Modernizing a Process-Based Company

Is your company’s M&A process out of date? M&A has dramatically changed over the past few years, and practitioners have realized that there are better ways to go about acquisitions. Naomi O’Brien, Head of M&A Integration at Honeywell, experienced this firsthand when she updated their M&A process. In this article, she will talk about modernizing a process-based company.

“When you can show somebody how the changes make their job less challenging, they’re more willing to put in the time and effort embracing it” - Naomi O’Brien

Challenges

Naomi worked for Cisco, a well-oiled serial acquirer who runs multiple deals a year. So when she came to Honeywell, who does one deal a year, she saw a lot of inefficiencies and challenges.

Because Honeywell isn’t very acquisitive, most people lack M&A experience. They also didn’t have dedicated people for the function, and they did not invest in proper tools for deal management. 

Furthermore, their process was very traditional, most of the people involved in the deals used checklists and were very much siloed from one another. 

Implementing Change

Naomi quickly assigned cross-functional people dedicated to M&A. This instantly improved consistency in their overall process. She also insisted on bringing in project management tools to increase the efficiency and collaboration of the people working on the deal. 

She also introduced the weekly cadence for the integration leaders to be more in-tuned with the functional teams and understand their respective negotiables and non-negotiables. They also do retrospectives every 30 days to see if they are accomplishing their goals.

On top of everything, Naomi implemented a monthly functional sync meeting so that everyone could become familiarized with the changes in their processes and approaches.  

Training People for M&A

When Naomi came into the role, her integration leaders didn’t have any experience. And while these were competent employees, conceptual knowledge is very different from applicable experience. Hence, she built an integration leader startup program. 

This is a team folder filled with documents that educates integration leaders on the deliverables they need, the deliverables’ purposes, and directions on when to use them. 

Naomi also did a lot of hand-holding in the beginning. She performed a weekly meeting where integration leaders could ask her questions and get her feedback and guidance. 

Ensuring Integration Success

To monitor the company’s deals and active integration, Naomi uses an integration scorecard that focuses on 4 key elements of the deal:

• People - Hiring process to scale the business, retention plans
• Financial - Revenue, gross margin, synergies
• GTM - Selling motion and sales strategy
• Technology - Capabilities, milestones, product insertion

Each of these metrics is color-coded with: 

• Green - On-point
• Yellow - Off-track but recoverable.
• Red - Unrecoverable; they have to create a recovery plan 
  

In addition to the high-level summary report, Naomi requires her integration leader to create a one-page report that gives more details of the deal’s KPIs. This integration scorecard is sent monthly to their CEO.