A mid-market perspective on decision making during M&A transactions

Execution of an M&A transaction generates thousands of decisions, most of them with minor impact to the investment thesis. But these small and medium decisions often bog down the decision-making process when the distribution of authority is ill-defined and leadership is consistently seeking consensus and/or input from the broader team.

The solutions I offer to circumvent the decision making merry-go-round are not complex, but often take guts to apply:

During Diligence

1. Perform an abbreviated stakeholder assessment to identify what investment model decisions will have the largest impact to employees and customers (e.g., pricing, facility consolidation, distribution channels).
2. Identify the top 10-12 decisions that will need the full Management Team’s input and approval (hint: use the results of the stakeholder assessment as a starting place). Then create a simple decision document to manage these decisions as information is made available.

During Integration Planning

1. Once the interim organization charts are established, create a decision matrix that identifies the responsibilities of each departmental leader regarding decisions for each department. This can be stratified by “Reviewer,” “Approver,” and “Informed Only.” When new decisions arise leverage the matrix to quickly circulate to the appropriate team members. In a merger, it will be important to have fair, but not equal representation from each company – challenge yourself to have only one leader per department.
2. Develop a “decision calendar” for the first 100 days to create a sense of urgency and hold the parties accountable.
3. Use executive meetings to get the Management Team in the habit of making decisions and not just providing a status update on the transaction. Use basic meeting facilitation practices, such as, identifying outstanding decisions in the agenda, circulating supporting material in advance of the meeting, etc.

During Integration Execution

1. Give decisions an expiration date and designate an ultimate decision maker that can make the final call if a decision has not been reached by the expiration date.
2. Identify and communicate the critical path of the separation and/or integration so that everyone is aware of the comprehensive impact of delaying a decision.
3. Use change management tools like a change network of employees to disseminate decision rationale and champion the decisions.

Death by committee can slow integration and erode synergy opportunities while dividing and conquering allows more to be done while creating trust across a new Management Team. Challenge yourself and team to try these simple tools that empower the team, expedite decisions, and allow leadership to discuss only the issues that have material impact.