How to Stand Up an IMO Function

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Joining me today is Josh Zakin Staris.

Head of M and A Integration at Zura. Zura provides solutions for subscription management. They trade on NYSE under Z U O. Today we're going to talk about how to stand up an IMO function. How's it going Josh? Very good.

Good to be here. Kasam.

Thanks for taking the time to come hang out. Can we kick our conversation off a little bit about your background currently at Zuora?

I've been there a few months now. Was previously head of M and A Integration at Hoppin, before that at Lyft, was on the integration team at ebay. Was a lawyer once upon a time as well.

Wait, wait, back up. What prompted you to go from law to M and A integration work?

I do find the legal background comes in handy, but I went from the legal profession into consult consultant because I wanted to be closer to, let's say where the action is. Is very interested in being a part of business and there's a natural progression for me working with clients to eventually joining a client. And I joined ebay after working on the PayPal split. So I was very excited to be part of that and then to be part of their team going forward.

How do you talk yourself into a job to go from the legal side to this?

That's a good question. I got pulled over. I will not intentionally brag but it was not a sales pitch on my part. But they liked the work so they asked me to join.

I'm just trying to think of that person. Where do you go to? I'm going to. Let's get one of our lawyers to come in and help out. We're shorthand.

I was there as a consultant helping management consulting. I was on the Deloitte team basically organizing the separation management office at the time for ebay when it was one company working on how to do the split of PayPal. So I was doing work very close to what I ended up doing once I was part of their integration team at the go forward separate ebay.

Yeah. And you got your foot in on a pretty interesting project.

It's good timing.

Why would a company need an imo?

There is a subset of acquirers that absolutely need one and most ongoing long standing acquirers already have an IMO in place. So you're looking at often maturing companies that are pivoting their strategy potentially to be having more inorganic growth. And within that it's companies that expect to be doing upwards of a couple of deals a year. You need a baseline kind of throughput to merit having an imo. To have that muscle to be continuously improving processes around M and A to de risk enough deals that you get your value for having someone, at least someone dedicated to it.

Does every company. When should a company start thinking about standing up this function?

In my opinion it's better to start sooner rather than later. Once you know that part of your strategy to get someone in place place to start the practice, share expectations, build thinking around what an IMO should look like for that particular company. Otherwise they're going to come in a little bit too late after you've already closed a few deals and realize wow, I really wish we'd had someone to help smooth this out on the front end. Or you're going to have someone sitting around building capacity they're not really using and that's just not an efficient use of your cash.

We're going to role play this a little bit. I'm the CEO and you've worked with a lot of these companies especially similar role now emerging company managing a lot of organic growth and then acquisitions become part of the strategy. They got a lot of capital to invest. Walk me through that as the CEO of the company. Okay. I gotta go through thinking more serious about building an M and A function. I bring it ahead of corp dev in one, it's whose problem is this? Because we've done a couple deals and we realize integration's easier said than done. Love to get a little bit of help to think this through here. Josh, I heard you're the guy that knows all about doing this perspective wise.

If you want to de risk new deals, it really does behoove you to have someone in seat on team who understands the overall business, has relationships with key functional leaders, is tightly enmeshed with the rest of the corporate development team so they see what's coming down the pipeline, understand the overall business strategy and can help connect all the dots. Serving as a central coordination point is often the way I've talked about it. We talked about it when I was all the way back at ebay. That just ends up being a central switchboard for how to think about how to do deals leading into execution. And if you have that baked in up front, the old cliche is an ounce of prevention's worth the pound of cure. If you have all that thinking baked in up front, you have alignment early on in the deal process on the execution side. On the back end, you're much more likely to hit your strategic rationale. You're much more less likely to have disruption to the existing business or the business you're acquiring and achieve those synergy targets that we all like to think are accessible.

That's a pretty good case for having an imo. What are there specific problems that you can think of having this would prevent? Or even just some lead indicators when you see companies are like all right, we should get an IMO having that.

Pipeline of deals Also I think it depends on the type of deal you're going to be looking at. If you're, let's say like Compass Realty was doing a lot of very small acquisitions, repeatable acquisitions of realty companies across the country. Maybe you don't need as strategic thinkers in your IMO as you would for a company that's in the tech space. Acquiring complex products, looking at adjacencies, looking to weave to operating companies, not just building a plane mid flight, but connecting two planes mid flight into one plane that's going to continue flying in a new direction. So that should inform how you structure it and the kinds of problems you're looking to solve or that you can de risk up front, are getting alignment between your product team, your GTM team, making sure that all of the different functional leaders, when we'll call the back office across hr, IT accounting, understand the business rationale in a more intimate way than if you just get everyone in a room and expect understanding to arise from conversations between people who maybe don't work together all that much on a day to day basis. You get that over time by having someone typically dedicated to making sure that those relationships are built and bringing people together, setting expectations around what it means to collaborate on integration.

