How to Get Alignment From Both Teams During M&A Integration

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Thanks for having me Kisan. Pleasure to be here.

Can we kick things off with a little bit about your background?

I've been doing M and A integration, leading that for a number of public companies, Nokia, SAP, Visa. I've also been a part of Cisco's integration team for several years back when it was the heyday of the dot com days. So I've got a lot of experience setting up and leading integration functions and I've managed over 50 deals integrating them across the globe, including companies that have been headquartered in Europe and Asia, PAC and everywhere in between. Basically been at this a while. My background is in process improvement re engineering. Quite a non traditional background. I have a Master's in Physical therapy but went back to business School and kind of fell into this as a career doing integration based on some work I was doing at Synopsys. And we had to develop an integration capability because we started acquiring a company. So a colleague and I put that together. Lo and behold, I. I've been in this career for many years at many companies. As a result of that work, you never know where your career is going to take you.

Is there anything from physical therapy that you're able to bring with you to help with integration?

Oddly enough, absolutely. When you're working in a hospital environment, you've got to interact with a lot of different stakeholders. Physicians, nurses, social workers, families. And so you have to be very adept at communicating and bringing messages to people, to different audiences at different levels. Each audience requires a different style and different engagement model which is very akin to working on integration where you're working with executive leadership, middle management, individual contributors. And so you've got to be able to work up and down that chain and understand those audiences and what they do and then also be an influencer. There's a lot of parallels. It served me well having been in the hospital environment and a physical therapist from a communication, from an attention to detail perspective and just being able to quote, coordinate people. And that's a lot of what you're doing from an integration role both at your company and with the Target.

That's actually really great relevancy there. You did quite the tour. You've been all around the whole Bay Area. You said Cisco, Nokia, SAP, Visa, kpmg.

It just means that I'm old Eson. Having been in a number of industries, you're able to draw from a lot of different companies and a lot of different industries and bring best practices to companies that you're at. And I think one thing that I've learned over the years is Cisco was viewed as the benchmark of how to integrate companies back in the early 2000s and even through to today because they've done so many and they've been very good at doing that if you look holistically. Not that they haven't had their troubles in the past. What I've learned a lot is you can't come into a company and just say I've done it here. This way. You really have to listen and understand what really works well at a company, what's not working well, and where you can influence and bring in some best in class practices from different industries, histories and your experience. But I think that's the other thing having been a physical therapist is you've got to Be a great listener. And in this role, you've got to be a great listener as well, and you've got to be able to cobble things together. The experiences that I've had have allowed me to bring in best practices from a lot of different industries into Light and Wonder and Issa when I was there, etc. But you really can't come in heavy fisted. You really got to understand the environment, how the company works, how decisions are made, and then bring in things that you think will work in that environment.

Listen first.

Yes, absolutely. Always.

As an integration leader, who are the key people you should be aligned with?

One of the most important things is first understanding from the deal team. Why are we trying to do a particular deal? Everyone talks about the value drivers of the deal or the objectives of the deal. You start there and then you also align with the business unit sponsor who's championing the deal in terms of their vision of why the deal is important and what they're trying to get out of it. That becomes the North Star, which everyone should align to. Because what we're doing in our roles as an integration lead is we're helping facilitate the other functional teams to get a sense for how they focus on diligence, but then also how do they plan integration based on what we're trying to get out of a deal. Those two stakeholders upfront, the biz dev lead, the business unit sponsor, are critical as you're going through the process. I think it's incumbent upon the acquiring company also make sure that they're aligning with target leadership involved into the deal to make sure that they're in lockstep in terms of the deal rationale, what they're trying to get out of the deal, key objectives, because you have to have that alignment on both sides in order for things to be fluid and to work well. If there's misalignment, things tend to fall apart because then you have an acquired company leadership directed to do things that aren't aligned internally or vice versa. And then the integration teams who are trying to support what we're trying to accomplish in terms of overall deal value, then are confused in terms of how they support the deal and how they should be integrating their functional area and the goals and objectives from their standpoint. To summarize, really critical early on is the biz dev lead and the internal teams. Those teams need to make sure they're lockstep with target leadership and then things cascade down from there. What I try to do is once we have that alignment through various Conversations I'm trying to consolidate that information and that the findings from diligence to then begin to cobble together an integration kickoff where we level set all the folks that have been involved in diligence who are hopefully transitioning and going to lead integration to get everyone level set that this is why we're doing the deal. These are our primary objectives. Here's the integration model that we're going to run. Whether it's fully integrating the company standalone, integrating in a hybrid way to integrate shared services so everyone's in lockstep in terms of the North Star, the objectives, key findings coming out of diligence and some early initial integration planning that we've aligned on with functional teams ahead of a deal getting closed. We want to have everyone in alignment before we really kick things off. From an integration standpoint, those stakeholders are critical for the integration lead to work with and to align with and it actually helps them because if they can't clearly articulate the deal rationale to people like myself and the target leadership, then you can see where you're really going to have problems down the road. People are not going to have a clear understanding of why you're getting the deal done.

