After the bull run: Realizing the deal’s full potential

Thomas Bertels and Charles Depasse

After the bull run: Realizing the deal’s full potential


Low interest rates are fuelling a wave of mergers and acquisitions to levels not seen before the financial crisis.[1] In addition to financial buyers, who are taking advantage of inexpensive debt, companies across all industries use the current environment to achieve economies of scale and grow market share. And a more sophisticated sales process has made deals more expensive, compared to the environment a decade ago.[2] The emergence of private equity as a major force has resulted in driving up prices and reduced the inventory of available deals. Even more important, the companies that are up for sale often face significant challenges themselves. As a result, making the deal work - realizing the business case – has become much more important. This will often require making decisive changes during the first months after the announcement. The integration manager – typically a temporary assignment for a senior executive charged with integrating the two organizations – has emerged as a critical role for accelerating the process and establishing the foundation for success for the new company. This article outlines some guiding principles for helping those selected as integration managers succeed with their assignment during the most critical phase: the first hundred days.

Realizing the deal’s potential is not an easy task

The days and weeks prior to closing the deal often feel like the bull run in Pamplona: On the acquirer’s side, everybody involved (boards, executives, business development teams, lawyers, bankers, and consultants) have a strong incentive to make the deal happen. In the push to get the deal done, major challenges surfacing during due diligence are often set aside.

The integration manager, once appointed, resembles the matador who is by himself in the arena with the bull charging towards him, with many of those involved in making the deal happen sitting safely in their seats high above the arena.

Integration management is critical, and to be able to do their job, those selected need to have unconstrained access to the highest level of the organization. At the same time, they need to be very careful about how to exercise their power – a false move can create enormous friction and set the integration back months.

How much integration is required?

The level of integration (and the degree of change) required depends very much on the nature of the deal. Mergers are often the most challenging, as realizing the full potential requires integrating virtually all aspects of the business, including defining a new organizational structure. Acquisitions where the business being acquired will continue for the most part as a standalone business and become part of the overall portfolio are less challenging. If the motivation is to acquire a specific product or technology, the integration task is a lot less challenging. Clarifying the mandate – what is in scope for the integration and what is not, is absolutely critical.

Regardless of the size and complexity of the deal, the integration manager has to immediately focus on these key deliverables after the deal closes:

- Pull together a team

- Establish the governance structure

- Review and operationalize the business case

- Establish the organizational structure

The short timeframe requires the integration manager to hit the ground running. Simultaneously, he or she is setting the cultural tone of the new company, role modeling with the integration team new behaviors that everyone they interact with assumes is the new norm.

Charter a team

Integration managers often bring extensive knowledge of the acquirer as well as a strong network of interpersonal relationships to the job. Getting the job done also requires extensive financial and analytical skills as well as strong program and change management experience; plus, somebody who knows the acquired company inside out. A small team of internal and external advisors is the most effective solution, given the limited time available, larger teams tend to slow things down. 

Establish the governance structure

A separate governance structure for managing the integration is needed, including the CEO and the main C-suite representatives in the form of an integration steering committee. This committee will meet as often as needed, but normally twice a month and be presented with the main decisions. A separate integration team should be working on solving day-to-day integration issues and preparing decisions for approval at the Steering Committee. It is best not to ask the functional leaders to be part of the integration team, so they can focus on the existing business. This is to ensure that the heads of function are not distracted from giving all their attention to the business and can avoid a drop in performance commonly seen in the first months after the announcement. 

Review and operationalize the business case

Almost all acquisitions are based on the assumption that the acquired business will continue to perform as it has in the past; however, in many deals, the performance during the first year fails to meet the assumptions outlined in the elaborate models used to sell the deal.

The real risk of most integrations is not that the details don’t get done, but that the integration is based on false assumptions. For example, investments needed to realize the synergies are often underestimated. The list of things that can go wrong during the implementation and result in irreparable harm is long, and most of these issues are often not visible.

The initial business case used to sell the deal is often benchmark-driven, once the deal is done the question becomes what can be accomplished by when. The integration manager needs to review the business case with the integration team and form their own assessment of what is realistic and how to go about achieving the realistic targets. For the integration manager, the recommended approach is to commit to savings targets (not cost levels) and to show the cash flow impact.

Defining what is in scope for the integration and what needs to be addressed through the regular organization – for example sales synergies – is critical. The first step is building a realistic, implementable program that has support and buy-in from the functional leaders that need to deliver the business case. To get the organization to accept the targets, an effective governance structure is key, as functional leaders are often resistant to commit – ‘I need to talk to my people first’. To resolve disputes, the integration manager needs to have a way to escalate issues to the CEO. Working with the functional areas, the integration manager identifies short term synergies with top or bottom line impact and creates assignments. It is important the governance team signs off on the revised business case.

Establish the organizational structure

Announcing the new organization structure, at least to the heads of functions and geographic regions, within the first hundred days is critical. They can then help design and appoint the teams who going forward will deliver the business case as well as manage day-to-day business. Who gets appointed and the process used is vitally important to the credibility of the new leadership team. The aim should be to build an organization with the best elements and talent taken from each company. People will rarely begrudge a worthy and deserved appointment, but ‘political’ or favored appointments will have a damaging effect. Of course, speed is critical – delaying decisions too long inevitably leads to losing good talent.

Creating a Microcosm of the New Company Culture

After the dust has settled on new structures and systems, the longest lasting effect the integration leader and the team can have on the success of the post-merger integration is in the tone they set by how they work with each other and their colleagues. For example, if the rationale for the new business is to be a global innovator, then the integration team has to role model innovative approaches to solving problems taking into consideration different cultural perspectives. We recommend that the integration team take the time to get to know one another, their learning styles, personality types, and cultural differences, and commit to a code of conduct to guide their own behavior. How the integration team communicates and interacts is just as important as what they accomplish.


Integrating two organizations is more than a project to be done after the bulls have stopped running; it is a process that deserves to be carefully staffed, planned and managed. Select the right integration manager is a crucial first step. Appoint a small team with the necessary technical skills who represents both organizations, supplemented by external advisors. Establish an integration steering committee to fast track decisions. Scrutinize and reset the assumptions made in the business case so expectations are realistic. Be as objective and impartial as possible in selecting the new leadership team within the first hundred days. Build the integration team, explicitly establishing a set of norms for their efforts which will also help set the tone for the culture of the newly formed entity. Having done that, you will have laid the foundation for success to realize the full potential of the deal.

About the Authors

Charles Depasse graduated in 1982 from the University of Brussels with a degree in Electromechanical Engineering and from New York University with an MBA in 1984. Started his career with Pfizer in Product Development, then moved on to take on Production responsibilities with Smith and Nephew, before joining Nycomed as Head of Operations in March 2000. Supported the transformation of Nycomed, by improving Manufacturing and Supply Chain until the acquisition of Altana. In the newly formed company, served as Integration Manager and then took on the responsibility for Human Resources until 2013 when the company was acquired by Takeda.

Thomas Bertels is the Managing Partner for Valeocon, a global boutique consulting firm helping clients translate strategy into action and achieve sustainable improvements in performance by addressing both the people and process side of change. Thomas has twenty years of experience consulting to executives from a broad range of industries. He is a recognized expert and published author on process improvement and organizational learning. Prior to consulting, he held various leadership roles at Asea Brown Boveri (ABB). Thomas also graduated with an MBA from New York University.