Integration-Led Diligence: Cisco's M&A Approach with Johanna Jaakola & Tesia Hostetle

If you've ever finished a deal and thought, wow, that was way harder than it needed to be, you're exactly who I'm inviting to the buyer led M&A summit October 30th. It's free, it's virtual, and it's just a few hours, but you'll walk away with more than most paid events give you. We've got dealmakers from State Street, SPScommerse, Quadient, and ISALT people who actually run acquisitions that scale. They'll be sharing the exact playbooks they used to avoid delays, pull integration in early and hit their deal targets. If you're tired of chasing 10 different trackers and dealing with deja vu mistakes after close, this is the place to learn how to stop that cycle. Register free@dealroom.net summit or by clicking the link in the description this episode's brought to you by Deal Room, the M and A platform actually built for buyers. Most data rooms clunky seller first, zero real workflows. Deal Room flips that script. It's the number one platform for buyer led M&A. Designed so corporate development and private equity teams can run the deal end to end with speed and control. You get built in project management, smart templates for diligence and integration, real time collaboration across teams, and AI features that actually reduce the work, not just repackage it. No tool hopping, no chaos, no surprises. If you're ready to run a tighter process and close better deals, go to dealroom.net or hit the link in the description. Lead the deal, own the outcome dealroom.net now back to the episode. I'm Kisan Patel and you're listening to M and A Science, where we talk with deal professionals and learn valuable lessons from their experience. This podcast focuses on stories, strategies and what actually happened during M and A deals.

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Welcome to the M and A Science Podcast. This podcast is part of a mission to rethink how M and A is done. The old school seller led approach? It's dead. Buyer led M&A is all about strategy, alignment and efficiency, putting value creation at the center of every deal. And let's be real. It's not just about closing the deal, it's about making it successful. We uncover what truly works in M and A by learning directly from the best. Deals die slow, painful death when diligence drags and integration shows up too late. The buyer led M&A Summit is where you'll learn how to fix that. On October 30th, I'm hosting a group of seasoned operators, people like Stephanie Young at ISALT and Keith Crawford at State street who've built deal processes that actually reduce risk and accelerate timelines. We're talking about strategies that keep you out of fire drills and help you realize value sooner. It's free half day virtual event designed for people actively leading deals and you'll walk away with proven frameworks you could put into practice. Register now@dealroom.net summit or using the link in the description. I'm your host, Kisan Patel, founder and CEO of Deal Room and chief Scientist at M and A Science. Joining me today, Johanna Jakula, integration lead on Cisco's corporate development integration team. Johanna partners with the deal lead from the earliest phases to shape integration strategy, coordinate diligence across a large functional community and drive execution to full integration. Tisha Hosstetler, leader of Cisco's acquisition integration practice. Tisha owns Cisco's end to end methodology playbooks and tooling, including compliance and full integration criteria, and help design the approach for Cisco's recent transformational acquisitions. In this podcast episode, we're gonna talk through how Cisco operationalizes integration led diligence, getting integration involved at the deal thesis, using a preliminary integration strategy to target diligence and adapting integration models. Integrate, don't integrate, or reverse integrate to accelerate value. Illustrated with lessons from the Splunk acquisition. Johanna Atisha. How are you both doing today?

Doing great, thank you.

Yeah. Really excited to be here.

Thank you for hosting here live Cisco, one of the headquarter offices here in San Jose.

San Jose, Santana Row.

I'm blown away. This office is nice.

Isn't it nice?

Yeah.

I was just bragging to people. I'm texting. I'm like, I'm in Cisco's office. It's so cool.

This came with the Splunk acquisition.

Did it?

It did.

Oh, that's why we did that deal.

Yeah. So last time we went to Cisco's old headquarter building. I can say old now. Right. Like, we inofficially transitioned to Santana Row being Cisco's headquarters. So that was in North San Jose. And I'd say this is by far nicer, location wise and office wise.

Absolutely.

We're happy to host you here big time.

There's like restaurants and stuff around here. Can we kick things off with a little intro on yourselves?

