ModalMinds Next Generation M&A

ModalMinds Next Generation M&AThe SIM™ Method Webinar

Contents/Agenda

The Problem with M&AThe Next Generation Approach: SIM™

Head – Deal DoctrineShoulders/Heart – Free Will & AdoptionLegs – Tactical and Physical Execution

Response - Action & Accelerators

The Merger & Acquisition failure rate continuously averages 70%

Why the Traditional M&A Model struggles“Deal Jockeys” Set the ToneValuation and Financial Focus ($)Negotiations and Legal

Incomplete View of Deal DynamicsPlanning and costs are disconnected from typical integration lifecycle

The Problem with M&A

Traditional Models still under-estimate the role of “effective integration”

Financial/deal focus leads to 2 major gapsImproper or Incomplete DriversSudden Integration Handoff

Skill-set defeasanceHolistic business overviewTransformative opportunityChange management

The Problem with M&A

These two (2) chasms are consistent barriers to M&A success

Improper or incomplete driversIgnore the role and issues around “NewCo”Deal-driven synergies miss post-close complexity

Sudden integration handoffTransition equates to a toss over the wallSkills and method rely on standard PMO, program management

The Problem with M&A

Where are experienced practitioners falling short?Core ingredients remain the same, but the recipe must be adjusted – timing, quantity, focusCorporate Development remains disconnected from post-close execution – relying on standard program management and PMI-like capabilities

The Problem with M&A

Where are experienced practitioners falling short?Core ingredients remain the same, but the recipe must be adjusted – timing, quantity, focusCorporate Development remains disconnected from post-close execution – relying on standard program management and PMI-like capabilities

The Problem with M&A

M&A success requires a modernized method Strategic Integration Model™ addresses deal execution in a logical structure, based on strategic alignment throughoutThree (3) Layers

Doctrine and dogma of the dealScale of adoptionExecution

The Next Generation Approach

The Problem with M&A - Summary

The Merger & Acquisition failure rate continuously averages 70%Traditional Models still under-estimate the role of “effective integration”Two (2) chasms are consistent barriers to M&A successExperienced practitioners are still falling short

The Merger & Acquisition failure rate continuously averages 70%Traditional Models still under-estimate the role of “effective integration”Two (2) chasms are consistent barriers to M&A successExperienced practitioners are still falling short

Contents/Agenda

The Problem with M&AThe Next Generation Approach: SIM™

Head – Deal DoctrineShoulders/Heart – Free Will & AdoptionLegs – Tactical and Physical Execution

Response - Action & Accelerators

M&A success requires a modernized method Strategic Integration Model™ addresses deal execution in a logical structure, based on strategic alignment throughoutThree (3) Layers

Doctrine and dogma of the dealScale of adoptionExecution

The Next Generation Approach

Strategic Integration Model ™ - The HeadFunction: Defines the doctrine or dogma of the dealComponents1. Strategy2. Structure3. Leadership4. Communication

InterlockLayer 2, Adoption Free WillLayer 3, Execution Program Management…

The Next Generation Approach

Strategic Integration Model ™ - The Shoulders/HeartFunction: Stage and scale adoption of stated deal doctrine

Free will influences each participants’ response in their role

Components1. Scale of adoption to evaluate integration participants2. Awareness – Participants have been notified of the deal3. Assessment – Participants determine their reaction4. Adoption – Actions align with Strategy and Structure

InterlockLayer 1, Doctrine CommunicationsLayer 3, Execution IMO plan and progress is influenced by where key players land and move along the scale

The Next Generation Approach

Strategic Integration Model ™ - The LegsFunction: Physical and tactical execution of the strategy

Including discovery, planning, management and workstreams

Components1. Non-financial discovery and due diligence2. Charter and Playbook development3. Integration Management Office and Plan4. Workstream activities

InterlockLayer 1, Doctrine CommunicationsLayer 2, Adoption Free Will

The Next Generation Approach

M&A success requires a modernized method Strategic Integration Model™ addresses deal execution in a logical structure, based on strategic alignment throughoutThree (3) Layers

Doctrine and dogma of the dealScale of adoptionExecution

The Next Generation Approach - Summary

Contents/Agenda

The Problem with M&AThe Next Generation Approach: SIM™

Head – Deal DoctrineShoulders/Heart – Free Will & AdoptionLegs – Tactical and Physical Execution

Response - Action & Accelerators

Impacting Strategy and StructurePre-Close

Align corporate structure to strategy – Leader Adaptability IndexDefine IMO teams, leaders and incentivesDeliver complete Communication Plan

Post-CloseEstablish 360 Degree Feedback process Execute brand management strategyExecute functional training plan (Continuing Ed)

Actions & Accelerators

Obtaining and Tracking AdoptionPre-Close

Leadership assessment, mid-level coverage Cultural assessment surveyFunctional gap analysis

Post-CloseLeadership evaluation (90d, 120d) Customer/Partner adoption review

Actions & Accelerators

Facilitating ExecutionPre-Close

Ratify workstreams, scope, schedule and budgetDefine Levels of Authority and commitmentEstablish war room and IMO status reporting

Post-CloseExecute reporting and recoveryNewCo Transformation Review (90d)

Actions & Accelerators

Closing the gaps – prescriptive actions and accelerators

The Next Generation Approach

Level Pre-Close Post-Close1 Deal Strategy • Leader Adaptability Index ™

• Communication Plan• IMO Incentive Plan/Funding

• 360 Degree Evaluations• Brand Management Plan• Functional Training Plan (CE)

2 Adoption • Mid-level Leadership Assessment• Cultural Assessment Survey• Functional Gap Analysis

• Leadership Alignment Reviews• Customer Adoption Survey• Partner Adoption Survey

3 Execution • Integration Charter, Playbook & Plan

• Defined Levels of Authority• Establish Integration

Management Office & IMO War Room

• Structured IMO management with clear escalation and recovery paths

• NewCo Transformation Reviews

EVENT DRIVEN TRANSFORMATION. PROVEN LEADERS. MEASURABLE RESULTS.

What Works in the Field

For more information, contact:

ModalMinds info@modalminds.comwww.modalminds.com800.957.0543

Copyright © 2013 ModalMinds, inc. All rights reserved.ModalMinds and its logo are trademarks of ModalMinds,

inc.

M&A Leadership

Strategy Execution

Operational Integration

Business Process Optimization

Technical Architecture & Integration