That's something you've had to help out with to flush it out or is it pretty well fine tuned by the.

Time you get involved as an integration leader? The way you can help is during diligence. Many times you're looking at critical items, legal, finance, tax, where they might be showstoppers to a deal. If you can broaden that to also go deeper and understand how a company operates, who some of the key decision makers are, some of the initial integration planning through a set of questions that I initially develop and I've done this at companies like Light and Wonder where we'll ask questions of the business that haven't necessarily come to the forefront but should be discussed during the diligence process. So for example, if you're acquiring two companies and you're acquiring a product, what's the plan for the product? Are you going to integrate those product roadmaps? Are you planning to sell them independently? If you're planning to sell them independently, what's the go to market model and strategy? What's the communication messages to clients? So asking those types of questions to at least get people which hopefully they are already thinking about those things. But if they're not getting the thought process started on some of these key questions so that not only do you have the right messaging going out to the target and to customers of Your own and theirs. But you're also being able to communicate those messages internally and to target leadership and the target team who's going to be involved on integrating both sides so that they have a clear understanding of what we're trying to accomplish. I do that. Typically in an ideal world when you kick off diligence, you have maybe a mid diligence review, end of diligence review. And you can bring these questions up in those dialogues in plenary with the functional teams as they're going through their diligence findings. And you can start probing as the integration lead, what's the reporting going to be, what's the go to market model, how are we going to message about products and are we selling them independently or not? Those are just a few examples. And those discussions then lead to obviously other things coming up that people want to ask and clarify. And I think that's the vehicle. But the integration league can help with that set of questions either back to the transaction team to help vet or during these diligence reviews that you're hopefully having throughout the diligence process. I've seen that work very effectively when you have checkpoints throughout diligence and you're asking these questions and having these conversations because invariably they lead to other questions and clarification that people want but typically might not have a chance to bring up to some of the leadership internally ask questions early.

This tough this is. I thought the attorneys were bad, getting them involved early with their questions. I got to get you up there too.

And we're trying to influence and ask smart questions. I think that's the goal. And a lot of these things are being talked about, but you can never be too sure because people get caught up in just getting the deal done and they haven't necessarily gone a layer or two deeper on the thinking and the rationale.

When you talk about the deal objectives, value drivers. Why is it important to align internally with the target leadership on deal objectives and value drivers?

Making sure that the target leadership is bought into the deal rationale is critical. You want to make sure that the company that they're selling, that's a goal of theirs is the vision that target company has. And you know that both sides are aligned on what they're trying to get out of the deal because typically both parties are going to be incented to hit certain either revenue targets, EBITDA targets, operating expense targets, et cetera, or in some cases there may be an earnout. And so therefore both sides need to be in lockstep and bought into the overall strategy and it needs to align because the misalignment can lead to mistrust, misunderstanding, and then you're starting to put people on different paths. And not only does that erode value from the deal, it also the integration model starts falling apart and you start eroding further. The deal value that you originally thought was the one plus one is three or four. Next thing you know, one plus one is no longer two, it's less than that because there wasn't this alignment. If you take a step back and think about it, it should be very logical that this would be a discussion and something that's done up front, front to make sure and validate why you're doing the deal and that the target leadership has bought into that. So you're on the same page. How do you do that during the deal process? It's trying to influence, it's trying to control or at least make sure that those discussions are happening. Because one of the things that I try to do is also meet with the target leadership before close to review some of our thoughts around integration planning in terms of type of model that we're going to run. Because you need to coordinate with them early on in terms of who are some of the key functional work stream leads from the target company that would be engaged from an integration standpoint and also from a leadership standpoint. In many cases, you may run a workshop shortly after close, sometimes in cases even prior to close, when you know the deal is very close to being signed and there's no roadblocks and you're not gun jumping, that you may start some integration planning with both sides early on. But if you're not in lockstep and you go to that, say off site, which may be a few days and you're trying to set up, here's what we're trying to accomplish, here's what the deal rationale is, why we're doing the deal, here's the integration model, here's where we're moving toward. You can see very quickly then things could fall apart if you don't have that alignment. So I try to ask those questions of the deal lead is the sponsor, is the leadership talking to the target? How well aligned are they philosophically on what we're trying to accomplish, integration model and those types of things, either through the deal lead or direct conversations with the executive sponsor and leadership team internally, making sure some of those conversations are happening early on. Now again, that's in a perfect world, not all deals are done perfectly and both sides are in good Alignment in terms of a deal coming to fruition. Sometimes you're getting a deal done and you may not want to have those conversations early on and that can happen as well. But I think it does hurt in the long run if both sides aren't well aligned early on in the process because obviously it's doing an integration is disruptive or doing an acquisition is disruptive. And you want to move relatively quickly in a lot of cases. And you can only do that if both teams are very well aligned on where you're headed going toward that North Star, if you will, in terms of why you're buying a company and what you're trying to get out of it.