Really putting together a program that can help.

Yeah, a team within other teams or across other teams.

Are there certain things. You ever hear that companies that have done deals without an imo, which tends to be where you start with that there are certain clear problems, there are certain things that really stand out as whoa, these are the big issues that happen.

I'll kind of flip that a little bit and think about it from the perspective of what I have top of mind is touch points or things to validate in any deal when I'm getting involved. So it's things like you said, go to market integration. I think about performance metric setting for the deal and for individuals participation, team participation in the deal. Sometimes a lot of that can be unspoken or if it's understood, it's only understood amongst part of the leadership team or part of the overall business. Communicating the strategic rationale. I said that before, but I'll say it again. Communicating the strategic rationale to everyone who's involved in the process. If you think about how like one of the great advantages of the US military historically was that we gave a lot of discretion to the lieutenants on the ground, people who are actually making contact. The same analogy holds true in M and A and I think in any complex project. But the more that you can communicate the core philosophies and objectives of the overall project to the people who actually have to make day to day execution level decisions, the more equipped they're going to be to be successful. So that's a huge part of it as well. And that goes into having good kickoffs and people attending them and then making sure there's a process by which that information gets disseminated downwards. Another just good example is setting clear expectations with the acquired leadership about what their future role will be, what their possibilities are for advancement in the organization, how their teams will be affected. All that stuff may happen on its own without a dedicated integration leader, but an integration leader should be the kind of person thinking about these problems every single day and just nudging people in the right direction. Grabbing someone in a holly conversation over a quick chat to make sure that everyone is on the same page about the importance of these things, which individually may not make the difference but in.

Aggregate or critical, I'm hearing that rationale to make it really sticky and clear to everybody throughout the deal process. You're building a function that's retaining lessons learned so it matures and gets better, faster. And then that part about engaging with that target company's leadership so you're really helping to problem solve, be there through that process and transition for them. Is it very clear connection that this enables faster value creation? Can I go as far as saying greater value creation?

I think yes. One function integration lead or an IMO function can play is in setting more realistic expectations. And that has positive knock on effects at the end of the day too. But if you are able by having an imo, which I think has enabled us to bring all the right voices to a conversation, in diligence and in planning, you get more clarity around what is actually achievable and when. And you can de risk things that might obstruct value creation. So it's both setting targets that are more achievable or more correct, orienting on maybe what the strategy should be if the original hypothesis is not correct, and then pulling obstacles out of the way so that you actually get to where you think you're going.

I heard that leading M and A integration is the most thankless job in.

M and A. I don't know about that. Interesting. I think a lot of the reward for me is seeing other people succeed. And I do feel like I get acknowledgement from my partners and the value that I provided and continue to provide. So I don't feel unthanked. Also, I'll just say I'm competitive. I like to win and I like to win as part of a team. So for me, if we get through the project, we close the deal and keep the people deliver the new products. That's a win in my book and I feel like a success. Even if maybe no one's holding parade for me specifically. That's not what I'm in it for.

Okay, now this is good. We're going to unpack this because I don't always get that same response. My immediate thought is how well integrated you are into corporate development. Before I get into that, I want to get a sense of who do you report to? Is it different like company to company? What does that structure look like? Who's ultimately responsible for hiring you to build imo?

All of my prior roles on corporate development teams have either been originally reporting within an integration team that itself reported to a head of corp dev VP corp dev typically, or reporting directly to the head of corp dev and that's generally been true. There have been times right now, for example where I reported directly to the CFO or to the VP corp dev when there was not the role in between. But generally the structures I've worked in have been that integration team was part of the corporate development team, was typically part of finance, not always. I think there's good reasons for it to be different. For example, again, if you're expecting to acquire and integrate many small companies or do lots of tuck ins many acqui hires for example, then having your integration team sit in maybe an ops focused organization or for whatever other reason kind of outside of the corporate dev team is fine. But if you're going to again do big picture heavy on the strategy complex deals which not one to one from deal to deal, then I think there's a lot of utility in having the integration team sit within the corporate development team or at least report to the same leader so that your incentives are aligned and so that there's much more openness to being frank and honest about both what's coming down the pipeline and also to the extent that you need to get aligned, share feedback course correct when things are not always perfect to tell correct for those problems when they arise.

