Setting Up Day One for Success

I'm Kisam 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 MA Deals. Welcome to M and A Science where we curate knowledge from the best in M and A to continuously improve. If you're interested in keeping up with the latest from M and A Science, subscribe to our free newsletter@mascience.com Every week we share highlights from interviews, invitations to events, M and A role openings and other resources as we build the greatest community of forward thinking M and A practitioners. Again, that's mascience.com I'm your host Kisan Patel, CEO and founder of M&A Science. Joining me today is Chris Evans, recent head of Corp Dev Integration at Amazon. Today we're going to talk about how to set up Day one for Success. Chris, how are you doing today?

I'm doing great. Thank you very much for having me on here. Very excited to talk about this fun subject.

Thanks for taking the time with me. Can we kick things off with a little bit about your background?

My background started in finance. I was a tech investment banker in London and then Hong Kong for around five years where I did various fundraising and some M and A work and then I realized that I liked finance but I did not like investment banking. I wanted to get away from that. I did an MBA in the US and then after that I joined Amazon in finance and so sound like a fun tech company back in 2005 doing some interesting things. So I joined in finance and at that point Amazon used to run target.com and toys r us.com and so I supported that business and then I got to know the folks in Corp dev and then I joined the the Corp dev finance team. So work doing valuation work and financial due diligence did that for a couple of years and then the one person that was working on integration left the company and I thought that seems fun and sociable when you get to touch on such a wide array of subjects of which I know very little about. I put my name forward for the role and was given it and then for the 14 years after that I ran corp dev integration at Amazon. Through that time we closed over 100 transactions, built the team from just me up to almost 30 people and had a lot of fun along the way. Fun came to an end a few months ago. I left Amazon and have been thoroughly enjoying some time off and at this point I'm doing some consulting work and helping out some small Companies with some of their M and A ideas. And it's fun to talk about all the shenanigans that happen through M and.

A. I can imagine needing the break after on a hundred M and A integration projects.

Wonderfully refreshing. You don't think about it when you're in the thick of things, but I'll say my blood pressure came down significantly within a few months of leaving that job.

You have a unique background. You're a rare breed to start off in an IB background, run the finance track, then pivot over into M and A integration. What's there that has you able to do that? I feel that doing enough of these interviews, Corp dev people are wired a certain way, Integration folks are wired another way. What was it about yourself that found home in M and A integration?

Yeah, I think it is that diversity. I'm a naturally curious person. I really enjoy learning about new industries, new countries. Whenever we would sign a new term sheet, I'd just be excited, like, wow, it's going to be fun to learn about this aspect of cloud computing or E commerce in the Middle East. Got to travel to fun countries and engage with fun cultures and just learn about new things each time. And so I think that's fundamentally what kept me engaged and interested. The funnest background is helpful. To take an analytical view on things and bring data sometimes into more qualitative subjects is helpful. Amazon's a big data first company as well. That helped me be successful, but it's just more that natural interest really just kept me going through all of that, through the many businesses that Amazon had. And the global scope of Amazon was just fascinating.

Cool, that's interesting. I just thought all the glories on the corp dev side and all the hard works on the integration side, I was curious what drew you to that.

We had some fun here and there. It was good times.

Let's get into it. Before we jump into the day one, I wanted to get on the same page about how you think of the phases of the deal. Essentially, here's all these activities you have before day one. You have day one itself and then post day one.

From an integration standpoint, it's critical to be involved early on through the process. And my team would engage at the term sheet sign and we would run the due diligence process. We would run it from soup to nuts. We would get the team together, we would prioritize and focus and drive the due diligence process, which I think is critical in deeply understanding the company. And so if you deeply understand the Company and the people who are there and the business sponsors and the acquiring business within Amazon. That sets you up best to be successful on the integration side. Day one is really when that flips. So you work through diligence and deal folks negotiating a transaction and then you sign the deal, made the announcement, and then you move from being two parties to one party. But you step into that timeframe having a deep understanding of the business. That's where you can really help. Then from that point onwards, it's working very closely together with the acquired company to set them up to be successful within Amazon.

Okay, I like the way you described it. So we do have the pre day one, the day one itself and then post day one. How important is it to get day one right?

It's absolutely critical. And so first impressions matter. This is a critical moment to build momentum. If you get things right, then the integration is set up to be very positive. You can also dig yourself a big hole on that day as well. It's very critical. And especially as it is a key day in acquired employees lives, there are decisions that people make in their lives that take them on different forks. Do I take this job or not this job, or should I move this to this city or not this city? And an acquisition is a similar fork, but it is pushed on people they didn't decide to be acquired. And we are rolling out a huge amount of change to these employees which none of them were asking for. I take that incredibly seriously. And I want people to gain comfort on that day so that they are positive about the future and they see the good stuff that can come. You have to care deeply about the employee experience, be super thoughtful around what their concerns are through that day. And that day sets the momentum for the integration over the long term.

