M&A Integration Technology: What Actually Works

Hello, M&A scientists. Imagine you're mid-deal, the workload is beyond what your team can absorb, and you need someone senior enough to own a work stream right away. Finding that person through the usual channels takes weeks you don't have. That's when I send everyone to fintalent.com. You get access to over 5,000 vetted senior professionals across M&A, PMI, transformation, and strategic finance. People who know the work from the inside. You post a brief, get a curated shortlist within 48 hours, and have the right professional embedded in your team from day one. Next time your team is stretched, visit fintalent.com. Again, that's fintalent.com. Hello, M&A scientists. If you haven't grabbed the State of M&A report from Dealroom yet, It's a good time to check it out. We're 3 months into the year, and this gives you a reality check on what you should be focused on. It's based on input from deal teams across different industries, and it shows the gap between where people think they should spend time versus where the real problems are. If you're trying to set realistic goals or get everyone aligned to what matters, this gives you the data to back it up. Download it for free today at dealroom.net/realities. Report, or click the link in the show notes. That's dealroom.net/report. Now back to the episode. I'm Kison Patel, and you're listening to M&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&A deals. I spent years building tools for M&A teams, so I believe in software, but software only works when the team using it knows what good execution looks like. If diligence context gets lost, if integration gets pulled in too late, if the workstreams don't connect back to the deal thesis, the tool is not the issue. The operating discipline is. Today's a little different. Instead of one guest, I brought four. Got Todd from Intel, Jim from Coursera, Kerry from Ansys, and Mahesh from UKG. We're talking about what actually works in integration technology, what tools help, where they create noise, and what has to be true before any platform can create value. The session was originally recorded live for DealPilot members. We're releasing it publicly today. I want to welcome everybody to Off Mandate. This is a new roundtable series from M&A Science. No presentations, no polished talking points, just a small group of operators who have truly been in the trenches and having an honest conversation about what actually works and what doesn't work in M&A. You might think of this format as like eavesdropping on a conversation between people who've lived through this. Except we're recording it so that we can learn from it. And here's what I'm hoping to get from this conversation is like a real debate. I feel like that's one thing I noticed in M&A is a lot of things that don't have a direct answer. So we want this format to be open to some real disagreements, some real lessons, because not everything has like a perfect clean answer. And I'm personally tired of overproduced events where everybody's too afraid to say what they're actually thinking. And this is where we're going to say it. So you can see that this panel will go through introductions, but we have well over 50 years of combined experience in this room. So first of all, I do have a disclaimer that all the participants joining are joining in their individual capacity, not on behalf of any company they may be affiliated with. This discussion is for general education purposes only, does not constitute any legal, tax, investment, relationship, any kind of advice. Today's theme is about integration technology. What actually moves the needle? What's just noise? What are things that people get wrong? We'll start off with some introductions. Carrie, you want to kick it off?

Sure, absolutely. My name is Carrie Pugh, and describing where I am is interesting. So I joined Ansys about 2 and a half years ago, This past July, we were acquired by Synopsys. I was in an M&A role and thankfully I continue to do an M&A role as a leader for integration, but I'm on the reverse side of the deal. I'm not the buyer this time. I'm being acquired. It's been very exciting.

I'll go next. My name is Todd Manley. I'm with Intel, run the integration teams that also focus a lot on the divestiture work that we do. Been there for about 3.5 years, but I've been doing this work for going on 20+. Stumbled into it when I opened my big mouth at Cisco to a VP and said, "Why are you buying WebEx?" And he says, "Why, do you know something?" And I said, "Yeah, I actually was at WebEx for a while." And so I got pulled into it and that was a great training ground and gave me some good skills to build upon. But done integration work, business transformation, some deal work from here to there, and really excited with this group of experts to have some fun conversations and dialogue. Going to be taking some time off away from Intel in the coming weeks and months. So looking to recharge my batteries, but want to continue doing this. I'm invested into this as a career for people. There's a lot of great opportunities that folks can learn and grow and develop doing M&A-related work.

Doggo knocks. Hey, Jim Buckley. I've been doing M&A integration for, well, since I had a dark beard, which was a very long time ago. M&A at Microsoft, EMR twice, PayPal, and I tried to retire. That didn't work. I'm not very good at staying still. I'm now at Coursera running the integration process for the acquisition of Udemy, which is proving to be very interesting for a lot of good reasons, but something I've never done before, which is interesting considering I think I've done like 125 deals. So I can always learn. Which is the opportunity. Awesome.

Good to hear, Jim. A lot of connections. My name's Mahesh Ganesan. I am with UKG. UKG is in the human capital management and workforce management space. UKG itself was formed 6 years ago through the merger of a company called Ultimate Software based in the South Florida area and a company called Kronos based in the Greater Boston area. I am based in the Greater Boston area. I've been with the company for 7 years. Do a steady clip of acquisitions each year. Much like Kerry, had a little bit of a stint when Ultimate Software and Kronos merged to form UKG. We've seen all kinds of transactions. Looking forward to engaging with the team here and talking through some of the things that I've experienced being in this profession for a number of years. Similar to Todd, kind of stumbled on it post-grad school, post-B-school, basically landed in a consulting role. Strategy consulting that one of the engagements ended up being M&A, and then that became my full-time career. And it's a space that I love.

