Hartford Business Journal

www.HartfordBusiness.com • September 2, 2019 • Hartford Business Journal 25 EXPERTS CORNER Keys to a successful merger By Ronald Recardo M any small companies turn to acquisitions to stimulate growth. However, far fewer organizations actually get deals right. One key issue they often struggle with is achieving the forecasted revenue and cost-savings targets. This is often due to a lackluster integration process that fails to incorporate a robust 100-day plan. To beat the odds, leaders must master both the science and art of deal- making. Here are some tips. Ensure a balanced view of due diligence One of the com- mon oversights is the initial project team failing to consider voices outside the legal and financial realm. For example, one mistake is relegat- ing human resource's role to a purely tactical focus, or not getting them substantially involved during the due- diligence process. HR should provide a full suite of M&A capabilities that include: Organi- zation structure review; talent reten- tion; leadership assessment; man- power redeployment strategy; culture assessment and alignment; benefits and compensation practices analysis; and change management. Effective involvement of HR reduces integration risk, such as being blindsid- ed by costly factors that are not always visible on the balance sheet, and proac- tively addresses the organizational/peo- ple issues, which are the most common reasons for M&A failure. Develop and follow a robust integration process Once the deal is signed, accountabil- ity for driving the integration process will be passed to either executives, or an M&A integration team that man- ages the 100-day roll-out. Having a cross-functional team comprised of both entities will allow for a smooth transition while main- taining an understanding of strategic intent, desired targets (synergies) and expected quick wins. To be successful, project leaders should develop a three-part integration playbook that includes the following: Phase I: Integration project plan- ning — Having an overall integration plan at the conclusion of due diligence is something to strive for in every instance. During integration planning three major steps are completed: 1. Develop project governance. This includes developing common processes and templates such as risk manage- ment, issue escalation, progress report- ing and escalation of key decisions that need to be made. Make sure you have provided enough structure and have developed common processes and templates for the entire range of project-management function- ality. 2. Create project structure. This en- tails identifying the number and type of integration teams; clarifying roles, responsibilities and decision-making authority; and developing formal char- ters for each team. 3. Develop/finalize integration strategy. This includes confirming/ updating the financial assumptions driving the deal, developing/confirm- ing an integration strategy, translat- ing the strategy into an overall score- card of measures, and cascading that down to each integration team. Phase II: Develop 100-day plan for acquisition integration — The first thing a seasoned integration leader needs to do is to create an overall inte- gration roadmap, which includes the major activities that occur across each of the integration teams. The 100-day plan should focus on the specific activities and deliverables that must be completed in order for each integration team to identify and capture their assigned targets. Activi- ties should be baked into the 100-day plan to transfer ownership of the inte- gration to executives. Phase III: Stabilize and handoff to leadership team — Stabilization occurs on two levels: ensuring the acquired company achieves its business plan and ensuring the acquiring organization achieves anticipated deal synergies. Monitoring the progress of each inte- gration team is a function of understand- ing the difference between the actual vs. targeted performance. Clarify performance objectives Integration performance will increase dramatically if every mem- ber of an integration team is held accountable for achieving targeted results. A best practice is to incorporate meaningful rewards for outstanding performance and consequences for poor performance. Ronald J. Recardo is the managing partner of The Catalyst Consulting Group LLC, a business advisory firm. OTHER VOICES Offshore wind means real jobs, growth for Thames River By Keith Brothers T he New London waterfront is expected to be a busy place over the next year. With the recent announcement regarding the construction of the National Coast Guard Museum in early 2020 and the anticipated work on State Pier, the region is going to be a great place for new construction. Work on turning State Pier into a modern, heavy-lift facility that supports offshore wind development will provide opportunities for welders, electri- cians, carpenters, and numerous other trades, and this is only the beginning. Once the pier is completed, that same skilled workforce will be needed to carry out the assembly work on the pier for offshore wind turbines, promising an economic return for at least the next decade. Recent excitement and discussions have caused us to lose sight of one of the most important benefits that will come with revitalizing State Pier as a hub of the northeastern U.S. offshore wind industry: Jobs. Local manufacturers and suppliers have already begun laying the groundwork for developing and supporting a local off- shore wind supply chain. As more states move forward on their commitments to renewable energy there will be increasing opportunities for offshore wind develop- ment, which means more activity at State Pier and greater incentives for offshore wind suppliers and manufacturers to come to southeastern Connecticut and put down roots. Throughout this entire, multi-decade-long process, there will be opportunities for all craftspeople to build, renovate and work as we construct a truly modern waterfront. There is too much at stake to let politics stand in the way of developing good jobs for our hardworking people, and I want to thank Gov. Lamont for keeping the State Pier deal on track. The opportunities that will come from an entirely new industry for our region can have incredible impacts in terms of economic growth and visibility. Con- necticut is in a position to be a leader in the offshore wind industry, and busi- nesses will flock to the region and add to the local supply chain, bringing more jobs to our region and reducing the need to import turbine components. For too long people have talked about New London's potential, and never before has the city been in a position to seize that opportunity and develop its waterfront. The city is already building new apartments downtown, it has the space, the community, and the world- class access to education. The last piece we need is the job op- portunities to truly propel the region forward as the economic center of southeast Connecticut. It's time for New London to utilize its potential. The start of construction on the Coast Guard Museum, long viewed as another missed opportunity in New London, is another indication that the region is ready to take a major step forward in development. Keith Brothers is the business manager of the CT Laborers' District Council and president of the Norwich-New London Building Trades Council. Keith Brothers Ronald Recardo

• Cover