributionIntegrum’s Contribution
Integration expertise
Experienced integration managers
Overall strategic perspective
Collaborative style
Coaching and skills transfer
Client’s ContributionClient’s Contribution
Understanding of strategy and objectives
Willingness to invest in strong leadership
Commitment to drive implementation
Experience from previous initiatives
Knowledge of organisation and data
Joint client-Integrum teamJoint client-Integrum team
Increased client integration capabilityIncreased client integration capability
Client ownership of implementation solutions Client ownership of implementation solutions
Integrum’s approach to integration
Cultural AlignmentCultural AlignmentMaximise Maximise shareholder shareholder
valuevalue
CultureCulture
Programme ManagementProgramme Management
Human Human CapitalCapital
CommsComms
ProductProduct CustomerCustomer ProcessProcess
Cultural AlignmentCultural Alignment
Understanding of cultural similarities and difference Distinctive features of organisational behaviour – core values and vision Organisational structure - hindrance or help? Office environment Cross fertilisation of staff/ideas Assimilation of new entrants
Key Deliverables
Assess culture
Conduct audit/ fitIdentify icons/ champions
Change culture
Empower cultural change agentsCreate feedback loop
Implementation Steps
Define Integrated culture
Design ‘combined’ culturePlan culture change
Different cultures in organisations are assessed through a culture matrix
TaskOrientation
Relationship Orientation
45
22
022 45
Admin
HR
Client relationship managemen
t
SalesProduct
Development
Finance/actuarial
Compliance
Investment Management
IT
Marketing
Example
Linking strategy with culture
Diagnostic Implementation
Establish working groups to define future
culture
Continue cultural thermometer check
Continue objective buy in and cultural change programme
Cultural / organisation
Objectives/ strategy
Workshop to clarify strategy if necessary
Aligning cultures is fundamental to integration success
Integrum’s experience has shown Culture must be assessed together with organisation
vision and strategic objectives
There is a mixture of cultures across organisations, with many distinctive features that can help or hinder integration
Aligned leadership is pre-requisite to communicating the vision and fostering the core values of the new organisation
Culture change programmes can only be sustained through effective implementation of human capital and communication strategies
Integrum’s approach to integration
Human CapitalHuman CapitalMaximise Maximise shareholder shareholder
valuevalue
Programme ManagementProgramme Management
Human Human CapitalCapital
CommsComms
ProductProduct CustomerCustomer ProcessProcess
CultureCulture
Managing Human CapitalManaging Human Capital
Assess human capital
Reporting structureValue chainStaff appraisalsSkills gap analysis
Plan integration Structure Staff selection Retention strategy Skill development
Implement change
Align organisationAppointments, retentionTraining HR policies
Implementation Steps
Identification of key human capital in value chain Recommendations on structure/governance Training and skill development plan Three month Integration plan for :
Retention/redeployment/recruitment Alignment of HR policies
Key Deliverables
Integration of human capital - Value chain assessment
Customer Retention
Technical Skills
Leadership
Customer Acquisition
Functional Functional HeadsHeads
Middle Middle ManagementManagement
Technical Technical
StaffStaff
Customer Customer RelationshipsRelationships
Acquisition value of human capital: Acquisition value of human capital: LeadershipLeadershipNew skillsNew skillsNew customersNew customers
Sales Sales StaffStaff
Integration of human capital - Selection and development
Three month integration plan
Identify key Identify key processes going processes going
forwardforward
Identify key people Identify key people from value chain from value chain
analysisanalysis
Objective appraisal programme
Fast-track exit Fast-track exit plan for leaversplan for leavers
Selection of key people
Motivation / retention strategy
Leadership Leadership AnalysisAnalysis Skill Gap analysisSkill Gap analysis
Recruitment / Development plan
Integration of human capital - Aligning HR policies
Three month integration plan (cont)
HR Policies HR Policies Business BBusiness B
HR Policies HR Policies Business ABusiness A
Align to match business strategy
Best practiceBenchmark
Integrum’s approach to integration
CommunicationCommunicationMaximise Maximise shareholder shareholder
valuevalue
Programme ManagementProgramme Management
Human Human CapitalCapital
CommsComms
ProductProduct CustomerCustomer ProcessProcess
CultureCulture
Managing CommunicationManaging Communication
