The Deal Team

In order to clearly differentiate this new type of team from the standard integration teams already in use throughout the industry, we call it the deal team.

The exact composition of the deal team depends on a number of factors and will vary from project to project. Certain figures will always be present, such as legal counsel, tax attorneys, and accountants. Bankers and consultants may also be involved during the diligence phase of the project, as many deals are mediated and/or financed by investment banks, and their involvement should be considered during team configuration. The composition of other team members is contingent on the nature of both the acquiring company and the target company.

A very large serial acquirer often maintains a dedicated corporate development group of up to 30 or 40 members, including functional experts, integration specialists, ex-bankers, lawyers, accountants, and other experienced M&A professionals. Companies of this size often pursue multiple acquisitions at once, and the corporate development group may field multiple deal teams with varying degrees of overlap.

In smaller companies or those which only makes occasional acquisitions, maintaining a large corporate development department is not feasible or economical. More commonly, a dedicated corporate development group of five or fewer members will be assembled as needed. Groups like this depend on a network of internal advisors to provide functional expertise in evaluation of potential assets and tend to rely more on external support figures like consultants and bankers. Both large serial acquirers and smaller organizations can form a successful team without a dedicated corporate development group.

Whether you’re configuring a deal team at a large serial acquirer or a smaller organization, the team should include two figures: the deal lead and the deal PM.

The deal lead owns the M&A process overall, and is responsible for the end-to-end success of the project. In many cases, the deal lead is someone from the corp dev team, although this is contingent on many variables, including the size of the company and the type of acquisition. The deal lead assists in validating targets pre-LOI. Upon signing the LOI, the deal lead determines the makeup of the deal team, based upon their understanding of the acquisition and the best path towards its execution. The deal lead plays a critical role in ensuring that the evolving project remains in alignment with the strategic goals driving the M&A initiative as a whole. When integration comes to an end, responsibility falls to the deal lead to close the books.

The deal lead, coordinating with the corp dev team, takes charge of external communications with the target company, the executive team, and other parties over the course of the project, and is responsible for reporting final results post-close. The deal lead assigns roles and responsibilities, authorizes the use of resources, and pulls in outside support as needed. A senior executive often fills this role — they typically possess the necessary combination of strong leadership, strategic vision, and decision-making authority required to succeed.

The deal PM operates directly under the deal lead and is responsible for end-to-end program management. As the official head manager of the deal process, the deal PM encourages teams to operate according to Agile principles and techniques, and provides training and support as necessary.

For a deal PM to succeed, the following attributes are essential:

1. Experience. The deal PM should be a certified Agile project manager, with a proven track record overseeing complex, multifunctional projects.
2. A love of detail. The deal PM is responsible for processing complicated and finely detailed information. Negligence, when it comes to details, can have serious consequences.
3. Broad expertise. The deal lead and the deal PM pull it all together. Both must understand every aspect of the M&A process, and see how the different pieces all fit together. This is especially true for the PM: in order to effectively coordinate and support the team on the tactical level, the PM must be a pseudo-expert in every functional area of the project.
4. Good people skills. A successful PM marries technical expertise and effective communication, engaging all members of the team.
   

The size and composition of the deal team will vary, based on the nature of the target asset, the acquisition strategy, and the resource requirements of the M&A project as it evolves. Larger M&A initiatives often involve several teams working in parallel. When this is the case, the deal lead and PM coordinate the different teams. A multi-team project environment often requires additional leadership roles to support intra-team communication. Ideally, each individual team within the multi-team unit will include a team leader or project manager to serve as the coordinator/facilitator.

Team Configuration Options for Agile M&A

Regardless of the deal team configuration, the deal lead and PM employe the same basic techniques — the plays — to establish an Agile workflow.

Optimizing Deal Management and Execution through Agile M&A and Custom Game Plans

Once the deal team has been assembled, with appropriate skills distributed across various disciplines and departmental functions, the Agile M&A Process Model is ready to be deployed in support of active management of project tasks. Maintaining team alignment throughout the deal is challenging, however, as teams lose sight of the big picture and become consumed by individual tasks. Accordingly, Agile’s “game plan” model keeps the team focused on the larger strategic goals of the acquisition.

As a deal progresses from diligence into integration, these challenges become increasingly complex. Integration projects in which large organizations must consolidate assets — such as systems, services, information technology infrastructure, and so on — often consist of intricate activities that affect all functional areas of the business. In many cases, such projects are highly complex, resource-intensive, costly, and disruptive. A poorly managed integration project has the power to diminish the overall value of the merger or acquisition and can compromise the company’s revenue-generating capabilities.

Due to the way integration is commonly conducted, industry-wide challenges include communication breakdowns, inefficient use of personnel resources due to delays and unclear priorities, as well as excessive overhead for information management. Executing integration sequentially, following a predictive model, is simply not an optimal strategy in today’s highly volatile business domain, where priorities change frequently and adaptability is essential.