It sounds like ideally pushing this up front, the alignment on the vision, integration planning as far up front as possible is the best thing you can do.

One of the things that I've seen, having been at a number of companies, the one thing that can really jeopardize a deal is not being well aligned on the rationale and having both parties aligned. So yes, getting that alignment early on and starting and initiating integration planning is definitely, from my vantage point, a best practice. Especially if you're trying to move quickly from a go to market perspective or from an integrating a product roadmap perspective. The faster and the earlier you can align on things that momentum then carries into integration post close so you can move faster. But yeah, pushing those types of discussions and those types of alignment early on is really important. Now I will say that sometimes you're encumbered by the length of diligence. A lot of times exclusivity may be for 30 to 45 days and teams are pushing to get the deal done. And so there's obviously a maniacal focus on getting the deal done. So in some cases these discussions about reporting or deal value drivers into certain levels of detail are secondary to getting the deal done and resolving some of the issues, especially if it's a complicated deal where there's multiple parties involved, etc. What I'm preaching is more of in a best practice, best of all scenario, you're getting this alignment early on in the process to facilitate the integration planning. It's incumbent upon the integration lead because they are typically talking to all these different parties. Everyone else involved in diligence is typically focused in their area with some side discussions with other areas, finance, talking with HR, etc. But in a lot of cases, as the integration lead, you're kind of that nexus of bringing all of these different areas together and making sure that everyone's on the same page and aligned and working to the same end. That's why I think pushing these conversations early, because they do take several iterations before you come to conclusions. Because in some cases you're just raising questions that need to be answered for the first time and it could take several discussions to vet out a final outcome or answer. Having those conversations early and pushing that during diligence is appropriate and it really helps facilitate more success on the back end. In terms of integration, which I would argue that's where you're reaping the value of the deal, is the integration and how you're bringing the companies together. Or again, if you made a conscious decision to run them standalone, the deal is obviously critical, but getting what you want out of the deal has everything to do with integrating and being aligned between the companies and then executing.

Does any of these activities impact the deal model? Do you have any influence there or they keep the integration lead out of that?

I think it does in a couple of ways. One, you've got to think about from a diligence perspective. Are there integration costs, one time costs that you may have as a part of the integration as you're doing diligence from an IT perspective, legal finance perspective, when you're looking at systems integrations, and if you're going to run the company standalone or not, there's going to be one time costs. But also when you think about go to market models and how you're going to go to market, if you're digging a little bit deeper in terms of maybe what regions you might want to go to first or what countries, then there's probably knock on discussions about are we able to do that? What would we have to enable in order to do that from a go to market perspective? And so it starts that dialogue and IT can influence the deal model. One, from a expense perspective, based on the things that I talked about, one time integration costs, Two, from a resourcing perspective, again from a product development or a sales perspective, do you need more salespeople? Do you need more product development, product managers, just as an example. So incremental resource requests, as you're thinking about diligence and integration planning, but then also longer term, there may be timing issues if you're planning to go to market first quarter, post close, but you've got a series of steps to execute from a legal, from an entity, a tax, software licensing perspective, IP perspective, et cetera. Those things could take longer than you expected and therefore your revenue model may get pushed out depending on the scenario. All these discussions Again, through iterative dialogue can help vet out other things that people may not have thought of that could impact not only timing of the deal, but timing to execute and also in the end to then achieve the ultimate objectives of the deal and the value from it.

