Value capture is, in essence, the end-all, be-all of a company’s life-cycle. Yes, you likely have other motivations for starting your company, but without capturing any value, your company will have a very short lifespan.

When it comes to acquisitions, if you don’t have a good strategy to drive value capture, you’re not only wasting your time, but hobbling your future potential in the process. If you look at some notable examples like Daimler Chrysler and Sprint/Nextel, it’s pretty clear that a bad deal will stick to you for a long time.

You might even end up as a cautionary tale for future M&A executives. No one wants that. Aspire to be the Apple of acquisitions. You can do that by focusing on four distinct levers that drive 80% of value capture.

Four things. They’re not even difficult things.

So in this Process Street post, I give you the rundown of the four levers you need to prioritize during your acquisition, and exactly why they make such an impact:

• Pursuing the ever-elusive value capture
• Lever #1: Utilize your functional teams early in the acquisition process
• Lever #2: Complete your commercial & operational due diligence before closing
• Lever #3: Assess the revenue & cost synergy potential of the deal
• Lever #4: Develop a realistic strategic operating model design

Let’s get to it!
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“Running a business and integrating two companies is like having two different jobs and both are equally important.” – Chris Barbin, CEO, Founder, Entrepreneur

Only one-third of mergers and acquisitions successfully create shareholder value. More often than not, this is down to failures during the post-merger integration (PMI) process. Cari Windt, who specializes in organizational design and change management, pins this on a lack of planning; CEO Christ Barbin claims it’s a lack of execution.

These two problems, however, are not mutually exclusive. Executing a poor plan can be more harmful than not executing a plan at all.

Being aware of the challenges of post-merger integrations and developing a thorough PMI process can both go a long way to ensuring yours runs smoothly. But how do you determine if total integration is right for your organization?

This Process Street post will look at the 4 main post-merger strategies and when you should use them:

• The shape of post-merger integration
• Consolidation post-merger strategy: Gain scale and cost synergy
• Transformation post-merger strategy: Reposition your identity
• Tuck-in post-merger strategy: Tech and talent acquisitions
• Bolt-on post-merger strategy: Increase your portfolio

Let’s dive in!
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“The truth is mistakes happen. The accepted data says that most mergers and acquisitions don’t work out.” – Martin Sikora, professor of management and editor of Mergers & Acquisitions: The Dealmaker’s Journal

Mergers and acquisitions are complicated. Like, really complicated. A simple mistake at any point can delay the deal, derail the process, and potentially cost your company millions.

No matter how highly trained or experienced a person is with M&A procedures, human error happens. In fact, errors are more likely to occur in processes we’re overly familiar with. Once we’ve performed a task so many times that we “know” the steps, we tend to run on autopilot, which means routine actions can be overlooked or forgotten.

Making a mistake during a process with as much risk and expense as a merger or acquisition can ruin one or both companies. This makes having a thorough, well-documented process is an absolute must for any M&A executive.

After analyzing the main reasons mergers fail, I’ve used that knowledge to build several Process Street workflow templates for essential M&A processes. Feel free to jump ahead if you’re looking for a particular template, or continue reading for a walkthrough of all the features these workflows use:

• M&A processes: Plan to plan – and plan again
• M&A Target Search Process
• M&A Strategy Checklist
• M&A Due Diligence Checklist
• M&A Acquisition Checklist
• Post-Merger Integration Checklist
• Process optimization & Automations with Process Street

Ready to acquire some new workflows?
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AOL and Time Warner. Daimler Chrysler. Sprint and Nextel. Quaker Oats and Snapple.

You see where this is going, right?

I admit: the role of Monday morning quarterback is not very challenging – particularly in these four cases. If nothing else, they serve as a prime reminder that even the highest flyers can – and do – fall, and fall hard.

There was a small amount of pure bad luck – the dot-com bubble burst AOL’s value, high gas prices stopped Chrysler’s SUVs in their tracks – but a large number of merger integrations fail for completely foreseeable reasons – and a good dose of human error.

In this Process Street post, I’m going to look at the three pitfalls and why they have such a huge impact on the success (or lack thereof) of your post-merger integration.

If you just came for the free template, you can grab it below:

Click here to get the Post-Merger Integration (PMI) Checklist workflow!

This workflow is designed to walk you through every stage of the post-merger integration process from pre-planning to post-mortem. While the step-by-step process will ensure nothing gets forgotten, it also provides ample space to document important decisions and data. Features like Dynamic Role Assignments, Due Dates, and Approvals keep everyone on the same page and make it immediately apparent if something is headed off course.

Unexpected obstacles will always pop up, but the PMI Process Checklist will help you prepare for the worst and make your integration run smoothly.

With that out of the way, let’s go through the most common ways it can all go wrong:

• The harsh truth of post-merger integrations
• PMI Pitfall #1: The people problem during integrations
• PMI Pitfall #2: With great change comes huge risk
• PMI Pitfall #3: How diligent is your integration due diligence?
• PMI Checklist: M&A integrations simplified

Let’s talk about some bad decisions!
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