Driving Post-Close Success through IMO Leadership
Sian Romo
Consultant | Vector Advisory Services, LLC
When considering how to set up teams for successful integration, the value of an integration management office (IMO) cannot be overlooked. This importance has been underscored by recent Bain & Company research showing a dramatic reversal in M&A outcomes: while 70% of mergers and acquisitions failed twenty years ago, today close to 70% succeed. This transformation stems largely from companies becoming more sophisticated in their approach to integration and developing dedicated expertise through frequent deal-making. At its core, the IMO ensures a clearly defined integration strategy with an established roadmap that allows for quick decision-making and streamlined resolution processes. During integration, the IMO should coordinate workstreams, facilitate issue resolution, and monitor any risks and dependencies throughout the integration process. As Bain’s research demonstrates, companies that invest in building specialized M&A capabilities and refining their integration methodologies are far more likely to achieve successful outcomes in today’s deal environment.
At Vector Advisory the M&A integration team will work with key stakeholders across both organizations to set up a robust IMO structure and process. This framework ensures integration objectives are achieved, and the value of the transaction is captured across functional work areas. Vector’s IMO structure and process focuses on the following guiding principles:
Strategic Alignment
Vector initiates the strategic alignment process ahead of closing by conducting focused workshops aimed at identifying core integration priorities and defining the key milestones. These priorities and milestones are derived from the anticipated value the transaction seeks to capture with input from Vector’s experienced post-merger integration team. Leveraging these priorities and milestones to inform detailed execution plans, the IMO ensures the integration team focuses on the value-driving priorities that were intended with the combination.
Project Governance
At Vector the IMO is structured to deliver integration expertise and guidance while the functional workstream leads contribute technical insight. This framework enables the leads of functional workstreams to concentrate on advancing integration activities, while the IMO assumes the administrative workload that typically accompanies integration efforts. Through a well-defined framework for planning, execution, and reporting during integration the IMO reduces uncertainty and drives effective change management.
Resource Allocation
Integration efforts require intentional review and allocation of resources to maintain stability for both internal and external stakeholders while accomplishing key milestone deadlines and value capture. By providing a cross-functional lens Vector’s IMO structure proactively identifies resource needs in functional workstreams and can rapidly assist with the decision to reallocate resources based on critical integration priorities.
Risk Management
The IMO must understand when issues and risks require escalation to an executive level, when to delegate decisions to functional workstream leads, and when to make decisions as an executive proxy. Vector’s IMO approach ensures all decisions made at the functional team level are captured both within the integration roadmap as well as weekly reporting to various stakeholder groups. Decisions follow clearly defined escalation pathways and are promptly elevated to the appropriate stakeholders, helping sustain integration momentum and keeping priorities aligned.
Stakeholder Communication
Vector’s IMO provides a robust operating cadence that incorporates regular meetings with key stakeholder groups including functional workstream leads, executive leadership, and private equity sponsors. These meetings are tailored to deliver integration progress updates, escalate risks, provide forums for key decisions required, as well as review upcoming integration priorities. Through this IMO structure Vector promotes consistent communication and facilitates accountability to drive integration priorities forward.
Performance Monitoring
The IMO will meet weekly to review an implementation scorecard that evaluates integration progress by functional workstream. This scorecard is comprised of key metrics including milestone and task completion, degree of integration, and burndown charts. By reviewing integration metrics, the IMO team proactively tracks performance, drives timely achievement of integration priorities, and maximizes value realized throughout the integration process.
Conclusion
A well- structured Integration Management Office (IMO) is paramount to unlocking the full potential value of integration during the immediate post-close period. By defining the integration strategy, mapping a clear execution pathway, and streamlining decision processes, the IMO is pivotal in meeting key integration objectives. At Vector, the IMO structure and process leverages the team’s post-merger integration expertise to reinforce the delivery of the integration’s guiding objectives and enable the full realization of intended value capture.