We got a lot of things going around that make an impact. Everything here.

There's a lot of moving parts.

Can we walk through a timeline? What I'm trying to understand, Don, is there's a timeline, but it's very dynamic the way you describe it. It's not just this happens here. I want to get a sense of how this ideally should flow from the early stages when I'm just shaping the thesis for doing this deal so I can get into that stages of initial diligence, come up with a model and get a LOI in front and get something signed here. That's the thing I hunt for and know how to do. But then you bring all this other stuff of getting alignment on all this stuff that we're going to have to do after the deal's done and things and I want to get a sense of while that process I'm familiar with what is the ideal timeline and working with someone like you, that's ultimately the driver of all this activity to create the value. What does that look like from how you're getting involved, that engagement? And sounds like there's additional alignment with the leader of the target company and for you to get their input to really shape that integration planning. Maybe you can give me a sense of that. Some of it sounds like it's before loi, some of it's after. I just wanted to see how that shapes. Where does that kickoff meeting happen before.

A letter of intent? Typically Corp Dev has both the transaction team and the integration team a part of one team. When I was at Visa, we had great relations between myself and our deal lead. So as that team was getting close to negotiating a letter of intent, they would come to me and we discussed the structure of the deal, the roll up structure from an entity perspective, the deal rationale, some of the risks that they perceived in doing the deal, in terms of things that we would need to assess from let's say a risk perspective, an IT perspective, a product perspective, depending on the deal and based on that information, I could start having a dialogue with them and posing questions like I mentioned of how does the executive Spartan plan to run the deal. Are we looking at as a hybrid and start engaging that executive sponsor when we knew we were going to get to a letter of intent and so that we weren't going to waste people's time and starting to have these dialogues because it was pretty well aligned that we're going to get to a letter of intent. So you could at least start having these higher level dialogues. I could also opine on deal structure. There's actually been a case for me when I was involved in a deal at Visa where we were acquiring some assets from a subsidiary of a parent company based in the US but from a Japanese entity. It was a very convoluted deal structure and basically through dialogue with our corp dev team, I was able to negotiate a significant amount of complexity out for us to manage from an integration standpoint by just raising one issue and asking if that could be negotiated out of the deal. And we were able to do that. So it reduced the complexity of having to wind down two entity operations to one and allowing the parent of the company we were negotiating with to wind down the other entity operation. That is very important because it reduces our complexity post close. So those type of discussions I think you can have early on in the before the letter of intent when the deal team's coming to you for insights and advice. You should be a trusted partner to the deal team because you understand the issues across the functions, at least out of the high level. And then what I start doing once we get to that point is I get approval from the deal leads to then go out and talk to some key members of the functional integration team on some of those key issues that we talked about together as a corp dev team. Without them then going back and talking to many people, I'm just talking to some of the leads to say, hey, this is coming. This is my interpretation of some of the risk or some of the issues we're going to deal with. What say you as the functional leader? Let's start having a dialogue. And do you agree with some of these things? Because as we get into diligence, once we've signed that letter of intent, once we get exclusivity, we'll need to go and look at some of these things in more detail. Some of these bigger issues that we'll need to vet out, whether they are product roadmapping issues, go to market, information security issues, et cetera. So I can be an early warning for the functional teams in not all areas, but in certain key areas. And that's I typically would do prior to a letter of intent. As long as we know it's pretty certain we're going to sign it and I give them a heads up. All parties involved internally typically you sign nondisclosures not to communicate, and so on and so forth so that everyone's on the same page in terms of sensitivity of leaks. So then once we get a letter of intent signed and we get into formal diligence, that's when you know the deal lead will kick off diligence. We make sure we've got all the right functional teams involved. And now you're on a clock of, let's call it 45 days of exclusivity to get diligence done and trying to get a deal at least signed. And so as a part of that kickoff, once the diligence team has kicked off, usually you're setting a window when you want the first drafts of the diligence reports back. And so that's my marker, call it a week to 10 days when I start, than sending out meeting invites across all the functions to then meet with them to say, all right, let's review your findings from diligence and let's talk together in terms of one integration model, but to some of the other things that will bleed over from diligence to integration that will either need to get done potentially as a condition of close or within the first, call it, 90 days of integration. So as I start having these conversations with functional teams, as we getting draft reviews of initial diligence, call it 10 days or so after