What you're describing sounds like wedding day.

Yeah, we might come back to that analogy in a little bit. But yes, it would be the first time.

It's a big event. You want it to be memorable and really set the tone in the positive direction as opposed to negative.

Absolutely. There's a lot that happens on that day one and there are things that can go right, many things that can go wrong. But being a great integration manager has a super detailed and strong plan in that there is a cadence to the day and then you also have the time to deal with the inevitable challenges that crop up, of which there will likely be variety through any day one experience.

To clarify day one, we have announce, sign, close. Where do you typically see your deals fall? Do they often announce and close on the same day.

Particularly at Amazon. You have to be very careful using the term day one, because every day is day one at Amazon and we used to confuse ourselves quite frequently. But in general, day one is really that transition. As you mentioned, there's a pre phase and a post phase. Day one is the first day you go from essentially being two teams to a single team working together closely. So day one to me is the broad announcement day. It's the day that it goes from a kind of very tightly held M and a project with a handful, maybe dozens of people being aware to the time that it is known broadly across that company and probably or potentially publicly as well. It's that transition to being the day we can help and work from there. Typically I would see that being soon after the deal sign. And there's obviously some reasons you might want to hold it until close for various reasons, but typically once the deal is signed, want to work together closely and even pre close. That work is planning, it's organizing, it's getting to know each other in more detail and obviously can't implement until close. But I think it is important to get started on that work as soon as possible. There's also an increased leak risk. Once a deal is signed, there is an increased leak risk. I would much, much prefer to lead the message. I want employees to hear about the acquisition from their CEO. I want them to be able to ask questions right away and have any concerns addressed, which you lose if there is a press cycle on that acquisition. So typically having the deal signed and then shortly thereafter having a day one an announcement is important.

That day one announcement is internally focused before it potentially goes external.

Ideally it's done at the same time and there is company all hands and an all employee meeting will be scheduled and an invite goes out maybe the evening before for the following morning, which naturally concerns people. People do have concerns when they see that come through. I think it's a necessary evil. And then say you set an employee announcement for 9am, the meeting starts at 9am and you have all the employees there, and then a press release or a blog posting is put up at exactly that time. And so people are hearing about it from their leaders, from people they trust. Obviously, as soon as a broad number of people are being made aware of that acquisition, it's going to become public in some way, shape or form potentially quite quickly. Having a broad communication strategy, both internally and externally that is aligned is key. But I think the critical thing is for employees to hear it from their own leaders and to be able to engage with their leaders and with the acquiring company as soon as possible.

When they do engage the leaders, then it's in the present sense that today we announced we're acquired or getting acquired by and they get right into it. Can we walk through what happens on day one? What's the first thing you gotta do?