Would you ideally report up to head of corp dev or CFO or wherever it rolls up to?

I'm comfortable with either. I think it depends on the seniority of the person in that seat and Right the size of the company you're looking at. So for a larger company, your head of corrupt dev is probably going to be more senior and I'd expect the head of the integration team to report to them as well. But if for whatever reason the head of corp dev is newer in their seat and the head of integration is a more senior person, then maybe there's a reason to have them both report to the same person, at least in that setup.

Okay, yeah, just another area I saw is pretty inconsistent company to company. When you look at the maturity of building an M and a function and there's always limited capital allocation for it and this sort of goes to where do you invest in? Do you focus more on integration hires versus the deal side? How do you think through and balance that out?

What are you trying to do with your pipeline? Do you feel like you're not getting enough deals at the top of the funnel coming in or you're not getting the right deals? You feel like you need more leverage on the deal side of the team then naturally you're going to want maybe to Bring another analyst in as the incremental hire. But if you do, like we were saying, want to build out a function that will improve over time, if you want to make sure that your M and A function continues to grow and mature, there's a strong, I think, rationale to be made for bringing on at least one integration leader starting that IMO office. Someone who can do performance tracking, deal to deal, who will stay involved to make sure that happens. Like we talked about, building consistency in the process. And also typically I find the integration lead is the right place to house the lessons learned process both for the deal and for actual integration execution. So because they're naturally involved post close in a detailed, direct way, I do think the IMO is the right place for that to happen. And I think there's a great amount of value in having that kind of be a dedicated ongoing activity for the team as a whole.

I still get this sense that most companies don't think about standing in IMO until they've had some damage control scenarios they've gone through.

It's something how you don't think about confidentiality too much until you have a leak.

Do you see that? Have you been there where it's like, hey Josh, we got a situation. Or this is some issues we've had in past acquisitions. Is that typically when you come in and you're standing up in imo, is there some, hey, here's some stories about some things that happen or you get somebody that kind of comes out of the corner, hey Josh, I gotta tell you something here.

Yeah. Every time I've come in to an organization that didn't have an IMO before, which is three times now, there have been deals that were closed that had issues post closing. But every deal has issues post closing. I'd say most likely they would have been mitigated to some degree if there'd been an IMO on the front end. And I think a lot of those issues were the rationale for why a role for that I eventually felt was created or the rationale for having an IMO in the first place was the company saw those issues, the management team saw those issues arise and they realized if we'd had a dedicated IMO function here, maybe this wouldn't have been as rough as it was. So I do think that often led to the mandate companies can benefit from learning by others example and set up an IMO on the front end if they again know they're going to have this pipeline or expect as part of their strategy that they're Going to have a pipeline of deals.

Okay, yeah, fair enough. Don't overlook this one or something. It's almost like you can campaign to get an IMO set up sooner than later.

Agreed.

Let's talk about the who who should be leading this initiative of standing up the function. Do you hire the third party consultant to do it, get some out of the box help, or do you bring someone up in house that's got project management knack and knows the business?

I think tools and templates are always helpful and because we're talking about understanding the business, understanding the strategy and also having a voice in those conversations is a critical part of the value that IMO can and shouldn't bring. I personally believe it's right to bring a person on board, whether that's in house or from outside the company. And if you're going to bring in from someone from the outside, again, ideally it is somebody with M and A background. Obviously the benefit you get of elevating or transferring a PMO style person or OPS style person into this role or even somebody who's coming from a function specialty that happens too into the role has the benefit that they know the company, they've got relationships already. So I won't discount that. I'll say if you do that or bring a more PMO focused person into the role that I would bring on some help, someone who or some team that has experience doing lots of reps in M and A of the type that you expect to do so they can start to share some of this institutional knowledge that you just don't have organically around. What are the trouble spots? Some of the things I talked about earlier and accelerate the learning process for whoever is now running that IO. So I wouldn't just bring in an outside company to kind of drop a sheaf of tools, templates, frameworks on someone's desk. I would make sure there's someone who's going to own this going forward on an ongoing long time role because that's the benefit of starting to build understanding of the process so you can improve on it and relationships so you can grow them.

I like that view of being able to pull someone in house because you'd have benefits of them knowing the business and people to talk to and then supplementing them if needed with external resource. Is there any other resources to help prep somebody to do this kind of work?