the letter of intent, then we're starting to use and build that information to build a strawman for an integration kickoff. Because eventually we want to kick off internally, formally across the functions before we sign and close a deal. So we're starting with this information in these meetings to cobble together integration kickoff. Now you've engaged each function, you're again reviewing the deal value drivers with them, their integration findings. And then as you move through diligence, hopefully the deal team is doing check ins and you're continuing to have these iterations in plenary with the executive sponsor, with the functional teams and going back and reviewing outstanding issues and findings from diligence. And that's where you're typically getting an understanding of who some of the key people are at the target company, who are some of the functional leads that may be involved from an integration planning perspective. So as a part again of that overall kickoff, we're starting to build what's the governance model going to look like for the deal. Are we going to have a steering committee? Are we just going to have an integration management office? Who are the functional leads internally and from the target company that will need to engage you're iterating on that as you're going through diligence as the deal team is coming and targeting the end of diligence and there's been follow on conversations with the target functional teams and our functional teams. I try to be involved in those meetings so I'm getting more information as our teams are meeting with the target during diligence. So you're getting more insights, again helping to facilitate the integration model. Some of the key issues also that integration kickoff deck, as a part of that, what I'm doing is collecting all this information as we're going through diligence. What I like to do is at least a couple of weeks before we're going to sign a deal as a part of one of the diligence readouts. I want to have time on the agenda to review with everyone. Here's what I'm hearing so far. I'm hearing this former CEO is going to report to this business leader and these other functional teams are going to either continue reporting to that leader or in 30 days we're going to start moving people and they'll start reporting internally to other people. Here's the entity roll up structure and here's some of the risks that we're going to have on a deal and here's some of the things we want to get done in 90 days or by close. And so that I'm vetting it at least two weeks before signing the deal. I'm vetting all this information because again I'm the nexus point of all this information. Typically people are working, like I said, in their own area. But now you as the integration leader, pulling all this information together, synthesizing it, playing it back to people and validating, hey, is this what I'm hearing? Is this true? Is this how we're going to move ahead? And then typically that leads to conversations of either yes or no or gosh, I didn't realize we said that. We better go go back and talk about that more and make a conscious decision. That's probably a couple of weeks before diligence because now I'm trying to finalize a kickoff deck and then probably a week before signing depending on the nature of the deal, if we're purchasing a private company or if it's a public company, we may kick off just internal integration kickoff where we bring everyone together and we go through again deal rationale, diligence findings, 90 day integration plan. @ least from our mind, from what we're hearing coming out of diligence and some of the key reporting and these types of things. We are playing it back now to our internal team to further align. And this is again a couple of weeks or a week or so before signing the deal. And then once we've got that aligned, if we get the go ahead, if it's say a private company we're acquiring, then we start planning. Hey, should we have an off site to get the functional teams from the target together and our teams to then start aligning on our view of initial integration plan and work with them to understand what are we missing, what are we missing? Is this realistic to accomplish? And that's where you get into this discussion with the functional teams and the counterparts. If you can do it pre close, great. If not, then you're trying to do that immediately post close, engaging the target, but close to signing. And before close, you're aligning everyone internally and going through each and one of the functional teams. Based on what you've heard and some of the early integration planning that they've done, at least for the first 90 days, you should have a decent sense of what you're trying to do. And you're playing that back to people so that everyone's on the same page and ready to start integration once the deal closed. At that point, then we start setting up either biweekly or weekly, in some cases every three weeks, initial integration follow up meetings to now start executing and in some cases either be with the target organization functional teams or it'll just be internal and depending on the deal size and the nature of it. But that's a process and relative timing to go through a lot of those discussions. But I think a lot of it is if you can insert and be a part of what the deal team is leading from a diligence perspective, then you're leveraging the existing meetings. You're not creating incremental meetings to focus on integration. You're actually weaving in integration planning discussions into the diligence exercise, which I think is important. You want to, if you can go a little bit deeper on diligence, just outside of check the box, there's no showstoppers.

You should teach a class on this. I don't know if you know, we run this M and A science academy where we get the best of the best to teach the next gen of M and A folks.

Well, I think you should get feedback from people that might hear this to see if I will.