Yeah. I'm Tisha Hostetler. I started my career in internal audit and then came to Cisco doing internal audit. Got tired of identifying problems and wanted to build processes and solve problems. Moved into acquisition integration. After a couple of different finance roles in Cisco, Cisco Has a great reputation for rotating talent and I'm definitely a use case for that. Came into acquisitions into the team I'm currently leading. We look at the end to end process and bring all of our practitioners along. Not just our central acquisition integration team, but our broader functional team with all of their M and a expert homebrewed in Cisco.

How many deals have you worked on?

All of them.

Well, for the last 10 years, yeah, we touched on again being on the process team. We kind of advise on all of them, so.

God.

40, 40. 40.

50. Okay. Yeah, so we got some reps in.

Yeah.

Johan, how about yourself?

I'm another use case of staying with Cisco. They say one company, many careers. I came to Cisco 10 years ago. I have a background in management consulting and I decided to join the other side within Cisco. So I had a couple of different roles within the finance organization. So I used to be a senior finance leader before joining acquisition integration. I actually was the senior finance lead for Appdynamics. Appdynamics is another Cisco acquisition and that made me realize I wanted to impact how Cisco does acquisition integration work. But that's how I ended up with the Corp Dev integration team. And my role is integration lead. So as you mentioned in your intro, integration lead gets involved very early in the deal life cycle, partnering with corporate development and really strategize with deal thesis, form an integration strategy and then we execute it post close all the way until it's fully integrated or until integration thesis is complete.

Could you help me like differentiate your roles just a little bit, just for clarification. So Joanne, I understand that integration lead, but you're getting involved really early like at the deal thesis and it's really like executing integration, but you're really involved with all the planning throughout diligence and making sure this deal gets successful.

Yes.

And then Tisha, how would you differentiate your role?

We help the integration leads be successful instead of trying to figure out what do we do next, who needs to do what. There's a standard practice with clear cut roles and responsibilities metrics that we expect to be used on every deal and a full tool for this is what you need to go after. We enable integration leads to be successful and we enable them to execute and leverage all of the best practices that we've integrated and how we do our work on every deal.

So you build the program for the integration leaders to set them up for success.

Exactly.

That is because Cisco is a serial acquirer.

It's a machine. How many deals do you guys do a year typically?

Depends. On a year?

Depends on a year. Eight to ten, I would say.

How many employees do you have now in Cisco?

A total of almost 90,000. After. After splunk, after acquiring Splunk, yeah.

I can imagine just even a small how the complexities become with integration. And then obviously large organizations, you have just more moving parts, more work streams, and that adds to more complexity. Speaking of Splunk, Splunk was a pretty big notable acquisition, head turner, if you will, in the industry. What made Splunk special?

First of all, it's Cisco's largest acquisition to date. So that makes it truly special in that sense. I am the integration lead for Splunk. I am excited to talk more about Splunk acquisition. One of the reasons that has made Splunk even more special to Cisco, not just being the largest acquisition, it's actually enabled Cisco to be transformational. So Splunk being transformational to Cisco, meaning usually when we acquire a smaller company, we are setting out an integration strategy based on adapting Cisco standards. However, Splunk, we wanted to make it strategically valid and important to Cisco. With that, we wanted Splunk to influence the way Cisco strategizes and also the way Cisco does business. So that's the big thing about Splunk. It actually has transformed the way Cisco does business and Cisco strategy and also impacting operational processes.

Like literally you moved in their office instead of having them in their office. It's like an interesting philosophy, but it's harder to actually execute for organizations where you're going to acquire a target. And a lot of times diligence just gets expedited, you know so much. But as you learn more when you integrate the company, that there are certain things that they're doing better. And like, how do you be so open minded enough to say, hey, maybe you should pause here and like actually reconsider what we're doing. Take some of their best practices and bring it in. It sounds like that was a bit of a big change on this deal for you.

It comes with scale. Splunk has the critical mass, if you will, in terms of employees and size of business to be able to impact Cisco.