It's so much of it is learning through doing and that's certainly how I did it. I think you can benefit actually. I'll plug some of the materials that you guys put out. I do find value in things like this, conversations like this, the newsletters, et cetera, to give you some of the high level places to dig deeper or provoke thought. When I participate in other networking for all the time, talking about problems I'm having, asking for input. So I would strongly encourage folks who are getting into this realm to participate in those fields, in those venues as well and have take the opportunity to connect with people, ask them to have one on one chats and share some of the problems you're having. Ask how they would address it. To me, again, experience. Experience is the greatest teacher. So benefit from other people's experience as well.

I think the network part is really important, is build that network of peers up. Because even running a company I find it extremely helpful just knowing other operators in terms of learning from others. If you wanted to learn from another peer that's maybe got a little bit more like extra 5, 10 years of experience, what would you want to dig in? Would you really want to know? Tell me the war stories of stuff you screwed up really bad so I can make sure I don't do it. Or do you have any guiding principles that you follow? What would you try to extract out of them?

I'd say everything is context. Before I would ask someone else exactly how they're doing, what they found to be successful or problematic, I would try to understand the context in which they're operating. What kind of company is it, what is their leadership structure, what kind of deals are they doing, how experienced are their functional leaders and how close are those relationships? Because without that context, all the lessons may not be directly applicable. But if you have the context, then you can target and interpret and translate the input to your situation. And similarly, if you give more context to the person talking to, obviously they're going to be better able to communicate in a way that applies to what you're going through. If you're going to ask questions, great. But if at all possible, give some background around what questions you're asking. And also make sure you're getting that from the person you're talking to. Even if they have 15, 20 more years of experience than you. Maybe they never worked in a early stage maturing company. Maybe they've only worked at a very large acquirer that has deep routines embedded over decades of experience and specialists on specialists in M and A in every function. And if that's not the context you're offering, and some of that advice may not be on point or at least should be taken with a little Bit of grain of salt.

I like that. Framing the right context. We'll do that. We'll get back onto standing up an imo. What are the steps of standing up the function?

It really begins with understanding the people I'm working with. And this is foundational for any leadership role. Talking to everyone who's on a leadership team that you're going to be connected to people adjacent across the way. But I actually tend to go pretty broad from an IMO perspective. I set a goal for myself of understanding the organization better than anyone else at the company. And I know that sounds potentially wildly ambitious, but really talking to every leader in every function, because every function is potentially implicated in M and A to some degree, understanding their perspective on their scope, who their key leaders may be for M and A and their expectations for their participation in M and A gets you off to a running start that really nothing else will. And I find that when I'm helping my deal team and identifying who should participate in due diligence, now I've got my own independent perspective, which is asus. It's just so helpful because now I get to make a call of do I think that this particular leader who maybe is a niche player from other people's perspective, should I check in with them? Should I ask them questions, even hypothetically about a potential deal, to get a sense of whether they should be involved in this process and how soon? I get a lot of advantage from that and honestly engender a lot of goodwill from those teams who maybe on prior deals were left out or left behind or felt like they're input wasn't listened to. Now I'm coming to them from an attitude of wanting to learn, wanting to engage, and it really pays off. So building relationships is key. I tend to spend the first three to six months heavily focused on that alongside either working on deals to the extent that there's active deals or more focused on building some set of playbooks if there's an existing corp dev playbook, reviewing that, building that up from the integration side, if there's not, obviously helping the deal team put something together that we can then workshop and take on a roadshow around the company as well as part of building relationships ultimately with an eye to getting down to. I really like to have functional level playbooks for finance or even within that accounting, FP and a Treasury playbooks for it for HR that define what their role is, who on their team, or at least what roles on their team are typically involved and what the expectations are for each of those roles and then what are typical buckets of work within their work streams that they should be tackling and what their general approach is for integration. The kind of 8020 rule of going into a typical deal, whatever that looks like for the company in question, what their presumptions would be about how they integrate, whether they bring people on board right away, whether they move contracts over to the company's own paper right away or after 30 days, just what are those baseline assumptions and then critically dependencies identifying up front what the general M and A related dependencies are for integration across functions. So HR is always going to be on the hook to provide a master employee list to IT so that we get everyone onboarded into IT system. Same for getting them into the erp. Things like that that are just always going to come up or almost always going to come up that everyone should have in the back of their mind for their function because they know someone else is dependent on it for success. So getting those embedded into a functional level playbook across what I'll call the core teams finance it. Hr, legal early on, super helpful. Now the next time you do a deal, the idea is you share those across all different functions as well. So you, you set those expectations for the whole team. Everyone now gets a better understanding of what their counterparts are doing and what their counterparts are expecting from them. And I find it really smooth things out.