If anybody's interested in having Don teach more. It's good stuff. You know how it is, throwing some visuals and templates and people get it a lot better. And you obviously get it. The kickoff part, when does that exactly happen? When you said the integration kickoff, I wasn't sure if there's multiple or if there's just one main integration kickoff during diligence.

Just iterate on getting all the messaging right and findings and risks and key things that we need to get done in each function in 90 days. And then I bring all that together with my team, if I have a team, and then play that back in one kickoff meeting. And in that kickoff meeting, it's really important to have the executive sponsor the deal lead and they're conveying the overall deal rationale based on that. Then I'm walking people through the governance model for integration early integration planning and timing for some of the key functions that can come into some of the key activity we need to execute on. Because there could be regulatory issues, information security issues, other things that you need to get done in a window of time to meet your internal compliance requirements or your infosec or your legal requirements. And so we want to make sure we're aligned on that. But it's one kickoff and we've got a semblance of an early plan.

This is before close, this is before.

Close, after sign, shortly after signing, so you're not wasting people's time. And then hopefully you don't have a simultaneous sign close because then you're just off to the races. But you might have some window of time, a week or a couple weeks or obviously depending on the nature of the deal, it could be several months. But that allows you more time to vet things and do even more planning. I've aligned at least at Light and Wonder. We're using smartsheets. We've built templates for each functional team for integration, so we have certain milestones that we've included. So that is part of a template. And then we weave in these unique aspects of integration or diligence findings into the plan for teams so that when they start, they already have a semblance of a template and a plan. And now they're massaging that based on discussions that they're having with the target team and further building out that plan as needed based on the unique characteristics of the deal. So we've got that prepared ahead of deal close as well. But it's one integration kickoff. We're going to then use our integration recurring meetings to then execute and report back on status issue escalations, incremental findings that we didn't discover during diligence that now are available because we have more people involved from the target or things that we didn't have time in that 45 days to cover. And you're uncovering by nature of just being able to engage more readily with people and then you're building those things into the integration plan and putting in timeframes and executing against that. And then you're the coordination point to drive those things forward, to follow up and so forth. And that's on the internal side with the target. We want to bring them into the fold. If it's a private company and everyone is legal and the deal sponsors approve it, we talk to the target leadership about it and we may even engage some of the target functional teams to help them get a sense of how are we thinking about it from our side and does our planning and timing resonate with them or are there things going on in their business that we need to take account of that may change our plan, timing, etc. Obviously, if it's a public deal, you may have to clear Hart, Scott, Rodino, you may have to wait till the deal is closed. You don't want to run afoul of gun jumping, these types of things. So there's not one answer that fits every case. You have a little more leeway with private companies and less with publicly traded companies where you have to be more.

Sensitive about the deal sponsor. If we go back to him and think about working with him and staying aligned, can you walk me through that journey? One, how are you prioritizing these efforts? Because the big thing I always hear gets missed tends to be around go to market integration. And I don't know if that's from your experience, you know, to really put a big emphasis in a certain area. And obviously this evolves or changes based on strategy and how you're going to integrate it. Anything else that we didn't talk about in terms of your relationship, because we did talk about the target side and working with their leadership and so forth. But on your team, your relationship with that deal sponsor, if there's anything we haven't covered on that.

Yeah, I think one important thing to know is typically the deal sponsor is more senior and they're really focused on getting the deal done. But then they need to go back to run a business and they have other priorities. I think it's really important to talk to them about who's a, I call it a lieutenant of theirs who day to day as a decision maker on that leader's behalf that I can engage with and put the marker at least 10 hours a week with that person because you, you do need regular engagement with the business. Because typically as an integration lead, you have a certain degree of knowledge about a business. Right now, for example, at Light and Wonderful, I support two publicly traded companies and three different businesses. So as you can imagine, you know a little bit about a lot. But you really need that key person who the business sponsor relies on day to day, who is a decision maker that as an integration lead you can work with and can be a part of integration execution, to have recurring conversations with them as you go through the deal process. I'll give you an example. So you know, at Light and Wonder, I also support SciPlay, which is our casual game company. We have a great relationship with their head of strategy. I engage with him on everything from deal model to integration philosophy, and we align on how we're going to do it. And then typically with private companies, he and I meet with the founders. We go through key corporate requirements, what we're planning from an integration side, and then we set up a recurring internal meeting and he stays actively engaged. And then we set up a recurring meeting with the founders that follows on from our internal integration meetings so that we can bubble things up and have a dialogue with them to say how things are going, how is the employee base? Are we overwhelming you? Here are some of the priorities. Let's make sure we're prioritizing the right things. Typically the deal sponsor, they're hot to trot to get the deal done, but then they've got to go back and run a business. Important point we didn't discuss is who within that business can work with the integration lead who understands the business really well, is a decision maker and can be a partner with myself, be part of the IMO to help coordinate and as we need issues escalated to the business sponsor or decisions, they can help take that back to the business. Because obviously they're typically in regular engagement with the business sponsor on other business matters, have one on ones with them and so forth. And leveraging them is really important and identifying that person is really important. If you want to make, make sure you're executing in a constant pace. Otherwise, if you're trying to rely on a deal sponsor, they become a bottleneck because they're so busy with other priorities. So I think that's an important point that we didn't discuss, but I would advocate for trying to identify someone within the business who has great knowledge of the business, is a trusted partner to the executive sponsor and can make decisions so that you can keep moving forward.