The kicker really is that scale word. You can acquire a 20 person company that might do one of their operational things particularly well. But it's almost irrelevant in the Cisco context.

Right, because it's going to be too much of a change management to make a material impact. But the fact that this organization already.

Had scale, it really helped. Exactly in doing the kind of business that we were looking to expand. So this as a service business. Cisco set out years ago to really transform from hardware centric to a SaaS kind of company. And Splunk was already there, but ahead of us. So they're really recognizing that hey, they're in the transformation cycle ahead of us. So then. And operating at scale, another publicly traded company that kind of allowed us to then look at some of those operational processes on how they do customer success, for example, and really collect some of those good practices and try and implement for us. Because again, already operating at scale relevant to Cisco in business lines that we're already in security and observability and change is hard.

And a company the size of Cisco, it's complex. So we needed Splunk to kick us in a direction of making the change necessary.

It helps with the executive attention.

Yeah, I'm curious about the planning, like how do you think through synergies, if things are sort of going in the reverse direction?

The good example of the reverse direction is the observability business. When we did diligence, we recognized that there was a slight overlap in the observability portfolios. But we also recognize that Splunk from a market leadership perspective had some market leading observability offers. Very early on in the acquisition, the decision was made to have Splunk lead the observability business for Cisco. And then all of our observability business rolled up under there, including Appdynamics, which was a big acquisition from six, seven years ago. Then that all got managed centrally by Splunk. They were very quick to make decisions around cutting some of the products, end of lifing any products where there was overlap. So we picked the better one. And then for the ones that were complementary, integrating it into a unified offer, getting a joint roadmap, and starting to integrate those pieces of business that were operating under Cisco to operate under Splunk so it could be a unified customer experience, for example, and that the products would interoperate. So that decisiveness early and recognizing where the expertise was in the joint company, empowering that expertise to make those hard decisions, honestly, that was something that I'd never seen on an acquisition that we had done previously. That was something that we really did.

Right with Splunk zooming out that decision to integrate, not integrate, reverse integrate. It ultimately comes down to deal thesis and where do we want to go in the market, how it is aligned with Cisco strategy or our aspired strategy. So in the sense of Splunk and the observability business, they're a market Leader in that tech and Cisco wanted to double down and retain and improve the market leadership in that specific market. It comes down to decision on market leadership and how we want to grow our tam.

Early planning. Making tough decisions early, too.

Absolutely.

What went really well in this integration, what didn't go well?

Early on, we were set on being decision driven. That comes down to all acquisitions, but especially for Splunk, given the size and the scale of the deal, it's really critical to get down on what are the critical decisions and what are the outcomes you want to get from decisions that you're driving. One of the things that made us want to really accelerate how we thought about execution was actually the timeframe we were under regulatory approvals took six months less. So we thought that we would have six more months of integration planning between announced and the deal closed. And we've seen in the market, regulatory approvals take longer time than expected. And we faced the opposite. We had to accelerate our integration planning and large, complex acquisition. We'll need that time to perform that integration planning. So that kind of set everything up to speed a little bit.

That's so interesting. I can imagine the deal leads being excited that regulatory approval comes in faster. Maybe some lawyers are disappointed and some of their billable hours gets reduced. You're on the other hand of, oh, my God, we got to hurry up and plan this integration.

Yeah, exactly.

And what it comes down to is if you don't plan properly and get started, like, out the gate when the deal closes, you're going to be behind on those synergies. Like, you've planned a model for a certain amount of synergies, but you want to start executing right away. So that kind of also led up to, like, the criticality of making integration planning and speeding that process up really important.

What didn't go well, was it mainly that you had to sort of compress timeline? Integration had to scramble a bit. Was there anything else that.