In order to meet the industry’s highly dynamic needs, we developed the following integration model based on Agile principles.

Full-Scale Agile M&A Integration Model

Medium-to-large M&A engagements frequently encounter challenges regarding the organizational strategy for utilizing team resources in the most effective way. Some deals are too large and too complex for a single project team to manage. To accommodate this, the Full-Scale Agile M&A Integration Model is specifically tailored to support M&A initiatives involving many project teams. Designed to allow large companies to manage multiple, parallel workstreams simultaneously, this scalable integration model facilitates management of all activities, beginning with due diligence and following all the way through post-close integration. In short, this model provides corp dev teams with a single framework from which to plan, coordinate, and execute activities across all functional departments, enabling seamless collaboration and the fluid transfer of knowledge across as many as 20 project teams.

The leadership team provides the strategic directives that define the organizational priorities and initiatives of the Agile M&A integration. Their guidance drives program and project teams to collaborate in the planning and execution of projects. The Integration Model provides the framework by which organizations establish a customized game plan composed of individual Agile plays. The game plan model allows several teams to work cohesively to plan and execute initiatives together — this is imperative during the diligence stage, where fragmentation of team resources often leads to the loss of critical domain knowledge is often lost after deal closure.

Leveraging the collaborative nature of the Agile M&A Integration Model, teams begin the knowledge transfer process as a natural extension of executing work in an Agile way; project team members assimilate and spread knowledge across the program organically and efficiently, without incurring additional effort or cost. As a result, this knowledge management approach enables integration planning to begin much earlier in the overall process. Planning and executing work in parallel and utilizing multiple teams optimizes the overall integration process, and increases the quality of the output significantly due to the short feedback loops and rapid learning cycles.

To leverage the power of this model, practitioners implement specific structured yet adaptive activities: customized “game plans,” comprised of detailed task management techniques known as “plays.” The traditional concept of the “playbook” — a rigid, one-size-fits-all, formulaic approach to managing corporate integration activities — no longer corresponds to today’s highly unpredictable M&A world. Managing work in an environment of shifting priorities, and with a high degree of uncertainty, demands a more fluid and dynamic approach.

Concepts like “plays” and “game plan” are designed to provide guidance on specific practices at the level of both team and program. The plays provide a flexible framework from which organizations can build their Agile M&A game plan, which is customized to fit the specific needs, requirements, and context of the initiative. Imagine it as analogous to a game of football: in preparation for a game, NFL teams draw up a custom game plan unique to each game, taking into account various factors such as the opposing team, team members' health, availability of key players, etc. In these game plans, teams script predetermined plays into the opening possessions of games. Most scripts contain approximately 15 plays designed to establish a rhythm, take advantage of a tendency they spot in opponent’s defense, engage specific players early on, or use formations to identify defensive coverages by the opposing team.

So, you can see how this analogy extends to an Agile M&A game plan. The Agile game plan consists of a collection of core plays (i.e., processes) that serve as the operational reference guide for the M&A initiative. The game plan also contains a series of optional situational plays (analogous to “audibles”) to be executed if specific situations arise during the M&A project. For example, an acquihire will not require the full deck of resources typically used to approach a more involved M&A project; in other cases, an international transaction may emphasize collaboration between remote team members and demand specific resources or tools to facilitate that teamwork. This modular approach allows the project team to adapt to changing scenarios in order to optimize team performance and minimize delays. If an integration effort is expected to be more complex than usual for any reason, the team can develop a plan to accommodate more situational plays.

Most projects, regardless of size and scope, should develop a risk response plan. M&A integration teams benefit from “audibles,” which allow the project team to make “on-the-field” adjustments within the guidelines set by the game plan. The deal lead and deal project manager will be equipped with the tools to decide whether certain situations warrant ad-hoc adjustments. The game plan gives autonomy to the team, enabling quick decisions without reliance on rigid escalation protocols, which often lead to costly delays. In short:

1. Agile’s modular play-based game plan allows for a quick response to changing conditions; situational plays emphasize preparedness and reduce risk.
2. The game plan facilitates management of parallel workstreams and multiple teams through all stages of integration.
3. Flexibility of the Agile framework improves collaboration and communication between teams, reducing delays and keeping costs down.
   
   
   

To implement a tailored approach to M&A and maximize the benefits of Agile, the following key steps serve as a guideline for constructing a custom Game Plan:

1. Assess core processes and situational needs for the project.
2. Evaluate team-level processes and procedures; identify key plays that are expected to optimize team performance.
3. Evaluate program-level processes and procedures; identify key plans that enhance program visibility and risk identification.
4. Brainstorm potential scenarios that may increase the risk of project success; develop specific risk response plans, i.e., custom plays.

Next, we will look at some of the core Agile plays that can be tested and configured for your game plan.