Awesome.

Let's jump into it. So I got an icebreaker for you is tell me about your general philosophy or ethos when it comes to M&A integration.

I like to look at it from the back forward. What does success look like? And then bring that forward into, okay, well, how is that manifesting itself and how the deal is being constructed and how people are thinking about the strategy? In doing that, you can quickly pick up on some signals where you realize there's either misalignment with how the business is thinking about the target or how the target is thinking how they're going to come in and do great things. But sometimes keeping an end in mind, knowing that, okay, the route to get there, it could be one circular journey. Sometimes it's a straight line, but it's regardless. For me, that's always been interesting because I always approach it kind of with an operator's eye. Less of a dealmaker's eye?

For me, it's all about the value drivers. Whenever needed, I'll say it's all about the people and culture, which is true, but at the end of the day, it's the value drivers that really articulate why we are doing something, how are we tracking against it, how do we do it. If you think you know people and culture in one part of the world, try doing a deal in another part of the world and You learn so much through those things. So value drivers connected to people and culture.

Yeah, and I'll kind of resonate with what Mahesh shared. So for me, it's all about— well, it's two things. Integration work has to create value. So everything you do in integration has to hang up somewhere off the value chain. If it's not, then it's wasted effort and probably wasted money. And the other thing is, and I've beaten on this numerous times with Kison Patel, It's gotta be simple. It's really hard, but if it's not simple, it just self-complicates over time. And then you end up in this big muddy pit where you're like, I don't know what to do next. It's so complicated now. I don't know where to go. So you gotta revert back to simple.

I'll end with just saying culture is paramount and really focusing on that piece. The value drivers are critical. I agree. But if you don't have some of those culture connections, you start to lose those folks that are enabling those value drivers. So all those value drivers can fall apart very easily if you don't keep a close watch on the culture and how you're integrating your people.

And that's a good point, Carrie, because what's really harmful is when you've got these false pretenses of either leadership or people who want to go do the deal, and you come in, in that with a lens of like, hey, culture's important. And you realize that it doesn't have the same gravitas with them and they don't kind of carry it to the same weight and kind of responsibility that you would hope they have. It's unfortunate because sometimes they'll talk to it, but are they really walking the walk? Those are the situations where like I walk away and I'm like, okay, you gotta lean into this one. And maybe it's not the leader that's that carrier of the culture. You've gotta find someone else either in the business or someone affiliated with the deal who may not pop on an org chart, but you realize these are the key people that are the bearers of the culture that needs to be respected and put on a pedestal for everyone to attain.

Culture's always an interesting one for me and for a couple reasons. One, when I worked at Microsoft, we did 90 deals in the 6 years I was there. So we did a lot and everybody worried about culture. Everybody talked about it and nobody did anything about it. Basically it was, we acquired you, your culture is lost, Welcome to the Borg. It was kind of brutal, but it was kind of true at the same time. Carey, it'd be great to get your input on this, or any— Todd, Mahesh. How do you define culture? What I find is there's a lot of different ways acquirers and to-be-acquired sellers— the definition of culture seems to be different amongst all of them in almost every deal I've worked on. Good point, Jim.

And Carey, definitely, I know you honed in on culture. I try to break it down into smaller chunks. What are some of the smaller practices that this organization does that keeps them together? Is there a way for us to be able to duplicate it? Now, that's not representative of the entire culture of the organization, and it cannot be just duplicated in its entirety. But at the minimum, are there things that they do periodically? Are there specific types of events that they host? How are they focused on giving back to their community? Are there some things that are very unique to them? As part of the due diligence process, we try to get that and we try to pick maybe half of those and say, let's make sure a concerted effort to execute on those. So it is in that larger umbrella, if you will, Jim, of culture. But what I've also tried to figure out is if instead of trying to boil the ocean and try to get the complete definition, we try to implement some of these practices in order for us to be able to keep that feeling of continuity post-close.

There was a deal that I did back in 2010 and '11 when I was at Cisco, and we'd acquired Tandberg, which was a technology firm over in Norway. There were about 4,000 people. They actually had a C-suite leader who was the chief cultural officer. That business was interesting because the business had started maybe back in the '30s or '40s. Initially around like radio technology, like the early bets on tech. You look back at their history, they had changed kind of their strategic direction every, call it, 15 to 20 years. They'd made a big pivot. There was a lot of gravitational pull to recognize where they had come from and keep that core to where they wanted to go. And it was quite interesting because this leader stayed on board through the acquisition for maybe the first year to help get things settled. But as she rolled off, actually did a roadshow to everyone that had touched that part of the business through some aspect of either the deal or the integration. And it was an interesting introspective story to hear that point of view coming from where they were in their own journey as a company, the experiences that they had. Trying to remember the framework they used, but it was like this culture chasm, the old curve of like, hey, deal gets announced and then bam, you say, okay, the Maslow's hierarchy of needs. Do I have a job? Am I getting paid? Will there be food on the table? And then coming out of that. So it was really interesting that they actually had someone within their company that was doing that and the learnings that came from it afterwards.