Yeah, there were some cultural differences, for sure. We always talk about that in integrations. Splunk came in very decisive, very quick moving, and where executives really got into the details, down to, like, managing to the penny on budgets and things like that. And that was very different to how Cisco operated. When executives started getting into the room with each other, when we started tracking integration progress, what the Cisco executives were expecting and what the Splunk executives were expecting, the level of detail, the like, okay, great, we heard it decide and go. And Cisco's definitely a bit more, oh, we need to investigate all the avenues. We need to look at all the trade offs and then we'll make a decision that was definitely different. And again, to this theme of trying to get decisions made early. When it's one sided and Cisco's making the decisions, we're getting the executives aligned. When it becomes two sided and you get the splunk execs in the room, then it's like, whoa, okay. We feel a little bit of this friction. It slowed things down a little bit until we could get that operating muscle back that worked for both sets of leaders.

Yeah. There's no two unique cultures are going to be a perfect match for each other.

Yeah. And then diligence, they're like, oh, we're culturally really similar.

Isn't that so true? Because we talk a lot on this podcast about culture and there's so many different perspectives on it. But that's true. Like in diligence, you could see some good elements and commonalities in the positive. Because generally positive, unless there's a total toxic company which will stand out. But then rubber meets a road. When you actually integrate, then you find out what those differences are.

Yeah. And very early on, even in the preliminary integration strategy, we do a cultural assessment. So it is core at the integration thesis and integration strategy is to assess what are the cultural differences.

But none of these things showed up. None of it showed up at all.

There was a. Some of the executives already knew each other and were like, oh yeah, we know each other. I've served on whatever his board before. Whatever. That familiarity and working together in a different context made people assess culture as more similar at the full company level than maybe was there some of it. It's dating versus married. Right. It's always best foot forward, you know. And Splunk was definitely ready to be bought until you have to work together on the hard decisions you can assess in diligence. But it to your point, it's that rubber meeting the road on, oh, this is uncomfortable. That is stuff that you wouldn't have seen when everyone's trying to get a deal done.

That's interesting. So you got the leadership level where they sort of, hey, culture looks good. Which can almost create. Sounds like a little bit of a bias versus looking at the whole picture of the organization's culture.

But also we saw early on that even though in a bigger picture cultures were similar, there were also differences in the nuances which we discovered pretty early on in an integration journey. And those nuances really is what were setting us apart. Remember Cisco, huge company, we make decisions at a slower pace. Splunk fast pace, really appreciate making fast moves and bold decisions. You can see how that nuance in the cultures can cause a little bit of a clash from a leadership perspective. That's also one of the perspectives in terms of the reverse integration within the observability space is Cisco wanted to show Splunk that we were ready and willing to move faster than we usually do and make those bold decisions because that's what we aspire to be. So we wanted to show them by doing and living this blunt culture. That's been really interesting.

Plus you've been leaning in. Yeah, very nice. That's the right attitude. We're still validating. Culture is one of the biggest challenges when it comes to integration. Can we walk through just the life cycle of the very, very beginning? We didn't even use this as an example, but when do you get pulled in from the integration perspective into a deal?

Very early on. So there are always discussions ongoing with targets and Corp Dev have those conversations on a daily basis. But when we're mature enough in those conversations, Corp dev integration becomes involved in forming an integration strategy that's aligned with the deal thesis. Very early on.

At the time you're developing the deal.

Thesis, when we have a draft of a deal thesis, we're getting in contact with a dealead from Corp Dev to help formulate what the integration strategy that goes with that thesis.

With the. The thesis. Okay, so before loi. Before loi, we're creating a deal thesis. Yeah, we're just creating a deal thesis to get alignment like this might need board approval, especially a deal this size. Yep, creating a deal thesis. And part of that is what the integration thesis is gonna look like.

Yeah. So in our very first conversation before loi, we go and have a conversation with our CFO for Splunk. It would be the board of directors level of conversation, but the first approval conversation with the CFO would have a version of integration strategy. And that's been a critical part of the approval conversation.

So you get that initial draft going when it comes to contributing what the integration thesis going to look like, what goes into it, what level of detail are you getting to?

