6 Reasons for Hiring (and Not Hiring) M&A Integration Consultants
By GPMIP Partner, Stefan Hofmeyer
Yes, I am a consultant. Through the years I’ve seen the extremes of companies being overly dependent on people like myself. The following are typical reasons for hiring M&A integration consultants, and most importantly, suggestions for when hiring consultants should be avoided.
(1) M&A Integration Expertise Is Lacking
Often there is a gap in knowledge of how to integrate and operationalize an acquisition.
If your company plans to be a serial acquirer, look to develop in-house integration expertise. You may hire expertise through full time recruitment or utilize consultants in a limited manner to train and develop internal team members. If at all possible, retain integration knowledge in-house, tailored to your business.
(2) Internal Teams Have No Bandwidth or Incentives
An acquisition event is time consuming. Internal resources are tasked with both integration and operational work. As incentives typically align with operational work and not the integration, integration tasks often stall.
Where possible, align incentives with integration drivers. If internal expertise is stretched too thin, consider hiring only independent consultants that internal staff can collaborate with and manage at the peer level. This builds internal leadership and expertise while removing the premium that consulting firms charge for senior management overhead.
(3) Internal Teams Are Not at the Right Locations
During integration, face-to-face interaction is a must and may be difficult for internal team members if they are co-located. This challenge is further complicated when acquisitions are cross border and include the addition of languages, cultural barriers, and time zones.
Try to identify and assign local internal team members to the integration team. In addition to local knowledge and cost savings, this develops an integrated organization. If consultants cannot be avoided, strive to bring on talent local to the acquisition. When consultant travel is absolutely necessary, set travel expectations and manage this closely.
(4) Increased Rigor is Required to Drive Results
Often functional resources are put in place to manage integration efforts, these resources are accustomed to ongoing operations and may not be well trained in closing off project tasks efficiently to move the integration project ahead.
Assign internal resources with a project versus operational-based mindset. Project training and project management professional certification can be more effective than operations expertise. Operations resources still do play a critical role, but are not focused on task managing. If sufficient project management resources are not in house, consider more general integration management consultants that can leverage and task manage your internal expert functional teams.
(5) Impartial and Holistic Perspectives Are Needed
With an integration, internal leaders are impacted by changes in their operational roles that may impact their integration decisions or lead to decisions based on narrow perspectives.
Before looking outwardly to consultants, consider re-aligning internal roles to end-to-end responsibilities and engage these roles within the integration team. Engaging internal teams on approaches like Kaizen, that focus on end to end objectives, are of value.
(6) Management Looks to Reduce Integration Risk Exposure
Watch for management looking to defer responsibility and risk to third party consultants. This escalates integration cost and only transfers risk temporarily to consultants who will eventually move on.
Ensure that internal management teams own integration risk. Consultants, if needed, are there to advise and ultimately leave. Where possible, assign internal risk owners and telegraph who owns risk monitoring and mitigation.
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