Interesting.

So the size of the acquisition compared to the parent company can obviously have a bearing on some of these cultural aspects as well, but we're buying these companies, paying for these companies for a reason. They obviously have something to offer. It's always imperative of us to examine what their cultural aspects are, and determine if we can glean from some of those. Are there some aspects that we could use some improvement in our own culture, or how do we need to evolve? It's from the top down. So going from the bottoms up has— it's very challenging. So you have to get your leaders invested and bought into it, and that's gonna be a bigger challenge as well. But I just see a lot of value in that consideration.

So far what I've heard is we got a view on keep the end in mind. The value drivers that define why we do the deal is also a key one. Integration work has to create value, keep it simple, and then culture is paramount, which everybody agrees on. I feel like I should have got a corp dev person on this call so we could have changed some perspectives here. I want to jump right into it. Let's talk about what works in practice. What are some of the tools, workflows, approaches that consistently deliver what separates teams that execute well from the ones that don't when it comes to integrating tech companies?

If this doesn't kickstart things, nothing will. So I did my first deal in 1999. I was the FP&A, I was the controller of a large division of a company that's since been acquired by Siemens. So I was a finance guy. I did the deal model. I did all the due diligence with a lawyer who was not an M&A lawyer. It wasn't a huge deal, but it was remote. It was international. Nobody told me what to do. My boss at the time, the executive VP of the division said, "Figure it out." His words of wisdom were, "Just don't fuck anything up." That's a mantra that I've held onto since then. But nobody held my hand through the whole thing. There was no documentation. There was no internet. I just dove in and just tried not to screw anything up. I didn't have an integration plan. I never had an integration plan. And my boss at the time ended up leaving to go on a big game fishing trip. He was a big game fisherman, wanted to set the world record for sailfish. And he left. And as he's leaving, I said, what do I do? He goes, you'll figure it out. And I was like, I was scared to death. I don't think I've ever lost that. I don't want something else telling me how to do my job. I know what to do and I know there's great technology out there right now and I embrace some of it, but not a lot of it. I'm still— I'm doing this a long time, so I'm kind of old school in a lot of ways, but I look at things as like, is this going to add value over time, make us smarter, faster, more efficient to get to the end state? Or is this just going to be a $15,000 license that people might use or people might not use?

When I reflect on Kison Patel's question in terms of the way I think about this, what's worked, what are some of the things that I've learned along the way? So Jim went back 25 years in terms of talking through it. What I've learned in deals over the last maybe about 10-ish years or so is how well do you bring the key stakeholders along, the ones that are executing it. The single biggest challenge I've had in the past is There's a number of folks that are involved in due diligence that don't carry forward integration. Yes, I'm part of the same team that does the due diligence and, and the integration, but at the end of the day, there's many people that move away from due diligence to integration and bringing those people along, the ones that need to pick up on execution post-close has been one of the areas that I've learned to really focus on. You make some assumptions, you expect the due diligence leads to be able to share some stuff with their functional areas with integration, it is inconsistent at best. So I don't make any assumptions. And just one thing that I've started doing within the past couple of years is— it does take a lot of time and energy, but I go to half a dozen separate functional areas and talk to the key leaders once we are about midway through the due diligence process and we know we are more likely to close than not. Is to actually take the due diligence findings that are up to that point and literally talk to the leaders of this org and talk to them about why and the what and what's coming, not necessarily to ask them for anything at that point in time, but to really set them up for how this is. Now, this is beyond what happens in terms of cascade from senior levels, but this is more getting into not one-on-one, but leadership staff meeting, 10-on-1 kind of sessions where these leaders have the ability to really understand. So I found that to be really helpful for two reasons. Number one, when I go and tap onto those people for getting those teams to actually be able to work on integration, I'm able to get the buy-in. And number two, the leaders feel like they've been part of this process as opposed to just being asked or tapped on the shoulder for, "Give me two people to support the integration of this." So Mahesh, I'm glad you're doing it.