So it's pretty detailed. So it actually incorporates the information we have at the time about the target, but it has details on what the product and technology integration will look like. It has details on what the commercial transition will look like, who's the customer profile, what are the contracts, and how will we transition that. If that's the desire to a end state where we move everything over to the Cisco Book of Business, for example, it has a people location perspective and it has also the operational perspective. So it's really encompassing every single aspect of the business.

When you made the example earlier, the observation business is that stuff like that early when you start thinking of what's that going to look like in terms of what the dominant products are going to lead and.

Yes, yeah, that early. Yeah. Before loi, before Ally. Well, we always work out details. Loi and final merger agreements or purchase agreements.

I would hope so. Yeah.

Yeah. It helps you figure out what you want to test in diligence.

Yes.

But you should have a pretty good idea of what you're buying and why you're buying it. A lot of it is to be additive into the Cisco portfolio in alignment to Cisco's overall strategy and where we're going understanding. Okay, where is Cisco? It's typically some subset. Right. It's this particular product family. What is the acquisition bringing us? How do we actually make sure we know how to take what they have and insert it into our product family in a way that advances us? You're going to pay a premium. So you have to justify why you're doing the deal and why you're paying that premium. So that is part of deal thesis. You really do need to start. And honestly, as integration has gotten involved in these early stages, sometimes we're asking those tough questions around this is a nice vision that you have. How does that actually happen? What are the things that need to happen? How do you integrate that? By when do you think you're going to integrate that? If you don't know the answers, then that's what you need to probe on in diligence to say, hey, we're really buying company X for this specific technology or this specific set of engineers. Okay. Do we need to test that technology for scale, for tech debt or if it's the engineers, like what are those engineers doing now? What support obligations are they going to have? How quickly can we get them off of working on maybe an acquired product that we're less interested in and working on the Cisco roadmap that we are interested in thinking through that to make sure that this deal vision as an actual executable strategy is really where integration plays a big role.

It's really important to start thinking about that early as part of the deal thesis, that you have an integration thesis tied to it. But it sounds like diligence is actually more than just looking for risks. It's validating that thesis and those assumptions that you made. So now that you got this Vision of what the integration is going to look like. You're going through diligence saying, all right, can we actually do this? Is this really like achievable timelines? Is this going to be the right strategy? Is this stuff can actually come together?

Yeah, because ultimately, at the end of the day, the deal model has made assumptions to achieve that certain valuation. So we have to be able to validate is that achievable from an assumptions perspective.

I want to step back a little bit. So like the big thing I always champion is buyer led M&A. Got a whole framework I published. I'm working on a book right now. And a lot of this is crystallizing a strategy so then you can be proactive about sourcing deals. Obviously the tech stack, you guys have your own custom tech stack to centralize information, but then synchronizing diligence and integration together. It sounds like you do that even before loi, which is great. And then we talk about scale and then actually keeping the people experience so that things actually come together with the culture side. I'm curious if you go step back and look at the big strategy, how aligned are you to the overall strategy of why doing this deal? What was the driver? Was there sort of like this big view that Cisco had on where the company wanted to go and that was the reason of doing this acquisition? How aligned are you to the sort of big picture? Why?

Is this pertaining to Splunk or in general?

I would say even the Splunk is example. Yeah, I'd say Splunk. And then overall I talk to enough integration people and a lot of times what goes wrong is people lose sight of the why. And I just want to get a sense of because. You're I'm talking to the rubber meets a road person.

Yeah.

And I want to understand is like how aligned are you to that big, you know, the CEO's office, is it around here? Can we go?

Yeah. You want to say hi to Chuck?

Yeah.

Let's see if we're both aligned. You know, I want to hear your story of what that vision looks like and what drove the strategy. I just want to understand like how are you aligned or how does Cisco like think about keeping that alignment as well?