We're always very careful with the terms. That difference between being signed and closed is obviously very important. And concepts like gun jumping or working too closely together. Posts that announce can be a tightrope to walk and needs to be very thoughtful. And the phrase we have signed an agreement to acquire a company is typical message that would get used at that point. But when it comes to the app, actual day in general, how I would like to do it is like the night before there is a dinner or a social event with key leaders. There are two sides to a negotiation. It can be contentious. And so having an event where leaders can get together both from the acquiring and acquired companies, get to know each other outside of a conference room to actually build some camaraderie I think is important because tomorrow morning, like these people are going to be up on a stage together. Employees, they notice camaraderie they're looking for does my CEO trust this person that's up on the stage? People are very conscious around demeanor, conscious about any hesitancy between folks. And having a way to build that camaraderie between leaders before the actual big announcement is important. And then the day of another key group of folks is managers, or not the highest level people at the company, but people that are seen as leaders, because employees typically ask their managers questions and they ask people they trust first. And taking another group into the tent before the bigger announcement and providing them with messages and giving them an understanding of how you see that playing out is important because if employees are sat there and they have questions and they talk to their manager and their manager says, I've only just found out about this, I know no more than you. And then they go up the chain and get the same answer, then that can be disconcerting to people. So if there's any way to take kind of managers on the journey as well, that can be incredibly helpful. Once you've done that, then having an all company presentation and potentially a public statement as well is key. The CEO would make the announcement to the employees and saying, we've signed an agreement to be acquired by Amazon. Thankfully, everybody knows who Amazon is. And so people have opinions, which is helpful. But there would be some applause or there would be excitement, but there's anxiety that kicks in as well. And so the second slide was titled, that's great. But what does this mean for me? That's where we hit up front. Do I have a job? Are people going to have a job? Will their manager change? Are there going to be any location changes? What do we expect from job changes? How will compensation and benefits change? In the fast, fast and drawback cases, we could say, like, everyone keeps their job. We're going to build and grow and invest in this company. And once you hit across the key themes of what does this mean for me and try to address the key elements of anxiety that are in people's head, you know, you can feel the pressure in the room decrease. And that's when people look at this and like, actually, this, this could be great for us. This is a huge opportunity. And people start moving from the negatives in the press. They see acquisition, they hear about layoffs, they hear about cost synergies, whatever that means, and they hear about the negativity of it. If you can address those things up front, focus on the positives and focus on key areas of opportunity, the entire demeanor of the room changes and the energy is a big change. And just hitting that upfront because until people hear the answers, those critical questions they have, they're not listening to anything else. You can have the happiest story going. If people don't know if they've got a job or not, they're not going to listen that well. And so it's very critical to address those key concerns up front and to have a lot of clarity around that. One other aspect that we found very helpful is sharing an integration. North Star companies have strategies. Their strategy is going to evolve post close. It can be very helpful to align a company around a vision and the clearer and cleaner that vision can be. Or we acquired this company because we want to launch X amazing thing for customers on Y day can be a real rallying flag to people as well as to answer the question like, why am I being acquired? Why did a company acquire my company? And so having that North Star can be important, especially as the core strategy of a company can change. And so that can be a key focus as well.

I got four areas you touched on. One is getting the execs together for dinner, trying to get some alignment and camaraderie developed. Second, similar with the managers, really keeping them in the loop and part of the journey. Third, your public message. How are you going to communicate the deal? But also clicking down into the team members answering, what does this mean to me essentially the critical questions for them. Then fourth integration, North Star, what's the big thesis that's going to guide the teams?

Absolutely. And then at the end of the day sending everyone a message with all of that again. And the written communication with those key messages. People are in a. It's a busy day for folks and being able to follow up with written communication with clarity around some of these areas is key as well.

What are other things you need to get done? Right? What does success look like on day one?

The more anxiety or the more uncertainty you can take away, the better. I used to push to have offer letters in people's hands on that day. It's one thing to say everyone has a job and this is going to be great. It's another thing when people can literally hold a piece of paper which says this is your job and this is your compensation and this is your benefits. I can stand up and say things, but people don't know me, people don't know anyone from the acquiring company. And so it's. That all sounds great, but what's going to happen in reality? So giving people a piece of paper, which is that contract, which is that offer letter which has that details, is very positive. The other piece is trying to share as much information as possible on that day. Oftentimes there can be a financial incentive to people when being acquired. There can be a bonus or a change in salary or some other aspect, but. And then down the road you can get caught out if, say you do benefits integration and you take away. You say, I know you have Taco Tuesdays, but Taco Tuesdays aren't a thing at my company, so we're going to take that away. But that naturally upsets people. If it's a gym membership, like people basically want to be compensated for that. You can't point back to, oh, but you had an acquisition bonus or you had an increase in salary, people, well, that's great, but that was then, this is now. This is an incremental thing and so therefore I'm upset about it and you need to do something about it. The more you can bundle all of the news as possible upfront and give people a clean overview of this is your employment situation. That's incredibly helpful. Putting a face and a person to the company, to the acquiring company is key. And after there's this event, like having a social event, having some way for the acquired companies to interact with people from the new company, you don't want to do the presentation and then say, oh, thanks everyone. I need to get back on a plane and fly to wherever. I'll see you guys all again soon. It's much more helpful just to stay around to chit chat with folks to understand what they're thinking and put a face in a person to a company that people don't understand or don't know that well. I'd also say a lot of people want to attend day ones and the announcement day when they're in person. And I would always be very selective and thoughtful about who would attend from Amazon. I would want to take people who are going to be involved in the process going forward. Any acquiring company is typically way bigger than the company being acquired. The company getting acquired, they get lost with the number of people that roll through on a weekly or monthly basis on integrations having here are the here on day one, here's their roles. This is going to be their roles going forward. As you have questions about this and this, talk to this person and have everyone who is there has a role, they have a role in discussion go forward. Maybe you do breakout sessions, really put people to work, have them engaging actively with the employees as well is key. And so having a very positive engagement with employees after that announcement, once things calm down a touch. The last point on this is this is the opportunity to put the integration manager front and center. The integration manager, I think any integration manager should be the best project manager that you could ever expect. As a start, I would put that person on the stage. They would be the marshal ceremonies. They would be able to be there and engaging with employees, sharing contact details, sharing. If you have questions, come to me. Be the person that can answer questions. Be the person that can get stuff done. Be someone that employees can start to trust. That's a critical role for an integration manager is taking these acquired employees on the journey because there's a lot of change that's likely going to get rolled out. And having a strong relationship and having built trust from that first day is important and really enabling open communication with employees. Employees at a company, they know where they struggle, they know what opportunities exist, oftentimes more so than their managers or the senior executives at the company. There can be some great integration ideas that are generated from those engagements. And putting the integration manager front and center and having them start there as being a leader for the integration and somebody that employees can trust is important as well.