I wish you would've had the experience of doing it even sooner in this body of work. And this is where I'm gonna get on my hill, and if I die on it, okay, I'll die on it. but I've always had the firm belief, and this hit me hard in the first role that I did back at Cisco. We had, say, a highly efficient deal and integration teams that were good at the small to mid deals. The big ones were always the ones that upset the apple cart, but there was, it was optimized for the small ones. And I remember one of the first things that really impacted me was a deal was done, everything was signed, it got thrown over the fence. I was doing IT work and I looked at it and I was like, We're a Windows company. We've never supported an Apple laptop in this company. And you said they could keep everything and now we gotta go figure it out. That was interesting because that shows that divide of not having kind of the connective tissue of some of these functions, understanding what's coming. But I've always been a big proponent of, look, your deal's going to be better off if you can get that integration listening happening as soon as you can, diligence. For a long time, there probably were some companies out there that were like, hey, we've got some secret sauce about this. We're going to have our integration team run diligence as a service or the deal people. I got exposed to some of that early on. That was one that really is eye-opening. You had to strike the right balance. You had to make sure, and you're hitting the nail on the head around, I know at what point in the certainty of the deal I need to go bring in these leaders and really say, "Hey, look, this is going to happen. You need to commit some resources. Here's what we're thinking about it." But you've got to get those people in there. You've got to scrub what is that false narrative or can be a false narrative around that chasm of, "Hey, this team did diligence and they went off and now I got a whole new team and I got to relearn all that." There's ways to easily figure that out. I think more people are putting that into practice, which is good. The thing that I run into from time to time is especially, and this is maybe an older, old school deal mindset is, "I don't want you in the room because you're going to stop the deal." I'm like, "My job's not to stop the deal. My job is to make your deal be better and arming you so that you know the right questions and the right ways to think about it so that we get to the better outcome." That should be something everyone should be taking away these days as they look at— if they're doing that, that's great. If they're not, why not? And there's a lot of practitioners and examples that people can reach out to in the community and be like, tell me more about how you do it and the right way to navigate it because it's something everyone should be doing.

Kison Patel, I know you wanted debate here and I'm not sure I'm going to offer it, but there was something that Mahesh said earlier about the team that's in diligence. Carrying forward. And we have found so much success with that when you have some of the same individuals that are involved early on, pre-close, and then through integration. And that connection has really been invaluable because there's so much information that seems to be lost when that flip or that switch when we close and there's a whole new team that's brought in. That, that has brought a lot of success for us, but The other element too that really stands out is the reverse of what maybe these guys were talking about. And it's really focusing on some of the leaders and the individuals that are coming in and preparing them for this whole new environment. You know, maybe the parent company, that culture, how it exists today and the way some of those things work. I've done a lot of coaching with numerous leaders just on how they should approach certain situations or topics, or even coaching them on how they should be working with some of their employees in this transitional period. So those are some of the themes that really helped us to build success. You can build the frameworks and those things that are repeatable. And I know, Jim, you talked about that a number of years ago, your frameworks. I latched on to that and I love that concept. But I think there are other elements that we can build upon to think about as we bring these companies into one.

I'm hearing some themes here, like fundamentally have integration involved early in the deal so they're aligned. And then like Mahesh said, is the stakeholder alignment, bring key stakeholders along that are going to ultimately execute. Sounds like fundamentally in practice, that's key. I'm curious about all the tools. Everybody talks about tools, workflows, this sort of tactical approach. And now we're in this mist of AI emergence in every aspect. And I've even seen team at Dealroom prototyping AI to do integration planning. I'm wondering where does tech actually help versus get in the way? Because a lot of what you just described is very much people-to-people conversations, interactions, and alignment that are ultimately going to drive the success. And if you overdo the tech, are we getting away from that?

I used a product 15 years ago that was too tech-heavy. It had too many knobs and dials. It was like sitting in front of a sound engineer's 64-channel mixing board. The general complaint was, "I spend too much time updating this and not enough time actually going and doing the work." The balance that you've got to strike is, where does the tool help keep you organized? Where does it help keep cross-functional people aligned? Are there aspects that help highlight maybe some risks that aren't getting the focus that people should give the focus to? That lends that single pain into it, but don't approach it with something where it's like, "Oh, I've got this whizbang tool and next thing you know, I'm spending too much time and it's just drawing me away from what's really important." I worked with a deal guy who was like, he did not want to do any technology. He's like, "Look, I got a yellow pad of paper and a pencil because sometimes someone will say something and I need to erase it and change it." But he was very basic like that. And that was interesting to me being a technology guy. Like, yeah, I love the next thing that's coming out, but I now take a really critical eye at it and go, Does it help? This emergence of where AI is coming in and where can it help and where can it not? You're going to see specific use cases where there's a good use case for contract reviews, maybe some customer go-to-market things. There's going to be valuable use cases. I think the jury's still out in how things maybe come together. If you look at it from the way you bring a program together, the way that it has to gauge the, as Mahesh said, the cross-functional stakeholders. Some of the messiness, I don't think it can perhaps get you to a starting point, but I don't know, and I haven't seen anything yet that really then maybe pushes the needle past that. We're at the early innings, especially some of this newer technology. And I'll just throw that out there, see what other people think.