People in playbooks.

Yep, people in playbooks. Sometimes there are some teams and some leaders that view process as a dirty word. Really the focus should not be on process in these kind of conversations or these playbooks. It's about expectations. Right. None of the things I said are about A, then B, then C and always. Thus it's much more about who and.

What get to know the people, understand who the key people are, what their expectations are around M and A, basically when and where they fit in. You're learning, you're asking a bunch of questions, you're learning, you're engaging, you're trying to get what are some of their ideas of things to do better the next time around. You spent a good three, six months doing this upfront as part of standing up the imo.

Absolutely.

And then the playbooks are starting to build out and populate some of these. It sounds like these are kind of the core kind of functional things that you do. Because I'm trying to get a sense of how much you can actually prepare for an integration without having an identified deal. We get asked all the time at M and a science for integration template like you build it as you do your diligence in the deal and learn about what they have there. So where's your thinking on that? Like how much of this can you actually pre plan versus what actually gets planned along the way?

I do have a checklist for me which is all the possible things that may come up that I either should be aware of or participating in. But that's for me I don't have a checklist because there isn't necessarily a checklist or if there is one, I would expect other specialists in those fields to have their own specific, much deeper knowledge of what they want to put on that. But I do have my own kind of in pocket or back of the envelope list of making sure I'm involved pre loi I understand everything's coming in the pipeline and then pre sign I have a certain set of slides that I want to make sure I at least consider putting in the deck for approval and make sure that I'm aligned with the management team on what they expect to see that step. So I do find that having that kind of level of details helpful. That's my process though in terms of other things to build, I do like to basically align everyone to an integration approach at a very high level and so I'll have examples of what that looks like. But again, because deal to deal is typically very different. Unless you're a company again doing more cookie cutter or repeatable acquisitions of companies that are of a very similar size or scope, investing upfront in a template or standard example of that is not necessarily worth the time.

Oh really?

Most of the places where you're going to need what I'll call a heads up strategy focused imo, that's because deal to deal is going to be very different. In that case, unless you're doing a dozen plus deals a year and you have the ability to segment them, categorize them into different buckets for which you have different plays, that's a certain level of maturity most places are not reaching when they're just standing up their imo.

There'S a big fluctuation in the strategy you're executing on that changes the depth of integration between are we not integrating? Are we doing partial, full, transformative?

Yeah. So again, unless you're doing a stack at one of those types year over year defining a set of expectations just for that particular type of deal, it's probably not worth the investment.

And then when you talked about mapping dependencies, some of that is just here are some clear obvious things. But then again, project plan progresses with with everything you're executing on, then that gets a little more messy.

Yeah, you refine it. I do have template M and a milestone plan that just has most of the things I would expect to see based on the company I work for. But I build that, customize that, and take input to that over time with my function leads at that company. And we collaborate on it together to arrive at something that's pretty custom, pretty tailored for our particular setup. If I tried to take that to another company, even of a similar size and scale, their operating practices may be different, their functional structure, their reporting lines may be different. So it's not just a one to one. And yeah, that's why I say it can be helpful to get tools and templates from a third party when you're standing things up. But always look at them critically and think about how much of this really applied to my case or my team's case.

Do you do integration charter?

I've gone both ways on this. I think the larger that your teams are and the larger the deal is, you get more bang for your buck on charter.

Or can we break down what a charter is? Because this is done for each deal specifically. Maybe you can walk through what goes in there.

I've only done it sometimes, but for me it's like who's on the team? What's the goal of that particular team? Typically I do it by work stream. If I'm going to do it, what are the high level outcomes that team is expected to accomplish and by when charter also. And there's different styles of pmo, but those are the kind of the core pieces I would expect to see. I've only done it on the biggest of deals and I'd say those are on the rarer side for me. I've done a lot of what I'll call complex deals with 200 to 250 people on the high end, 20 people on the low end, anywhere from one to 45 countries involved. Everything under $500 million.

What would you do to keep the rationale alive and clear? I'm thinking that's like a tool or that's a tool used for that. But if you don't do that with other means that you do to preserve.