What's the ideal way to introduce that integration manager? Because in my head I'm thinking, Chris, if there's anything that goes wrong, it's all him. How do you properly use the integration leader?

That happens as well. The integration manager is the person who's responsible for the successful, smooth transition to being part of the bigger company. On the acquiring side, they're responsible for the success of that integration within Amazon. But within the acquiring teams, they're the ones that people should look to. That person is face of Amazon or the acquiring company that people should look to. And they're the person who can help. They're the person who, if you have any issues, they're the first point of contact. They should be there and be helpful. One thing that I used to focus on day ones is there would always be one or two people that came up with, oh, I work in this area and I bet Amazon's got a thing in that area. It would be really great to chat some people or what does Amazon do here? Whatever that thing was, sometimes it was, it was going to be important. Sometimes you were to stack, rank it, it would not come up too highly. But regardless, I would lean into those folks. I would lean into those folks. I would go out of my way to help them because I know one, that's just the right thing to do. But two, I know that they turn around and be like, oh, yeah, that Chris guy, he was actually really helpful. Yeah, if you've got questions, you should definitely go to him. And if I was helpful to them, they'd probably tell a few people. If I was not helpful to them, they would probably tell a lot more. Taking that attitude of being someone who can help, somebody who can help people, help them either understand what is happening or just practically help them be better at them, more successful in their jobs and see the opportunities that the acquiring company can provide that people couldn't see or wouldn't be even have access to as a standalone company.

Can we roleplay this one out? I want to make sure I don't screw this up. So let's say we acquired a new business. Chris is the head of integration. Give me a little coaching me as a CEO, Introducing you on stage. What's the language I'm going to use to this newly acquired organization, Company X. I learned I get in trouble if I use two specific examples. So Company X we acquired.

Yeah, I think it's, this is Chris and it's his responsibility to set us up for success. This is a very positive thing. It's great and there's a lot of opportunity and it's Chris's role to make that as smooth as possible. There will inevitably relatively be ups and downs. No integration is Perfect. But it's Chris's job to make it as smooth as possible and to set us up for a success as best as possible. Any integration manager can be amazing and a deal can still go quite wrong and vice versa. An integration manager can be very poor and a transaction can be very successful. Every action an integration manager does, it increases the chance of success of that transaction. Anything that person touches, it makes it a little better, it makes things a little smoother, it helps helps a person be a little better at their job. It reduces the anxiety of a person, it accelerates the sales cycle of a product. And it's rarely a big groundbreaking something. Integration is a lot of small improvements. It's a lot of incrementality that when you add those together or multiply those up, it has a huge impact and it's frequently not very glamorous. There's a lot of hard work and down in the details, but that's what is necessary to make any integration successful or to maximize the chance that it's successful. Because everything that integration manager touches should make the interaction between the two companies a little bit better.

Got it. That helps a lot get a better understanding and sense of fundamentally how to communicate that. You know, we talked a bit about the executive alignment using the dinner and just some informal meeting outside the typical structured approach to develop the camaraderie. That sounds pretty straightforward. I'm a little foggy. When you click down to the managers and that approach to keep them in the journey, what would be the tactical approach to doing that?

Underlying a lot of this is a broad communications plan and from what I would call a TikTok, which is sometimes minute by minute overview of who does what, where, why and when. And then wide variety of talking points and FAQs for managers. One is explaining the rationale and having them be comfortable trying to address their what does this mean to me questions but then going through those details and explaining to them, trying to address the questions that employees will send their way and having a very detailed employee FAQ which has every question we could think of that employees would ask in relation to this transaction and what is an answer to that so that managers have the chance to have that read through that and just see where Amazon is coming from in a variety of ways that just helps them look organized in front of their employees, builds the trust of their employees in them and any way you can do that and helping them be successful on that day. So having those attributes enabling them to ask their questions, maybe they're slightly different question. It's A smaller group, very large employee announcement on all hands. Sometimes there's not too many questions. People are hesitant to ask questions in a larger group. You can do a manager's meeting in a much smaller environment when people can ask some of the real questions. It's another way to understand maybe there are employee concerns that we might not have thought of can come up in those discussions as well, and we can have a good active dialogue in how to address those or how to be thoughtful around those as they may come up in a big session.