It's a good point, Todd. The way I think about this, Kison, tools, technology, as with anything else, supposed to support us. Trust but verify doesn't change. It's a philosophy that we've used before, and it's still valid in the AI world. I've embraced the AI technology in particular. I'm not talking about the project plans and things like that, which we do leverage as with any other organization. But for me, I gave the example of having all these breakout sessions with many different functional groups, and those suck up a lot of time as we try to go through those. And one way for me to make up the time is I take the due diligence findings. I've taken all kinds of inputs that we have from our recordings, and we have some very detailed— it's all in our enterprise ChatGPT now, and we've been able to run some very serious risk logs, what are some of the things I gotta watch for? I've fed some of my prior deal thesis in there. Give me a sense for what are some of the things that I need to watch for. So trying to think through things in a way where leveraging our past lessons learned, our entire set of lessons learned all fed into our session now, and the due diligence findings are also out there. Now I can get a sense for what are some of the things that I gotta watch for, using the time through those things to be able to handle some of the other conversations that I need to, because there's only so many hours in a day. And as I introduce new things to keep the human touch going, the stakeholder engagement active, I got to figure out some way for technology to help me. So I personally have been tapping into AI all day long to help me with at least 2 to 3 things, leveraging the inputs that we have from due diligence, etc., and coming up with the risk logs. Helping form up what are ways in which I can think of a different structure, what are some of the things that I need to watch for with this particular transaction, those types of areas.

On that point, does your organization have a policy or level of trust around the tools that you're able to use? Because I know with my organization, it's ironclad. It's hard. Yeah. Even in my dabbling of exploring potential, I pay for a personal license on some services just so I get educated.

Interesting. We do. The developers have more access than I do, but Enterprise ChatGPT, you have Copilot that's part of our Microsoft license, and we have Gemini. I've not used Gemini at all. I expect that will change over a little bit of time. But ChatGPT, all day long, every day, it's a window on my computer now in the last 6 months. And there's something or the other that I do there just to help as a coach/counsel. And I found that's one of the ways in which I get some time back because the most fundamental of this is crafting up what I need to put together for presentations and stuff. But to answer your question, yes, we do have a policy. It's ramped up extensively. We did have a policy back in April of last year, if you will, and since that time, so we are about 10 months in.

I use Copilot in day-to-day. That's one of the approved tools that we can use internally, but there's a certain level of concern just around confidentiality when it comes to maybe expanding beyond that. So that's why I've been a little hesitant to even try to go that route because of some of the confidentiality concerns. But I guess there's also this side of a lot of the tools that we've used in the past. And Todd, this probably goes to your remark. I felt like we always put a lot of information and data into these tools and then we'd still end up using PowerPoint. Because we couldn't get the data out in the format we needed. So I, it became this big frustration. We're not, I'm not gonna continue to put all this information in because I can't get it out. And maybe that's something that a ChatGPT can help resolve in the future. Maybe it can spit out in the format that I need it in. But that was something that I continuously bumped up against.

We may be referring to the same tool and it would be interesting to just turn that tool over to an LLM and be like, go tell me all the things I could have learned or should have been able to know from all this information that's out there.

Yeah. So way back in the day, I was at a Conference Board meeting and I don't know how many of you remember Moni Monishta. She was at IBM at the time and she was always a featured speaker.

I remember.

And every time her featured speaking included a sales pitch. About the tool that IBM had used.

IBM Accelerator, Mini Accelerator.

Yep.

I was an IBMer for a long time, so very familiar.

So it was funny because Moni spoke before the guy that I reported to at the time, Joe Whittinghill at Microsoft. He was great. So Moni does her thing and I've always respected her and her team and their approach. My boss, the general manager, Joe Whittinghill gets up there and does his thing and somebody asks a question, says, what platform does Microsoft use to manage their integrations? And he completely deadpans, not a smirk, not a smile. He just says, "We use Word and PowerPoint." And you know, you would've thought somebody had dropped a rock through the ceiling. But I guess the point being, and I think this is kind of the thread that we're all talking about, and I'll just speak for myself 'cause I don't wanna speak for anybody else here. What I'm looking for and have currently is a single, what I call a single pane of glass. The one place where all the due diligence info is, all the work stream info is, all the preliminary integration data is, and then the final integration plan, and then the ability to track. And the challenge is it's really hard to gather all that because you got to go all these different sources. It gets kind of randomized. When I say single source of truth, I don't want any other artifact anywhere. I keep telling people, if it's somewhere else, it doesn't exist in our world. And everybody goes out and does their own individual search on either Enterprise ChatGPT or Gemini or whatever and tries to bring that in. And you're like, where did this come from? Because this is kind of counter to where we've gotten to so far. So I think there's a lot of great tech out there, but I don't know that it's kind of at Todd's point. It's interesting, especially the AI ones. And I don't think it's there yet.

Quick reminder about the 3 new products we just launched. The M&A Competency Assessment, $149, standalone diagnostic that shows you exactly where your team's M&A thinking stands. We're already seeing advisory firms use this to assess juniors before they start staff them on deals. The Buyer Led M&A Certification, completely rebuilt. 5 courses, over 60 artifacts, practitioner-led content from top to bottom. This is the credential advisors are using to differentiate their practice. And the Certified Advisory Directory. You complete the certification, you get published. Full profile, your contact info, your sector expertise. It's live on the site and practitioners are already using it to find the right advisor for their deal. All three are live now at mascience.com. Back to the conversation. So what about like non-tech tech? Jim, I'm going to pick on you because you did that talk recently around just simplicity. And to me, I almost look at that as a tool of itself. Again, like non-tech tools, or even the way you structure meetings or things that have really created value when it comes to executing integration.