Who is that? Usually what type of roles do you encounter for that?

Depending on the business, it could be a head of product, it could be a quasi coo, it could be a person who is in a COO role, or it could be a chief of staff. I've seen any one of those be a key partner for me. And then to your point, if it's more go to market oriented, it could be a key salesperson in that organization. If sales is directly reporting into that business lead, it could be that person. Typically it's a quasi COO chief of staff who has their hands in a lot of things across the business and understands the business very well. And that's where as an integration lead you have a good understanding of the business. But obviously you don't have a deep understanding of each and one of the businesses. Not until you've been at a company for quite a bit of time and you've done deals in each of those business on a recurring basis. Then obviously you're learning more and more. But it's still important to have that person who's the right hand to the business sponsor involved on a day to day with you to tap into their knowledge, to help make decisions and also to help prioritize because both parties are still running businesses and you've got to make sure that the integration execution doesn't impact some of the work that's being done with the respective business.

What's the biggest challenge when getting alignment with business sponsors?

Part of it is getting their time, part of it is not getting too tactical, but staying high level with them in terms of value drivers of the deal, why we're doing the deal, et cetera, and get into more of the tactical discussions with that trusted business advisor that the executive sponsor is appointing and then you can go deeper in some of the more tactical execution matters. So I think a lot of it is time and again they're so focused on getting the deal done right, sometimes they haven't had a chance to really step back and talk about how they want to align both companies, etc. Now, on the flip side of that, I've had some really good experiences at Light and wonder with our iGaming team where the executive sponsor and CEO of the business is very engaged on tactical matters and has thought through his vision of not only why he's buying the company, but his view of what we should focus on and how we should integrate. That makes it much easier to have these dialogues because then I can have more tactical discussions with that person. But it all depends on what is the span for that individual, how senior they are and just how they operate as a leader. Some people are more engaged tactically, others are just focusing on the higher level. Nothing wrong with that. But it's all depends on that leader and also their span of control, which can be sometimes quite large.

You're making all this sound way too easy.

Nah, yeah, it's not. It's painful. That's why you go through iterations. And sometimes the integration lead has to be a thorn in people's side in a professional way and of being dogged on some of these things and keep raising issues until they're answered. You don't want to just let them fall off, but you have to use the gauge of is it really that important and is this something worth continuing to probe over the years, you gain that type of experience where to push, where not to engage, where you should place your priorities to get answers or just let things germinate on their own timeframe. It's never easy. It's much more complicated than we talk about because you're dealing with people and anytime you're dealing with the human ecosystem, it's difficult because there's sensitivities to these discussions, there's complexities, there's implications potentially to people's job. You've got to factor these things. It's not just, hey, we have a plan, we're going to execute it and we're going to get this done. Outside influences, politics and all these types of things.

So how do you navigate all that?

That's another discussion.

The people issues. What are surprises? I'm always curious that you've done this for a number of years now across all these firms and deals. I'd like hearing the interesting stuff. What are surprises you've encountered?

Two examples. One, we acquired a company and we had an aligned integration model, but then the business sponsor wanted everything to run through them, to set up meetings with the target to manage information. And that just doesn't work because everything falls apart because that person is not focused on these things and doesn't have the time for it. We're trying to run this company standalone and give them a lot of leeway because there was an earnout and so they didn't want to engage on these corporate matters that we needed to manage to. So it was a very surprising and a very interesting scenario because I haven't had that that happen in all my time of doing this work where you're getting resistance both from the executive sponsor to engage and then the target companies feeding off of that and you're trying to break through because you have these certain things that you need to get done. And that poses challenges to the point where we had to escalate to our senior management team to unlock things so that we can move ahead. So that was quite surprising because we had originally engaged aligned on an engagement model.