You're essentially preparing these managers for what's to come next when it's time to deliver the broader public message that they're prepared to answer the what's this mean to me? And those critical questions.

Yeah, absolutely.

What's the timeframe and time commitment to work with those managers to have them really prepared for announcement?

These things are a balance. Yeah. Because you also, the more people you bring in, the more risk there is of having things leaked, whether that's internally within the company, whether that might be publicly. There's a judgment call as to how broad that happens. Everyone wants to know as far in advance as possible, but the reality is that's rarely achievable. It's a balance. It's typically not a long time period. You also have to be careful in a situation where there's a lot of people in an office. People notice when suddenly all the managers disappear. People notice where execs are or when they're around or when they're not, if there's a sizable population in an office as well. So you also have to be considerate about these things. But typically, say an employee, all hands is scheduled at 10. You have the manager meeting at 8 or 8:30. You have a discussion for an hour and allow them to read through the. Through the documents that were provided. But it would turn around pretty quick.

Okay, when you mentioned the integration North Star, can you walk me through? How do you shape that, get it right?

Well, AWS bought a number of small companies turning around and saying, our new North Star is to launch an AWS service based on the acquired company and put that in the AWS portfolio of services. And people get very excited about that. That's a real stamp of approval. People see it as a stamp of approval of this is great technology that we think could be incredibly valuable to hundreds, thousands, millions of customers of aws. And putting that down and saying we want to launch AWS service is a natural example of that, as that's very clear and specific. Okay.

It's really just a big vision message at the end of the day, which a lot of companies would have as a strategy. You're essentially, you're shaping that narrative specifically for all the employees involved.

Sometimes companies, their vision or people set up milestones around fundraising or ipoing and people are very focused in working in a company. And with a goal being we want to be ready to IPO and then say that company gets acquired, suddenly that's totally off the table. And so there needs to be something to focus the employees on. Okay, that's gone away. What does that mean? What's next for our company? What's our big audacious goal goal that we've gone for? Because you've been very focused on getting ready for an ipo, but now that's disappeared. What's next? It's important to reset people's expectations and it's typically a good opportunity to set new large goals. With all the opportunities that come from the acquiring company, there's typically a number of big audacious opportunities that can be achieved through that acquisition.

How do you keep it from getting forgotten when it turns into many people involved with a lot of tactical activities they're executing on and you hear this often, the big picture alignment that fizzles out. How do you keep that from happening? How do you keep the day one momentum?

It's tough. Yeah, it's tough because people naturally dig into the weeds, get into the details of execution very quickly. And the communications plan for a day one is significant. But once we're done with that, it's having a cadence of communication with employees over time. Like how do you feed these same messages into an ongoing cadence of communication more broadly? And I think any integration management office should have a communication of cadence with employees, whether that's newsletters or blog postings or being part of all hands or company meetings, whatever fits the culture of the company that was acquired and having consistency and communication around what is happening with the integration, sharing what is happening across the acquired company, helping the, obviously the acquiring company, helping the acquired employees better understand the company that just bought them and the culture that they're coming into. It's critical to have a very active communication strategy through those first three, six plus months when there's a lot of change that is being rolled out to employees. And as part of that, there's a consistent reiteration or updates against these goals. What is happening with these very large goals starts off with just a single statement and then hopefully there's a timeframe to that. There's Resources being aligned to it. There's momentum that's being gained post close, the momentum that's being gained against that significant goal. And it's something that people are hearing on a regular basis.

It reminds me of Go to Market where there's a big emphasis on customer journey. Gary, what you're describing sounds like an employee journey and what that's going to look like.

Very much so. One of my better decisions over time at Amazon was starting a change management team, and which I thought at the time when I set it up was a sort of cultural due diligence and integration team given culture is one of the biggest challenges that people have through integrations. But having a wonderful and active change management function that is deeply thoughtful about the employee experience both on day one, but then on a continual basis is absolutely critical. And it makes a huge difference to have a very active engagement with an employee base through that time of significant change.

I like the other part where you talk through offer letters, how you provide them that day. I thought that was really interesting. How do you do that? That's a lot of offer letters to deliver on one day.