Oh, thanks. I think what you're referring to, and I'll share it again, is— so I still live by this, and I was taught this by the CFO at Microsoft who started 2 weeks after I did, a New Zealander, head of the New Zealand Rugby Union. So to say this guy had a bit of an edge to him would be a massive understatement. We present our first deal to him, We all think we're paid by the slide or the word. It's like a 50-page deck is like, "I'm going to get the biggest promotion because I got 50 slides and it's way beyond 4-color and it's really micro font." He said, "Look, I never want to see a deck from you guys that's more than 5 slides, 5 bullets per slide, 5 words per bullet. If you can't do that, then we're not talking about the deal." We were like, "As simple as hard." And so I still use that philosophy, although it's no longer PowerPoint. I know Kison Patel's saying everything ends up in PowerPoint. It kind of does, but it's that whole concept of simple, simple, simple. Because if you start out with 20 slides, 20 bullets per slide, 20 words per bullet, no exec's going to read it. Most people will counter it and you get confused on, okay, this is great. What do I do next?

Jim makes a good point. If you can't articulate in a very concise and quick to the point manner, you're going to lose a lot of people. But also to the benefit of how Mahesh and I do this as well too, Mahesh, get those stakeholders aligned. It's a super great tool to have in your back pocket and you're running and talking and building up consensus to build your teams. It's almost like being a sales guy walking into the cafeteria and 3 leaders, you're like, oh, I need to talk to them. Okay. What's in it for them kind of thing? Boom. You got it. Not only is it good for messaging up, it's good for messaging across and down. As practitioners, it helps to spend time in understanding how to do effective communication and get into the heart of things.

Great point. At the end of the day, I'm very careful to couch this as, here's information for you to be aware of. I'm not asking them for permission because I don't want their approval and then I'll never get a deal closed. It's a delicate balance in terms of making sure that you're sharing and to be able to get their buy-in at the appropriate level, but most importantly, to get the resources to be able to support the integration activities.

That's a good point. I feel like that's like a maturity curve. First integration, you don't budget anything for it. And obviously a lot of you work at very mature organizations where there's a massive budget for integration. Let's hit some of the Q&A. So first question. How do you ensure you right-size due diligence and integration work? We have limited resource and 25 deals of varying size across multiple, very different jurisdictions and due diligence and integration phase at the moment. Somebody's got their work cut out for them.

I look at it like a sales pipeline. I don't know if anyone on this call has done sales. I scratched that itch 15 years ago and I actually was really happy I did it because it was something I'd never done. I wanted to try it a little bit and I really enjoyed it. But I go back and think it's like a sales pipeline. You've got early deals, you got them in different stages. You got to map across those. Where do the right people need to be at the right point? In certain areas, let's say you're like, you're really overwhelmed. You may be well into integration and it may be way down on the front lines of things, and that's fine. Let those people go do it. But you need, let's say, someone in that leadership chain, someone over there to unhitch from that train and come back to the front and get involved earlier. So a little bit kind of like lifecycle management of where people are, the pipeline aspect of it. I find it fun and dynamic. It's a good problem to have, but it's also one you have to keep your finger on the pulse to make sure that folks aren't burning out. Because when you don't have the luxury of having the ability to have either dedicated teams within larger organizations that do this. And you've got maybe like the National Guard model where you're sounding the alarm and people are doing the day job and they're doing this. You've gotta be really protective of not burning them out. It's a balance you gotta find.

It's really important that for some of the core functional areas though, like HR and your go-to-market, finance, it's important that you have dedicated resources because they're, if you have people that, that come in and out, you lose so much of that tribal knowledge. And that's really important when you go through these deals. If you have to spend so much time getting these folks up to speed, it diminishes the time that you can spend on the actual integration itself. So we've always made a point to focus on some of those core areas and have those dedicated resources and then some additional. They still have to be able to flex sometimes if we have multiple deals going at once. Or just depending on if deals are ramping up, if they're ramping down, what's in between. But having some of those core resources in some of those areas really made a big difference for us.

I agree with what you're saying, Carrie. Many organizations go through that to say, do I want to invest in those resources? I don't know what I'm going to be doing. But at the end of the day, if you have a stated strategy and you know that you're going to be growing inorganically at whatever clip of deals, you definitely want to invest in those 3, 4, 5 functions to be able to have dedicated resources, 'cause otherwise you'll spend a lot more time trying to integrate and you certainly will lose efficiencies as you go from deal to deal. Now, I know you can't have a 20-person dedicated integration team all the time, but certainly speaking up some of the functions that Kerri talked about is a good start. And then you can work with the rest of them to engage them, to bring them along, share what the process is, and really help them understand how you go through it and carry them through the integration, at which point you'll probably be working with somebody else for the next product line integration.