That, I think there's so much advance in having a kickoff discussion with your work stream leaders, their managers and key team members from their organizations. And then I set the expectation with all of them to hold a kickoff similarly for their broader teams. And I always offer to be on those calls as well, just to make sure that if they feel like they benefit from having someone there to repeat the key strategy information or walkthrough expectations if they haven't done deals before, especially I'm happy to be there or they'll encourage them to include me. Just that. EECS work stream also gets the same messaging around why we're doing the deal, but frame focused on their area.

What do you talk to during the kickoff? What's your outline look like?

Confidential expectations, upfront background on what the target is and then the strategy for the deal, why we're doing the deal, all the basics around their location, their product, basic finances and then looking at what is our objective coming from the strategy, what would we do with the product or what adjacent sees is going to open up for us. What is the overall timeline for integration? Sorry, I should have said kickoff. I'm talking about diligence. Typically I would do this in concert with the deal team and so they'd first talk about the timeline for diligence and once we talk through that expectations for diligence, expected outcomes in terms of findings, then I'd talk about timeline for integration, going in hypotheses, what we want to test as part of diligence and then from there just really clear expectations around what are the templates they're going to be filling out, what are the due dates for their homework if you will, and making sure they understand how we're going to engage with the target in terms of getting information out of the data room, basics around that we'll want agendas, want to set up meetings and they'll need to be proactive, working with us to figure out what that structure looks like, what questions are not necessarily answered by what's provided in the data room. And then ultimately I do like to explain how the information they're providing will be used. What is the management team going to look at? How are they going to make their decision? Is the board of directors going to review? What about governance for smaller companies, which is to say serial requirers that are still doing a couple a year that are maybe more than 10,000, 20,000 employees that aren't doing lots of billion dollar deals? Typically it's the management team or some subset of it that ends up being the top of that governance structure. What I like to do is set the expectation that a management steer co is meeting on some regular cadence or only as needed and that really comes down to what the management team prefers. Below that, the model that's worked for me in the past is pre close. The deal lead for the deal is Running like a weekly diligence focused conversation. And then we'll hand off into a weekly integration focused conversation that I lead with the functional leaders driving or workstream leaders driving each of those processes. Typically the same population, very similar from diligence into integration and then the cadence for integration starts to decrease as people finish their milestones, as we get out of the first 30 days, first 60 first 90 days and eventually going mostly offline or completely offline for long tail integration items that to me provides enough visibility for my partners and up to escalate risker issues as they arise or address them outside of quick calls. And then the feeder into those conversations is for each of the work stream leads or function leads to be having similar meetings with their teams, their SMEs as we go through diligence and then into integration execution to do the same kind of thing. If they can address a problem within the function, great. Or if they can go one to one with one of their peers to address a problem, great. Otherwise make sure it's communicated, escalated to the next tier. So tend to keep it pretty simple, kind of those three layers. Again, if you're in a very large organization, this conversation is probably not as applicable for you and you have an existing governance methodology, but for anyone that's looking to set up an imo, I do like to kind of keep it sweet and simple.

You talked about decision making, problem solving. It varies company to company. But is there anything that you do in your role or even as IMO to set expectations around how you make decisions when you've got to go through an integration?

I'll reach back to the relationship building piece of this and the getting to know people piece of this. Because again, it's just so context dependent understanding. Yes, there is the reporting relationships we have in our HR management system and we know who is technically a supervisor to whom. But having conversations with the individuals involved to understand who's the technical expert in a particular area, who has political capital over a particular project or decision. That granular tactile information, you can't buy it. It's so useful for me. Who gets to make the decision or how a decision gets made is informed by that understanding. Better for me to talk to the chief of staff of this particular leader as opposed to going directly to them or as opposed to holding a larger conversation. Or I can have the conversation with the chief of staff to help decide what the next step is. So for me, just knowing the people involved, their personalities and their perspectives, their priorities, one of the things I make sure to ask when I'm getting to know them and to stay up to date on it as we continue to build that relationship. That's how I help enable decision making. One of the things that most surprised me about being in this role early on, even from a much more junior place in my career, was how often it felt like I as the integration lead was really influencing or guiding the answer to that question how a decision gets made. And often it was just a matter of exercising business judgment based on understanding of the deal and the overall strategy and goals for the company. So I sometimes felt like I was in the driver's seat for some of those decisions, which was surprising. But everyone seemed to appreciate the role and the outcomes.

When I think about structure, I think of your people allocation because you're working across all the functions and it doesn't sound like you got full time resources galore. I'm trying to get a sense, how do you think through that of making sure you got to know people. But now here's the deal. Do I actually have the hours of these individuals to dedicate when I'm talking.