It's a lot easier now than it was when we'd have boxes of pieces of paper that we'd be schlepping on planes and sat there until the early hours stuffing envelopes, which is what we would do a good a few years. Thankfully, things are much easier with electronic documents now. The documents are one thing, the decisions in the documents is actually much more challenging. And so what should people's compensation be? How may compensation change? Some very significant decisions that are made at that point without having detailed discussions with every single employee. There's a balance of what you commit to at what stage, and it depends on the size of the company and the size of the employee base whether you are able to do that in an ideal scenario. So providing as much clarity as possible on that day. One announcement is really important, but sometimes scale just gets in the way. That becomes not possible at a certain point. But if it is possible to do that and make those decisions, it is incredibly beneficial. It just enables people to move past their uncertainty, just move to the new normal or have a deep understanding of what the new normal is versus there being a lot of conversations about titles might change or compensation might change or benefits might change, which can cause, you know, uncertainty. And uncertainty doesn't help anyone. And taking as much of that away as possible as quickly as possible is hugely beneficial.

When you talked about the faces of the acquiring company, what's your approach to that in terms of identifying them and positioning them to be good faces of the acquiring company, everyone wants to know.

Who the CEO's new boss is or who their new boss is. And so having that person be front center and be a big part of any presentation or any discussion I think is critical. Is probably the most important person to be in attendance. And if there are business integration folks or people who are going to be involved or lead certain aspects of the integration, they're important. And then the integration team, if there's a central integration team, having them there is very important as well. If you are doing your offer letters, obviously a strong contingent from human resources or people team of any company as well, to manage any of that change that you actually roll out that day is key. But I think it's. It's bringing leaders that have a direct relevancy to that business and that people are going to see again. We talk a lot with the business sponsors that having active travel or now very actively participating in all hands and being a very consistent face to the newly acquired base is very important. And so that day one is the first opportunity to do that. And then setting a cadence of engagement over time.

They usually functionally, no, I think it's.

Mostly the business leaders, you know, the GM of a business that's acquiring it, maybe the head of technology or the head of engineering, those folks are sort of the key leaders that people are looking for. And then if you're actively talking about functional integration areas, then those other folks are secondary to that, but not as important. On that very first day.

How public are you about the integration plan broadly with these newer acquired employees?

Amazon acquired Zappos a few years ago or 2009. 1 a few years ago ago. And so Zappos was this sort of wonderfully quirky company that had amazing culture and deeply held key values and what one of theirs was, open and honest communication. It was a critical part of that integration. And I would typically be fairly guarded and careful in what was shared. But the Zappos experience really showed me how the benefits in leaning in and being more open. Obviously, again, there's a balance about what you can and can't share. And, and there's also a balance of what clarity you have at certain times. There's a depth of detail that only comes after kind of active engagement with more people, which you can only do once the acquisition announced. But my default was to try to share more, was to lean into sharing. And I could feel some of the Zappos leaders sat on my shoulder talking about Open and honest communication being critical in taking people on that journey. And it's balance, but more is balanced better.

Okay, that's great insight because I think that's part of the maturity. Get more comfortable with being transparent. It goes back to your point earlier about how do you get the employees engaged in a way that's meaningful earlier than later. How early do you start planning for integration?

From that moment of engagement. Engagement being a term sheet is coming around. And up to that point it comes down to why are you buying a company? Hopefully folks can answer that question and the time they assign a term sheet, which means that you can start to formulate what one integration plan could look like to get folks set up. Because integration starts with the strategy. And then as an integration manager, it's hearing that strategy or that business strategy that is out there and then thinking about, yes, okay, every company has a framework of integration or things that are typically done, but then what does that strategy break? Or how do I tweak and change and adjust trust that framework or that playbook to maximize the success of this transaction. Some people get hung up on playbooks and frameworks and I've had people in the past be like, oh, Chris, we don't need integration help, just send me your playbook and we'll take care of it. It's like, well, the playbook is 10% of the value. It's essential, or 20% of the value, it's essential in its key. But the expertise and the value truly comes from an integration manager knowing when to follow it, when to throw it out, when to tweak it, adjust it to best support that acquisition strategy. And so from the time of engagement as an integration manager, I would always be thinking, okay, I hear this from the company, I hear this from the business sponsor. How does that tweak and change the approach I think we should take here?

Yeah, how does that thinking shape? I'm trying to imagine this from the earliest points of you learning about a deal. I'm imagining you digging in, trying to understand what the actual value driver of that deal are. How does that expand out to those areas that are going to drive the most value in terms of integration activity.