I think it goes back, especially the due diligence and integration. At Microsoft, the integration leads ran confirmatory due diligence and technical due diligence. So we carried all that knowledge with us through to integration planning and then operationalizing the business within Microsoft. So That philosophy is not held very broadly. There's a separation of church and state. Typically, corp dev runs due diligence and integration runs integration. But I think it goes back to, you don't need to know everything to do something. People think in due diligence they need to know everything about the company that's being acquired, and you don't. And the— where I draw the line is in support of this strategy for the deal, Those are the things I need to know along with the value drivers. Everything else can be discovered later in the process.

Yeah.

Then you don't waste a lot of time up front trying to figure out, am I going north or am I going west?

There's nothing worse than doing it, running a diligence call, inviting someone in, coaching them to look, there's some brevity that you need to have because yes, everything you have, we'll get to, like Jim said, but then they start going down the rabbit hole and you've got to reel them back. You kind of have to step on their toes and unfortunately bring the conversation back because either don't have time or there's other critical things you got to get to. Some of that managing the stakeholders' feelings afterwards, you got to pull them aside and have that conversation.

I have had that conversation where people will start out like, "I feel like we should," and go, "You know what? How you feel is not relevant to the work we're doing right now." It just isn't. It's a nice to have somewhere else, but not in this process.

Fair point.

There's a bunch of questions related to AI. We actually have a whole dedicated AI series that we're getting ready to launch pretty soon. So I might hold off on some of those because we're kind of doing a bunch of content directly focused on it. So let's get in this one. I see Angel has— IPO dealmakers and leadership negotiated heavily for targets post-close autonomy in sales engineering, such as partial integration plans. However, in reality, post-close is a heavy lift for integration efforts. An attitude is almost, almost flipped completely, almost flipped complete shift, wanting to be part of the purchaser systems teams. How do you deal with these drastic shifts in change management integration plans? Is this more common than not?

If you're going through the situation and their initial take is, we don't want any part of this, and then they realize, oh, we do, that's better than the flip, which is, oh yeah, we do. And then deal gets done. Oh, we don't even want to be part of that. At the end of the day, you got to be flexible. That's where to me, I take that in-state view and go, look, there's going to be some efficiencies in bringing this business together. You got to figure out what those are because yeah, there might be some things that are unique, maybe in engineering product, something over there that's your crown jewel of you're not going to touch that. But you can't tell me that the way you do payroll is game-changing and it's a key differentiator in how you run your business. BS. Payroll is payroll. Sometimes people don't want to hear that. I'll say it different ways. I'm being very frank on this call, but you just got to call it as you see it and have the courage to do that. Because if you don't, you're going to run into a meandering integration that, that won't feel like it's got an endpoint.

Yeah. I'll just take just for sales. I know Todd talked about it across a number of different functions. The thing that we've learned the hard way is to make sure that you absolutely have the executive sponsor and the sales leader. Buy in and understand what is the quota that we're using, what is the budget that we have, what is the model, making sure that they're very crystal clear about it. Why is that important? Is that what trickles down into what we expect the sales leaders to do post-close in terms of driving this, the right type of behavior with the sales reps? Now, it's— I know the question is related to sales integration, but the sales integration practices, whether it is rules of engagement, where does double comm come into play, what does Who owns the territory in this merged organization? Is it an overlay sales role for this, for the folks coming in versus a direct sales role? All of these factors follow what we have laid out as the highest level guide for it. So you have to be very clear in terms of getting the okay from the exact sponsor and the sales leaders in terms of why we are doing what we're doing. Then that helps translate that into very specific sales integration plans. At the end of the day, yes, the seller has to sell it, but having the structure for Sales ops and what I just described, like rules of engagement is super critical. It takes some time to get that, but it's super critical for us to be able to do that.

I see another related question, how to best address sudden change in integration direction from management.

Interesting. The question comes as to why the change in direction? Was it something you discovered as part of the post-close activity? Was this something that was missed as part of due diligence? Is there a dramatic change in the market acceptance of it. So there's— it could be a number of reasons why something like that happens. It also means that something wasn't necessarily looked at. There might be market factors that we might not be able to control. To me, in that case, let's say there is a very specific financial impact as a result of what we're trying to do, and that then trickles down into, okay, how does this reflect in the integration plan itself? We were talking about making sure that we're going to launch this product in the integrated product in 9 months from now, do we have an opportunity to have additional 2 supplemental resources and launch this product within 3 months? The first thing is make sure we understand why there is a change and we can do a debrief on whether the— whether something was missed during due diligence. But the more important part is how do you react to it? And you have to react to it by understanding, is it a quicker go-to-market? Is it something that you need to change in terms of the incentivization for the sellers in order for us to get ahead in the marketplace. Maybe it's a competitive play or a defensive play if one of your competitors has acquired another company.