To the function lead in that first instance, building relationships, I'm understanding who on their teams is theoretically available for M and A. Is anyone assigned? Are they expecting to hire someone to be dedicated if not? And who's on deck if they don't have a dedicated person? And what does that person's day job look like? So I have a sense of, to your point, what percentage potentially of their week or their time I could draw on? Or is it even possible to pull them away full time to work on a project? Do they have backfill available? And if not, then I start offering potential alternatives, exploring whether those are realistic to bring on consulting support to help with performing operational work day to day duties. We could free up one or two people to dive in on diligence and on planning. And if that's not possible, we flip it and we bring in someone from outside to help with diligence and integration planning, which is not my preference always. I'd rather have somebody who knows the business from the inside driving a leading than having to bring someone fresh who doesn't have context. But that's a conversation I like to have with the leaders involved, with my partners to make sure that they're comfortable and we're all marching in the same direction. It's not going to be workable typically to impose a solution on anyone without consulting them first.

Going back to how you insert yourself or work with corporate development, what does that look like how are you working with the head of corporate development, getting your seat at the table and being there when you need to be.

The rationale for having an IMO is typically been made by the time they're looking for someone. So I don't often have to sell the big picture like the conversation we're having here. But there are places where I do reinforce, I think some of the value. One is always making sure the IMO is involved pre LOI to understand pipeline. So that's something make sure I negotiate, if it weren't already understood. And I'll even have that conversation in interviews just to make sure that is at least openness to that being the working mode in terms of participation, diligence, making sure there's alignment there. One of the key roles an IMO can and should play is making sure that the right teams are involved or members of those teams, like we talked about. Some of the value of doing that. And then expectations around the role of the IMO and performance setting or deals for M and A generally because that directly can tie into performance objectives for specific leaders. The sponsor of the deal most especially getting clarity on kind of those pieces of the role I think are critical.

I guess that's the big thing. I always hear from integration practitioners. They want to get involved earlier. Sounds like you pre negotiated that as part of the employment agreement here. Yeah. I'm just wondering if there's any advice for the integration leader that may be struggling with that.

Specifically it behooves to kind of put a B in people's ear. This is a tactic I use for all kinds of things. But talking through in the context of challenges that your company is facing, how they might be alleviated by changing the process to give you more visibility, if that's what you need. Or to have a venue for decision making wherein your input is naturally appropriate. Whether to have a formal LOI review step with expectations from the leadership team about what they're going to see in that package of materials, including potentially a draft performance tracking document like a scorecard. What are the metrics in that scorecard? An integration approach, an estimate on integration budget. So if you get alignment that those are things they feel would benefit from being in those materials, then the ask is coming from them. It's not something you're trying to push or force into existing process. It's something you can offer to the key leaders, to your corp dev head of corp dev as possible improvements. And then that creates a little pressure. It draws you into the process to participate because you need Input to be able to prepare those things. So if they're expecting to see certain outputs from you, then naturally you have an obligation then to ask for whatever it is you need to prepare a realistic or accurate set of assumptions to generate those materials. And similarly, if you're looking at approval to sign, refining those things and having some kind of summary integration plan is really natural view on what the org structure is. That's something I like to bring into the conversation early so that you can have a point of view that you're actually testing in diligence as opposed to expecting it to somehow arise out of conversations without having a starting point or frame of reference that everyone is looking at on the same page.

Provide the clues and let them come with their conclusion.

Yeah, and I love making things that are wrong or very likely to be wrong and putting that in front of people, not intentionally wrong, using the best assumptions and understanding that I have, but knowing that's limited. Putting it in front of the people who need to make the ultimate decision and letting them react to it positively, negatively and then take it, own it, revise it and make it better, then it's not something I own, it's something they own. But it does provoke a better outcome.

I see a lot of companies that have a pmo, they're running integration through a PMO and right the special projects team that's doing all kinds of stuff and they come to that realization because there is the whole case about what we talked about, independent learning and things like that. Is there a way, if you experienced that, of transitioning from PMO to imo?