Working through diligence, unsettling the company and then starting to write things down on a piece of paper and before committing to the transaction, having a clear, maybe high level plan, what is going to happen post close on a deal. That sounds all quite straightforward, but the difficulty is that people can sit down and talk about things at a high level. The reality is that people are interpreting those in different ways. And so once you start writing things down on a piece of paper and saying, okay, here are the value drivers, here's ways that we can best move these forward. Various people who are going to be involved going forward have differences of opinions on that. Getting on a piece of paper pre sign and driving alignment with the business sponsor and their team and related parties is incredibly helpful in just getting clarity of a vision. And then once you sign the deal, like once you go through the announcement and then sharing that with the acquired company and the acquired company who's been very focused on getting to sign and now is thinking about, oh boy, what's happening next, you can turn up with, okay, and this is how we set you guys up for success within this bigger organization. It's getting that on a piece of paper and getting alignment internally and then actively sharing it with your quiet company is critical.

It sounds like a pretty iterative process from starting off just before you sign an LOI and then progressing all the way to announcement.

Diligence is deep. Everyone's understanding of the company is evolving through that time. You have to take a very iterative approach because a lot is changing through that time. As you're just learning more about the company evolving. Maybe the strategy changes, maybe things are tweaked based on what you've learned. There's always surprises through diligence, you know, good and bad. There's always surprises post close good and bad. And having an iterative approach, that's integration. That's the again that value of an integration manager is being able to deal with the ambiguity and having the ability to take on that new news and figuring out how to best tweak and adjust the integration approach and take everyone else on that journey and trying to be one step ahead of others. Things will crop up and people will get concerned about that. The integration manager is a job where you can't turn up with an issue without having an opinion on the solution. The job is that issues arise and an integration manager needs to have an opinion on the solution. Solution.

That's why being rigid on playbooks falls apart.

Exactly.

How about the communication plan? When do you start formulating that?

Yeah, I think it's similar. Do people have strong opinions about is this going to be a stealth transaction? Is something that should be talked about early on. What are the things that are going to influence the communication plan? The communication plan is set up to support the broader integration goals. And as they get defined and get more clarity, then again the evolution of communication plan is there as well. Again, it's an iterative process. Some of the bigger decisions, having opinions on the those going into due diligence is is appropriate.

Who ultimately owns it? Is there a comm work stream or hr?

So I think different people do it different ways. Most companies have a PR team. They can be very focused on the external messaging and then obviously people or HR team who are focused on employees. And there's a lot more audiences that need to be communicated to beyond those two, whether that's vendors and suppliers and customers and governments and a wide variety of others. When something is super cross functional and there's not a natural leader, it falls on integration manager. Some organizations are run as pr, some are run as communications. If there is a communications lead that's helpful to have all those run through. If it's split into kind of PR and the business and HR and others, then okay, there's the integration manager. All roads lead to integration manager in that type of situation.

Like many other things in M and A, it depends what's the biggest challenge on day one?

The inherent complexity of the day. There is a lot happening on that day. There's inevitable curveballs that arise as well. And so having very organized and having a lot of written the communications documents, this sort of TikTok minute by minute plan, having talking points for all key audiences, I think that takes care of a lot of potential churn that can arise. Just ensuring that people are aware of what the days look like because things will arise. There might be errors in data, there might be other issues that crop up through the day which is where an integration manager should be trying to spend their time. And it's just a very busy and stressful day for any kind of integration manager because you need to deal with things that the curveballs that crop up. And if you don't have a very clear and concise plan to start with. If everyone's asking oh hey Chris, like where should I be next? Or what time is that thing again? Or where are we doing breakouts or which room should I be in? If an integration manager is spending their time addressing those, then the curveballs, the fires that start smoldering, you know, a little kindling can really take hold versus if the day is organized and there's things that crop up. The things that start off as little kindling can be taken care of quickly. Quickly.

So the biggest challenge is the surprises or stuff that pops up. And the best thing to counter it is really planning ahead.

Yes.

I can't point anything that's like a particular common challenge that you see or maybe even your own intuition to know that, hey, I gotta address this from experience so it doesn't get ahead of me.

Some words and phrases that leaders can use such as we will do no harm or this is a merger, not an acquisition, nothing is going to change and things like that. Some of that terminology which people believe and think they're calming acquired companies down, a thing that people want to hear and it's going to be calming to folks, but then is actually counterproductive because folks typically, if they work at small companies, things change all the time. Saying nothing's going to change on the back of this acquisition is counterproductive. Consistency of message across people. When you have many people from the acquiring company being there and engaging with employees, many of them, they're going through an M and A experience for the first time. And just the messaging, the consistency of the messaging that people provide and avoiding some. Some kind of hot buttons, such as some of those phrases.