Is that like all ego or what's blocking that?

Some of it had to do with personalities of the target company and a prior relationship between the business sponsor and the target CEO. Like I alluded to before, there's these, the human ecosystem and relationships and politics. And so it created some unique barriers. And that's when as an integration lead, like I said, there's certain things you got to push on and this was one of them because we need to meet certain corporate timelines from a legal compliance infosec standpoint. So you can't have this. We're not doing anything. And so that's when I had to like rally and get alignment from leadership of the functional teams because I can't put my head on the chopping block. I've got to make sure that leadership from the functions are seeing it the way that I am and they're supportive of me escalating to our CEO CFO in a steerco meeting. Once I got them on board, then I'm more than happy to bring this up and escalate it. But I can't go out there alone with nobody's support because that's, that's not smart.

Put yourself on shopping block. Yeah.

Then the other surprising thing was we were buying a small startup and we wanted some feature functionality and technology that we were going to integrate into a product. And the business sponsor, myself, we were the functions, we were well aligned on what we were going to accomplish. We wanted to integrate this technology rapidly. That was the focus. Our CEO, once we had aligned on that, our CFO came in and said that's nice, but I'm going to incent the CEO and his sales team to continue to sell to their legacy industry and try and incrementally grow that revenue stream because I've got deferred revenue where we're trying to integrate this technology into. And that just completely tore our priorities in half. And we weren't able to execute well on either side. So the CFO was putting short term revenue ahead of long term strategic imperative of why we were buying the company. And that was an absolute recipe for disaster because we also didn't get funding to execute both well. And teams were misprioritizing things because you had The CFO telling a CEO like yourself go do A but yet the executive sponsor and the product development team telling the head of product and the CEO go do B and focus here. It really created quite significant issues. We weren't able to manage well on either side. That's when devalue arose.

Yeah, exactly.

And you start losing people because of it. Which we did.

Great examples. Real quick, you got advice for new M and A integration practitioners.

Some things I alluded to earlier is if you want to get into integration, focus on getting a lot of broad experience in different areas of a company or companies. Get experience in product, get experience within a business, being a chief of staff, get experience in finance in an area, get multiple experiences. Because as an integration leader you need to understand a little bit about everything. And if you want to get into integration, then you can apply that knowledge as a base to then grow from in understanding all these other areas. If you're interested in getting into this type of role, do a number of different roles or lead a PMO or lead strategic initiatives where you're working with a lot of cross functional teams. Because that's what I'm doing day to day. The other thing is what I mentioned before. Listen first, understand things. Be someone who can cobble things together and put the puzzle pieces together. So you gotta be able to think strategically but be able to execute tactically and have a good attention to detail and then just over communicate because you're the coordination point and what I call it, you're the shepherd of the cats who are running around and you've got to coordinate and communicate and keep everyone on the same page. Getting a broad base of experience in different businesses. Be a good listener, be a good partner, get to know people on a personal level because you have to be an influencer. And that's the only way you can do that is if you really get to know people. Because most of the time you don't have people reporting to you and over communicate and over coordinate. You can never be faulted for doing those types of things. And it's really helped me be successful because then I've been able to follow up and make sure that we're executing and keeping people coordinated and continuing to move the needle forward. So those are some of the tidbits I've learned over the years.

Don, what's the craziest thing you've seen in M and A?

Not too much craziness other than what I talked to. This now I've never come across this resistance before to engage on both sides the executive sponsor and the target company both putting up walls. And I'm part of a publicly traded company and you've got to be able to execute with a private company certain matters. From a legal compliance standpoint, you can't not do these things. So you've got to have buy in from your own leadership team and the target that, hey, there's a certain set of corporate requirements we have to implement. That was one of the most, I don't know if I call it crazy, but the most interesting and surprising things that I've come across and I've been involved in probably 50 plus deals and several joint venture setups and wind downs. Yeah, this was pretty interesting.

All right, Don, I appreciate you taking time. This has been a lot of fun. I learned a lot. You're helping me become a better M and A scientist.

Happy to do it and hopefully it was helpful for people on the call.

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