Last year saw an estimated US$4 trillion of mergers and acquisitions (M&A) across the globe. Yet, the point to note is that even as this trend continues, over 65 per cent of these transactions will fail to post the returns that prompted them in the first place, primarily because of such things as inadequate cultural integration, and the lack of a clear and effective integration process.
An Accenture survey of top M&A executives across the US, Europe and Asia, revealed that, when asked about the critical factors in successful M&A integration:
• 55% singled out the orchestration of the integration process.
• Over 40% mentioned understanding of cultural integration issues and the establishment of organisational structure and accountabilities.
• 30% emphasised commitment and leadership from top management and communication strategy.
According to the global learning provider, Tata Interactive Systems (TIS), makers of the TOPSIM® business simulation, this shows that the benefits of an acquisition are not generated automatically once that acquisition is over. They need to be achieved through skilful integration of the businesses, process and people and their roles and functions.
Many M&A executives recognise the importance of the ‘soft’ aspects of the integration process - aspects that deal with communications, organisational cultures and structures and so on. Yet too many companies are under-prepared to deal with these aspects of an acquisition.
To help combat this, TIS has extended the range of its TOPSIM® workshops to address specific post-merger integration (PMI) issues. These PMI workshops guide participants through a series of post-merger scenarios, posing particular challenges in the areas of integration planning, expectation setting, organisational culture and communication.
Manoj Kutty, TIS’s president, simulations, commented: “TOPSIM is a management development simulation that was developed over 25 years ago and is now used by over 100 companies and 400 universities worldwide. TOPSIM simulations, deployed in a blended workshop setting, offer the participant an in-depth understanding of functional skills along with managing the business operations within an industry such as banking, insurance, retail, and pharmaceuticals.
“It’s about learning business by doing business – and, where the PMI workshops are concerned, providing a critical learning path for business integration managers.”
Alan Samuel, TIS’s head of operations in the UK commented: “TOPSIM is not e-learning but blended learning, emphasising classroom-based and collaborative learning. A TOPSIM workshop is a simulation based workshop that enables participants to understand the cause-effect relationships of their decisions in a ’safe‘ game play environment.
“The workshop is facilitated by domain experts who mentor the teams through the discussion and sharing process that is integral to the the workshop’s structure. The simulation which forms the core of the workshop telescopes a long-term horizon of three years into two-days and discussions are interspersed with the simulation, throughout the workshop.”
TOPSIM® – PMI is a simulation-based management development programme where participants, in teams, manage the integration process of two software product companies that have recently merged.
About the TOPSIM® PMI Workshops
The aim of the workshops is for participants to understand the key leverage points to accomplish successful Post Merger Integration (PMI). This involves transferring capabilities between the merged entities by managing:
• Cultural differences between the merged entities
• Employee perceptions of the merger
• Boundaries between the merged entities
This is done by:
• Creating cross-functional teams
• Taking Decisions: Participants make decisions involving complex trade-offs in an environment plagued with high levels of uncertainty.
• Debriefing: The facilitator relates real-life experiences and knowledge to the decisions that the participants make in the simulation, enabling a deeper understanding of the likely pitfalls in a PMI exercise.
TOPSIM® – PMI plays out over four phases, from the first 30 days after the merger to some two years later. Over these phases, participants make critical decisions involving complex trade-offs in:
• Integration team (steering committee and functional integration teams): composition; leadership, and investment of time
• Communication strategies for employees, customers and shareholders
• Calibration merger benefits
• Human resource-related decisions on the new organization structure,; lay-offs, and compensation alignment
• Market-facing decisions for realising synergies from the merger
• Functional integration decisions (alignment of business processes, assets, and so on)
• Core functions (marketing, operations)
• Support functions (accounting, legal)
• Training and socialisation initiatives
• Tools for monitoring the progress of integration process (employee surveys)
About Tata Interactive Systems (TIS)
Tata Interactive Systems (TIS), a global leader in e-learning, is a part of the $22bn Tata Group. Truly international, TIS has a presence across the US, Canada, UK, Australia, New Zealand, the Middle East, Japan, India, and mainland Europe. TIS offers corporations, universities, schools, publishers, and government institutions a diversified and innovative bouquet of learning and training solutions including Simulation-based Learning Objects (SimBLs™), Story-based Learning Objects (StoBLs™), courseware and curriculum design, special-needs education, assessments, electronic performance support systems (EPSS), mobile learning, game-based learning along with other corporate training and consultancy services. Our multi-disciplinary expertise and 17 years’ experience across domains helps us design e-learning programmes that are unique to clients’ requirements and specifically crafted to boost knowledge retention and application.
TIS is the only e-learning organisation in the world to be assessed at Level 5 in both the SEI-CMM and P-CMM frameworks. TIS’s quest for excellence is reflected in numerous prestigious industry awards, including a Silver Brandon Hall Excellence in Learning Award 2005 and 2004, APEX Award of Excellence in 2005 and 2006, BETT Awards in 2004 and 2006, and two Business World–NID Design Excellence awards.
Further information from:
Alan Samuel, Tata Interactive Systems, +44 (0)20 7905 0156