Okay, I like that. Be pretty forward about the change to come. Any other big lessons learned from your experience, Chris?

There are many. There's a lot of scars. Emily's hard. Integration is hard. And so we've all learned from lessons along the way. There's good ones. Never play a video in the PowerPoint presentation you're trying to give is a good one. Never seem to work out well. Simplicity is good on those types of things.

What's day one of day one like? Like, and I mean that in a cultural reference because I think one of the thing is creating some kind of unity around culture going forward. And obviously Amazon's very well known for the day one culture. I got a younger brother that works there and even seen the good professional changes that's made on him. But I'm curious, like, how do you drive those elements that are really unique to a parent organization's culture and start shaping that with this target company you're acquiring to really keep that similar kind of momentum or alignment around that culture. So it really becomes all Amazon or.

All unified comes back to that overarching broader communication plan. And any acquiring company's culture is going to be nuanced and detailed. And so it's starting on that first day one at the highest level. What are the core values of the company? What is the mission statement or core values? You start at fairly high level because again, people don't necessarily remember too much much. And then it's following up from an Amazon perspective. There was the leadership principles which Amazon holds very deep, that the communication of the language of the company. They are talked about in most meetings that happen at the company. People actively reference them consistently. They're definitely not words on the wall that people don't discuss. And so we would have a cadence of education, like a cadence of education of what is Amazon, what's important at Amazon, you slowly peel back the onion of, okay, this is the kind of the mission statement, the high level. And then it's, okay, here are leadership principles. And then talking about they are or what they are and what they're not, and then they talk about how they're used as mechanisms within the company. You know, in performance management, people talk about leadership principles. How are people aligned to Amazon leadership principles when you're talking about annual performance and once you get there, then people are like, oh, this is how people are judged, Amazon. This is how people think about whether your high performing employee is whether, you know, you're demonstrating some of these, okay, this is actually really serious. But it's that kind of cadence of education and consistency of message and being clear and across time. It can't be, oh, here's a 20 minute presentation, all right, you guys are good, let's go back to work. There needs to be a stream of education that happens. And also if you do that, a presentation is theory. And then people start to interact, they can see like what's happening. And then if you chat to people again in, in a month's time, ask the question like, okay, how has people's interaction been since we last talked? And people can say this thing happened and it was, yeah, I could. Someone talked about bias for action in a meeting. I was surprised that people actually do use these words, words. And you can have that engagement. And so you have a theory of a presentation and then people's practice for a month and then another discussion. And again, it just takes people on that journey in being part of a big organization which is naturally going to be culturally quite different to the one that they've been in for a period of time.

That ties back to think of it as an employee journey. And incorporating these lessons around the principles, values and ways of working as opposed to fitting that all in as part of day one.

Active engagement with employees is key. And whether it's organized meetings, I think now with prevalent use of Slack and other very active communication mechanisms is helpful for M and A. It enables greater engagement with an employee base. I think those have been particularly helpful and you know, questions that are put into slack channels which the whole of the acquired company can see and what Amazon's responses to Those are is incredibly important and is again a good way to have broad communication across a wide number of people in an affected niche Needs.

Pretty cool, being responsive, answering the questions quickly directly getting a sense of how the company actually is to work with. Chris, what's the craziest thing you've seen in M and A?

So when Amazon acquired Zappos, Zappos talked about it as the marriage. We closed a deal towards the end of the year and then Zappos was having his holiday party. A bunch of us went down and got invited. The holiday party. And it had a wedding theme and there was lots of people walking around in kind of wedding attire. Fire. And then some people actually got married. They had a service. There were, I think two couples that got married at Zappos's holiday party in 2009 of which was a celebration of the wedding of Amazon and Zappos. So that was pretty crazy. But it was very, very fun as well.

That is crazy. I wonder if the M and A deal influenced the decision to get married. I don't know. I love that story. That's very crazy.

Yeah, it was a lot of fun. A lot of fun.

This has been great. Thank you for taking the time to help me become a better M and A scientist.

Yeah, thanks for having me here. I'm happy to share. Brings back a lot of fond memories. Day one was my favorite day of any integration. As I said, the day that you go from being, you know, on the other side of the table to being on the same side of the table. The day you can actually start to help. The day you can help, you can support the day you can just start doing good things. My favorite day of any integration.

Big day. Those of you still with us, thank you. Till next time. Here's to the deal.

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