Yeah, I find that most of those shifts have occurred in the past because we uncover things that we didn't anticipate. Maybe we're not aligning to the financial goals that we've set. There's usually some targets that have been missed. But it boils down to, to change management. That's something that once again, when I say I have a passion toward a couple of things, culture is one, change management is the other. So I, we have a lot of emphasis around that, especially with our ongoing integration between Ansys and Synopsys. And that's the piece where we're constantly trying to determine, has the needle moved and how do we move with it? How do we adjust people's perceptions and how do we communicate to the teams effectively and Even at this point, it's really making sure that people are kind of speaking the same language because of some of the cultural differences and the way that we approach things. It's trying to align and make sure we're all kind of singing from the same sheet of music. A lot of that to me comes back to that, that change management, making sure people are informed and they're informed of why the change is occurring and readjusting and having everyone aligned to those adjustments that need to be made.

My experience is if something changes in the integration planning or direction, it's usually something changed in the strategy that wasn't very well vetted to begin with. And a change in strategy usually leads to a less than desired outcome, has been my experience.

To kind of wrap things up, where do you see the biggest value leak when it comes to M&A integration?

Harry nailed one aspect of it is like some of that tacit tribal knowledge. I think if you're not able to capture that and keep that within your organization, yes, people will come and go, but I think you miss a big opportunity in not being able to write some things down and have some things there. Like I've always appreciated when perhaps it hasn't been the same person in the National Guard model, but they've been able to learn from the prior person or the prior person's still around but can't do it. I think some of that knowledge leakage is critical. I remember I was at a conference, someone was doing a breakout, they were talking about a technical solution, and I had worked at that company a decade before. Someone asked the question and they're like, yeah, we're trying to solve it. I was like, wait, I think we solved that. So I went and talked to them afterwards and I was like, we, that problem you described, we figured that out 10 years ago, but it sounds like that knowledge has been lost. Here's who you need to go talk to. I think they're still at the company. They're not doing M&A work, but go talk to them. They might be able to recall it. It's the bubble gum, it's the duct tape, it's that kind of stuff. And that's not always stuff that gets pulled out of people's heads and written down or captured at times.

For me, the same people topic that Todd mentioned, except in this case, the acquired company's team members, right? Goes back to something again, Kari said, you need to know who the key players are. And if one, two of them, yes, you can incentivize them, a retention plan, all of these different things, but to really get to know them and understand that they feel like they have a path ahead. And not having them continue as part of the acquired company is a recipe for leaking value. There's a number of things that we depend on the acquired company's leadership and the key team members to be able to provide for us.

The one thing I'll add to that, 'cause I do think that's true, and this is short, is that so we've lost the art of postmortems to capture what's happened and how it relates to executing against the integration plan. The integration plan is built in support of the value drivers, the value drivers are built in support of the strategy. As long as that linkage is consistent, it's great. But if it's fragmented and fractured, then you've kind of lost the secret sauce for the deal.

Something to add onto that, Jim, I discovered this doing a pre-mortem, bringing the teams and leaders together and say, "Hey, what are all the things that can go wrong?" That helps get you mentally prepared for things, as we talked about, maybe some integration strategy changes, maybe some big red flags that you see in diligence, maybe some things that come up after the deal is done and you're like, how are we going to solve for that? Not always the easiest conversation to have, but it's better to go in eyes wide open than thinking this is marital bliss and it's going to be happy for the next 50 years.

With the postmortems, one thing that we did, we're trying to do it in shorter intervals, not wait until everything's done. But actually address certain events that we know are recurring. That's been successful for us.

This has been great. I want to thank my great panel roundtable here for taking the time. With that, just a couple quick things. I know we got a bunch of new things at M&A Science brewing up. We got 2 certifications. I got a couple PhD learning development professionals are leading. Look for announcements on those coming soon, along with a real formal industry— doesn't have one, but an M&A assessment.

Score.

And then also want to note recordings like this content, the roundtable operator interviews, all these deep dives, they all live inside M&A Science. A lot of the stuff doesn't get published publicly. If you want access, highly encourage you to become an M&A scientist. Go check it out. Till next time, here's to the deal. Thank you for taking the time to explore the world of M&A with our podcast. We love hearing feedback. Tag us on a LinkedIn post, add a review on Apple Podcasts. We'd love to hear from you. If you need help standing up an M&A function or optimizing one that you already have, we're here to help. And if we can't help you, we probably know someone that can. You can reach out to me by email, Kison, K-I-S-O-N, at mascience.com, or you can text me directly at 312-857-3711. If you just want to keep learning at your own pace, visit mascience.com for a lot more content and resources. That's where you can also subscribe to our newsletter. Again, that's mascience.com. Here's to the deal. Views and opinions expressed on M&A Science reflect only those individuals and do not reflect the views of any company or entity mentioned or affiliated with any individual. This podcast is purely educational and is not intended to serve as a basis for any investment or financial decisions.