Every acquisition is aligned to our business unit structure. So the strategy depends on what market, which part of the tech stack that we're targeting with that acquisition. For example, the deal thesis we had formulated around security and observability since Splunk is a market leading company within those tech sectors. So for any given Acquisition the deal thesis based around how it fits with the Cisco strategy and the aspirational strategy, like our current strategy, where we want to go. So it's a matter of taking Cisco where we want to be in the next year or years. And the deal thesis will never be forgotten. You will follow it through the whole deal life cycle. And we do a certain number of gates or milestones. We're talking about pre loi, but we have a few gates even after the deal has closed, where we do review with a cfo, with our chief Product officer. How did the acquisition perform after close? If we meet the milestones, are we still adhering the deal thesis? Is this still valid? Given vs go strategy is today vs where and what we were thinking at the time of acquisition.

So this business unit comes up with this vision or aspiration which is be number one in possibility and be number one in that space. And they've identified, hey, we want to be number one in the space. This is the company that really fits the criteria. This would get us there. And then that's when you start shaping your deal thesis. Based off of this deal, you shape the deal thesis. Big part of it is getting our integration thesis in there. When you're really asking the tough questions of how's this actually going to happen? And come together. Because we've done this before and learned a lot of lessons which I'm also curious about, because what I see you doing now is doing this very early best practice, buyer led. Very buyer led. How has it evolved, Tisha, like over the last 10 years of all these deals you've seen like 10 years ago, did you do the same? Were you taking the same approach or what?

No, actually. And I know when we came in, I came in just a few months after we had a new VP of acquisition integration, Karen Ashley. And she stepped into a model where the deal team and the integration team were very separate. It was very much, hey, we did this deal, throw it over the wall, go, integrate. And the integration was much more focused on checking the box. Hey, we plugged in the supply chain. Hey, we plugged in the IT systems. Hey, the people now report where they're supposed to report and get a Cisco paycheck. And it wasn't aligned to deal value. That was nice if we got it, but it wasn't the sole the real focus, because we were very separated. And Karen did really a fantastic job in building deep partnerships with the Corp dev team, the deal team, improving the value of what the integration team could bring to those earlier deal stages by really coming in and coming in with a point of view, coming in with the lessons learned from actually trying to execute against these strategies. Because generally our deal team, after the deal closes, they're kind of out and they're not in the weeds. And how did this play out? We really put into place one better feedback loop. So we have quarterly reviews with the deal team on hey, how is integration progressing and how are we really hitting the financial technology targets and if we're not, what's going wrong? So they're learning how strategy progress plays into execution. So we set up that kind of checkpoint and really kind of showed that we're going to get better results if we think about how strategy gets executed against up in those early stages. But it was not, it was not this way when I came.

Those of you listening a sidebar, I do have a podcast interview with Karen Ashley. Highly recommend listening to it. She actually walks through what that restructuring looks like because it used to be bunch like typical corporate tons of work streams, but they consolidated to just a number of groups that actually made sense.

Yep, she's great.

I like the point that you made also about having those additional checkpoints to really monitor how things are progressing.

Yeah.

Now going back to our timeline, we got this deal thesis and we've got the integration thesis as part of it and then we go and get this approved. Is there scrutiny does a lot of scrutiny comes around from obviously you come up with this and you got to socialize it with corp dev, the business unit leaders. Even at the most senior level like the board, are they looking at it when they're starting to think about approving the deal?

Our board has a threshold so deals with a valuation above X millions of dollars they will review below that. It's the CFO that has the approval.

Oh wow.

If it's going to the board, obviously it's flunked. Went to the board multiple times through the process. But for our typically our product or platform deals. So those are ones with a significant kind of go to market and financial synergy goals to hit. Those are typically big enough to go to the board. Then they're looking at the strategy in more detail. The fit with the broader Cisco strategy, these smaller more like tech and talents that typically only goes up to the CFO because the valuation just isn't big enough for the board to worry about. But those we still review, we're still looking at whether those technology roadmap milestones were hit. Are the teams getting appropriately integrated and empowered? We're looking at okay, have we retained the talent that we paid so much for. Those are coming up even in the corp dev deal reviews that we do on a quarterly basis. We report back to the CFO as well on regular kind of checkpoints to say. You typically have a checkpoint roughly a quarter after a deal has closed to say, hey, this is what we planned on doing and this is what people committed to do. This is what's actually happening. So relatively early on to say, okay, if something's off track and someone's not following through with their commitments, you can intervene earlier. That goes to the cfo and then typically about a year out to say, okay, this is how the execution is looking. This is what's been delivered, et cetera.