I haven't done it exactly myself except arguably coming in management consulting. There's a period where I was, I'll call like a general purpose consultant and then started doing more PMI projects, got involved in more M and A activity to transition a PMO to also owning IMO responsibilities or becoming having a person on that team or becoming an IMO overall. The question is just from a starting point, what is the IMO's capability set like today or a particular person's skill set like today? Do they understand how the company's operations connect? I'm talking interoperation, the cross functional element that is endemic to any M and A. So what does finance do with it? What does it do with the HR team? How do the functions work together? And then a grasp of the overall business. Because part of the benefit, the value that IMO function provides is looking critically at the business case and contributing to it either by asking insightful questions or asking to test certain assumptions, hypotheses, asking for the data, questioning the data that justifies the financial model. For example, most PMOs may not be doing that today, and if that's not the case, then that's an opportunity for coaching, growth and development, but also potentially outside support to assist in that process. And like we talked about earlier, pointing out typical trouble areas in integration, planning, execution, and the kinds of fact patterns that your company might be looking at in M and A, you could bring an outside advisor, I think could help at least illuminate what those areas might be.

There's a lot of distinctions there, and then it goes to bring in a person that can just start creating the function.

I'll add one other thing. There's a need for political capital, and I'll call institutional respect in order to influence leadership and guide the overall team. And if the PMO function to date has a mostly tactical role of making sure that people are agreeing to particular milestones and then executing on those milestones on a cadence, they're also going to need this ability to whisper in the ears of the people who make decisions at the company and coach and lead without authority, because that is so much of what an effective IMO function does.

What are some integration productivity hacks?

Leveraging your partners? I've said more than once, if I am embedded and doing the work of any particular function, then something's wrong. And if I'm doing the work of multiple functional teams or sitting in the seat of multiple other people on a particular deal, then I'm probably failing at my job. To be very blunt, part of the role is to make sure you have the right people in every single area to cover those areas. And then you're the backstop. At the end of the day, in my view, I'm accountable for the success of the acquisition. Not in the same way as the deal sponsor is, but in another way. If there aren't the right teams engaged and now I have to reach in and start operating the levers of that team myself, whether it's for contract review or IT planning or any other area, then there's a problem that needs to be addressed. At a minimum, it's a lesson learned and at worst, maybe you need to pull the emergency lever and get outside help in that particular function sooner rather than later. So it's not all on the IMO to be executing. So for me, productivity is really about leveraging my partners. Also, upfront communication, clear setting expectations helps with all of that. I do benefit in a much more tactical way. I use Something called motion Automatic Task Manager. So when I set myself reminders to do things, I can set priority. And if they don't get done, if they're lower priority, they'll automatically get rescheduled for a later time. So I spend much less time managing my own kind of personal tasks and agenda for work around meetings than I used to. From using that kind of tool, that's been a little bit of a help.

What do you do when you have function that's just seriously behind on their stuff? You're getting frustrated.

Step one is a conversation with the leader of that team to understand why. And having the why in hand that I think helps guide the outcome. And this is I think also management 101, understanding the source of a problem problem as opposed to expecting someone to fix it just by identifying it. So my first impulse is often to see how I can help. Is there other help we can pull in from other teams within their organization, from outside the organization? Is that's what's needed? Is there a misunderstanding of what the task is and that's why they're behind or what their focus should be? Can I help them reprioritize? And last line of resistance is for me to jump in and help myself. But again, that should be the worst case.

Any advice for those that are going to tackle standing up in imo, if.

You'Re deciding whether to do it or how to do it, seriously consider the nature of the transactions you expect to do. When you're scoping out the role and the reporting structure. And if you're interviewing internally for it or externally for it, ask those same questions to understand what is it you're going to be expected to accomplish and see if you agree with the way that's being set up and test those hypotheses as well. Like we said, if you're going to do mostly tuck ins and aqua hires, or if you're going to do mostly more complex deals, you want to be set up for success. And the function that's going to support either of those kinds of routines is going to look very different than some other use case.

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

The one that struck me the most was one case where it was just there wasn't an ability to discreet and commit, which I do think is inherently necessary skill for any leader working in M and A. Because in projects as complex as they are, there are going to be some things that don't go your way. And I remember working with one leader who red flagged an issue on a deal. We made sure that went into the materials reviewed by the management team who agreed to sign off on and do the deal regardless, with some mitigation in place and this particular leader just couldn't accept it, wanted to somehow literally kill the deal after closing and there were a lot of conversations about why that just wasn't going to happen, why it wasn't possible. I think that was the craziest thing I saw is having to kind of talk someone off the ledge on a deal that had already closed.

Learn to disagree and commit. Gosh, this has been great. Thank you so much for taking the time to have the conversation. I learned a lot about standing up in imo. Hopefully remember it when I actually get the opportunity to do it.

Thank you. Appreciate it.

Here's to the deal.

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