Audit communication
Sources/Channels BarriersBranding
Deliver integration messages
Develop message
Develop formal and informal channels
Distribute
Embed two way communication
Rollout cultural and psychological messagesCreate feedback loops
Implementation Steps
Internal and external communication plan Selection and dissemination of messages
Active distribution for targeted audience Available sources for information
Breakdown of silos through cross-functional activities Feedback loops
Key Deliverables
Communication planning is key
CEO(acquired)
Business Heads
CEO(acquiring)
Functional Heads
All staffKey customer
servicingSales staff Customer
WhereWhenHowMessagePreparation needed - First 24h is crucial
Logistics
Three month communication plan
Three month communication plan
How Communication really works Key Channels (formal and informal) Key Sources (credible and rumours)
Three month communication plan
How Communication really works Key Channels (formal and informal) Key Sources (credible and rumours)
Key messages to put across Global/Functional/Team/Individual
Three month communication plan
Creating a feedback loop
Develop message and Roll out plan
Assess what people really think
Provide feedback
Fine tune messageFine tune message
Integrum’s approach to integration
Product, Customer and Product, Customer and Process IntegrationProcess Integration
Maximise Maximise shareholder shareholder
valuevalue
Programme ManagementProgramme Management
Human Human CapitalCapital
CommsComms
ProductProduct CustomerCustomer ProcessProcess
CultureCulture
Implementing product, customer and Implementing product, customer and process integrationprocess integration
Develop client/ product plan
Review x-functional processes
Establish x- functional teams
Communicate implementation
Implement integration tasks
Pilot / roll-out early wins
Implementation Steps
Cross-functional product and client teams New process workshops Capture of cross-sell and customer relationship opportunities Cultural attributes required to support brand Roll out of client/product plan by product area
Key Deliverables
Integrum’s approach to integration
Monitoring and ReportingMonitoring and ReportingMaximise Maximise shareholder shareholder
valuevalue
Programme ManagementProgramme Management
Human Human CapitalCapital
CommunicCommunicationation
ProductProduct CustomerCustomer ProcessProcess
CultureCulture
Benchmarking - Hard Measures
Thermometer readings
MEASURE Actual Target Delta Comment
ProfitROCERisk ExposureRecruitment costsRelocation CostsRedundancy CostsCost savings run rateCustomer RetentionStaff RetentionAbsentee Levels
Benchmarking - Soft Measures
Thermometer readings
MEASURE Actual Target Delta Comment
Staff moraleDecibel levelCustomer feedbackAnalysts commentsPress coverageEffectiveness of internal communications
Integrum’s Qualifications
What We Bring
EXPERIENCED MANAGEMENT RESOURCE
Integrum - Skills
JOHN SUNDERLAND
BEN DE HALDEVANG
KAYE SQUIRES
Ex chief executive ANZ investment Bank; previously occupied a number of senior executive positions at Barclays and BZW in Europe, Far East and USA. 21 years experience in wholesale and investment banking.
Ex partner of Richmond & Co, with 10 years of executive search experience within the financial services and professional services industries. Ben has spent much of his career in USA, Australia and Switzerland
35 years in corporate and investment banking. Kaye spent the last 10 years working at senior management within Barclays/BZW, where the majority of his work was focused on organisational design and structure globally.
Integrum - Skills
JULIE PERRIN
MASSOUD JANEKEH
JAMES GARTHWAITE
12 years working in strategy and strategic marketing. Julie started her career as a consultant with Bain & Co, before obtaining her MBA from INSEAD. Latterly she was Head of Retail Innovations at Shell, where she introduced customer focussed change
12 years of industry and consulting experience covering strategy, restructuring, project management and cost reduction with ICI, Zeneca and AT Kearney. Massoud is a PhD in Engineering and MBA from Oxford University
11 years in corporate communications with Brunswick as Associate Partner, working with FTSEs and also smaller companies to devise and implement communications programmes. MBA Cranfield, 1992.
Integrum - Skills
JOHAN HATTINGH
RICHARD BARKER
MIKE HARRISON
20 years in merchant and investment banking at Director and MD levels, focusing on treasury, fixed income and derivatives, most recently as Global Head of Capital Markets at ANZ Investment Bank. Previously held senior positions with NatWest, and Hill Samuel
7 years in corporate strategy and planning, within management consultancy and investment banking with ANZ and AT Kearney (Mitchell Madison).