Once this goes up to the board or the CFO for final approval. Final approval happens when we really go to the negotiation table, get a LOI signed.

There's two stages. First we get the approval to go negotiate. That's also when we CDI corporate integration lead diligence. So then once we've agreed on all the terms, that's the second point of approval. And that's when we are just getting the go essentially from the CFO or board of directors.

There's two approvals.

Yes.

They're sort of like, yeah, go for this deal. And then you really go through and dig in and come up with like, all right, we're at like proposing a price now.

Yeah, the first level of approval is more, yeah, this looks like a good target. Go investigate. That's when we initiate due diligence. Once diligence is done, we've had the executive readouts and findings from diligence. All terms are negotiated. That's when we really go in for that final approval from CFO or board of directors.

But that's still. That's a loi.

The first approval is approval to negotiate within a certain price band to get to loi. To get to loi. You get loi.

And then the final approval is like a purchase agreement approval.

That's right. It's a buy.

Okay, so we got. Okay, now that makes sense. I was like, whoa, you got two pools before loi. So one approval is like, hey, we kind of give you this range. Go, execute, get LOI sign. And then second approval is final. This is it. Deal's done at this point, if we commit to it. Once you get this LOI sign, what happens?

Diligence.

Yeah. Like what happens? Like, how do you, what do you do?

Well, it spins up the whole M and A community. So we have a broad cross functional community within Cisco, like, is there an alarm you pull?

And like all these people come to the office and like, yep, time to start diligence.

So that's the fun part of being an integration lead, because I feel like I am leading sometimes referred to as being an air traffic controller. So I organize, orchestrate the whole diligence process. And that has certain work stream leads.

And there's a whole lead diligence.

Yes.

Great. We're clarifying this for those listening. Integration leads diligence.

Yes, it is a fun and intense exercise. As anybody who's been in a due diligence knows. We work through with a target, with all of our robust framework of questions and meetings from all different aspects. So we have different work streams of financial, tax, operations, technology, aspects of the deal, and legal, of course, and work through all those diligence work streams. And once we've come to a conclusion, then we typically do this in a pretty constrained timeframe, so it's pretty intense. And when that is done, we present out the executive readout from the diligence findings. We're usually actually the most leader. And in certain cases we also do the diligence readout with the cfo.

I don't know a better way to synchronize diligence integration than having integration lead diligence. I'd love to hear a little bit more. Especially I don't know if you've worked with the traditional model where it's like a whole separate team and a lot of times integration gets pulled in like a couple weeks before close and then they're essentially rediligencing the deal all over again. You're shaking your head.

I can't imagine. I cannot imagine.

I'm telling you, there's people listening to this probably like shaking their head because that's what their company does.

The il the integration lead comes in and really what's so great is as Johanna's like leading the charge, really bringing in the why are we doing this deal? What are the things we're trying to test from a deal? Thesis execution and integration thesis execution. What data do we need to gather? And so really pulling in. And again, in some cases, it's the M and A community that will be working on that integration, bringing in their questions and their viewpoints. And then we still have third parties, legal, finance, detailed like finance diligence, open source diligence. There's still third parties involved. But having that coordination point with that like, why are we doing this deal? What things do we need to test in diligence is so critical because otherwise I don't know how you start running on the right foot as soon as you get to close in those first month, two months after close, when you really have all the attention, all the momentum and that's where you can get a lot of the work done and a lot of those big decisions done and start executing against them because otherwise it feels like you start flat footed.

We agree like the biggest factor in M and A success is how well you can execute integration. That's where we'll pause the conversation for now. We covered a lot of ground in the next episode. We'll pick it up right where we left off and keep digging in. Thanks for listening. We'll see you in Part two.

Foreign.

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