32 years in the insurance underwriting and broking sectors. Ex MD of Sedgwick’s UK Retail Businesses following a period as Group HR Director. In 1999 he led the successful merger of Marsh and Sedgwick’s and was appointed its Chief Administration Officer
IntegrumNon Executive Directors
JIM BEST
MALCOLM LE MAY
CLIFTON MELVIN
IAIN LITTLE
What We Bring
EXPERIENCED MANAGEMENT RESOURCE
KEY INTEGRATION SKILLS
What We Bring
EXPERIENCED MANAGEMENT RESOURCE
KEY INTEGRATION SKILLS
DISCIPLINED PROCESS
What We Bring
EXPERIENCED MANAGEMENT RESOURCE
KEY INTEGRATION SKILLS
DISCIPLINED PROCESS
PROVEN TRACKRECORD
Integrum has a proven experience in integration of financial services firms
Merrill Lynch Cultural audit to assist with retention and motivation of key
people in Research division Design and implementation of improvement plan
ING Barings Management of Charterhouse integration Project management, culture, branding and
communications, HR
…/
Integrum has a proven experience in integration of financial services firms
Groupama UK fund managers implementing new initiatives Review/recommendations on cultural adaptability and
people
WestLB Internal restructure to form new global financial markets
division Brief covers culture, communications, project management
…/
Integrum has a proven experience in integration of financial services firms
HBOS Treasury Services Complete integration of Bank of Scotland and Halifax
Treasuries Project encompassed strategy, programme management,
culture, communications and the appraisal processes Review of sales team capability and customer relationship
management development
EXPERIENCED MANAGEMENT RESOURCE
KEY INTEGRATION SKILLS
DISCIPLINED PROCESS
PROVEN TRACKRECORD
What We Bring
INDEPENDENCE & OBJECTIVITY
A Differentiated Offering
Focus on implementation
Financial Services Specialists
Passion for people
Resources who’ve done it
Success based remuneration
Appendix
Case studiesCase studiesProprietary toolsProprietary toolsProject structure Project structure
Integrum’s approach to integration
Case studiesCase studies
Case study 1 : Integration of two financial institutions
Accelerate development of UK investment banking business Expand product offering of European equities Increase revenues from cross-selling
Merger Objectives
Increased revenues through integrated client management Exploited cross-sell opportunities to expand product offerings Sustained implementation by creating integrated teams Achieved low staff attrition
Delivered key integration objectives in 3 months
Integration Benefits
Case study 2 : Implementation of human capital strategy
Maintain growth and service leadership Get buy-in and commitment to corporate vision and values Create an environment to retain and develop the staff Increase productivity through cross-functional activities
Strategic Objectives
Belief in management and their commitment Better understanding of strategy and vision down the organisation Improved cross-functional relationship Development of a learning culture
Increased productivity and staff morale
Implementation Benefits
Integrum’s approach to integration
Proprietary tools and Proprietary tools and techniquestechniques
Proprietary tools and techniques
Integration Interview Guides Management interview aid Support document to diagnostic questionnaire
Culture Assessment Methodology “How To” guide for cultural assessment Culture change strategies
Integration Programme Management Performance baselining Integration methodology
Publication and Intellectual Capital M&A commentary and expert advice Published articles in business and finance journals
Integrum’s approach to integration
Project structureProject structure
Integration Committee
Integrum Project Manager
Product/Client/Process Teams
Human CapitalTeam
CommunicationTeam
Project Director
Project structure
CultureTeam
Detailed back up slides
Integrum’s Integration MethodologyIntegrum’s Integration Methodology
ImplementationRecommendation
Performance baselining
Cultural fit and integration assessment
Communication planning
Business case
Implementation planning
Programme Management
Cultural Alignment
Clients and Products Integration
Human Capital Management
Communication Management
Case Study 2 : Implementation of human capital strategy
• Major global investment bank
• Significant investment in Human Capital
• Traditionally organised in a rigid structure with many functional silos
• Ad hoc HR policies•No clear career path •Ineffective recruitment, training, performance measure
• Staff turnover an issue
Client Situation
• Developed human capital strategy to address retention, recruitment and development
• Identified systems and communication infra-structural needs for transformation
• Set up cross-functional teams across divisions
• Created mentoring/ coaching scheme for managers
• Developed new reward system
Integrum’s Approach
• Belief in management and their commitment
• Improvement in productivity
• Better understanding of strategy and vision down the organisation
• Improved cross-functional relationship
• Development of a learning culture
• Increased productivity and staff morale
Benefits
We use a number of tools to asses culture. A culture matrix will be used to
map the behaviours….
High
Low High
TaskOrientation
Relationship Orientation
High Task Culture
• Focus on getting the work done at any cost
• High concern for results• Low concern for people
High Performance Culture
• Focus on getting the work done while meeting people’s needs
• Equal concern for people and results
Low Task and Low Relationship Culture
• Ambiguous goals• Concern for self• Low sense of quality
High Relationship Culture
• Focus on social needs• High concern for people• Lower concern for results
We will develop structured interviews to address key integration issues and assess
the fit of the two corporate cultures
Cultural Assessment
General business
Culture
Management processes and style
Personal Aspirations
Communication
• How effectively does the current decision process help you in managing your function?
• How effectively and how quickly are new entrants assimilated into your team?
• What impact do you think implementation of the merger plan will have on the present culture?
• Do you see any personal benefit (or loss) in the merger? How would you mitigate any negative impact?
• Are you satisfied with the communication of the integration process? How do you manage communication with your clients?
• How are strategies set and implemented in the current organisation?
M&A Example
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