At a Glance
A variety of research indicates that between 46% to 50% of merger and acquisition programs (M&A) fail.Â
Ensuring a successful acquisition integration is no easy task. Renoir’s approach aims to help client from a tactical perspective by ensuring a structured critical path through both the planning and execution elements of an acquisition integration program. The following is an example of how we helped a client through their acquisition.
Background
The client is one of Asia’s largest petrochemical manufacturers, producers and exporters. It manufactures ethylene oxide (which is converted into ethylene glycols and high purity ethylene oxide), ethoxylates, styrene monomer, propylene oxide and polyols.
By taking full ownership of a relatively small but strategically important chemical joint venture, the client has unlocked options to integrate, optimize and expand its manufacturing operation. This recent acquisition will help to strengthen the overall competitiveness of derivatives’ production and provide opportunities for combined growth strategies in high purity ethylene oxide, mono-ethylene glycol and alcohol ethoxylates.
The Challenge
A major challenge, according to the client’s General Manager was “the integration of one of its recent acquisition’s assets and facilities with its existing units, utilities and organization”. Renoir Consulting was invited to help facilitate the integration of this acquisition into the wider family of the client, focusing on organization design & operational-related integration.
What We Did
With the objective of this project to integrate into the client’s existing systems and processes, Renoir had to ensure that surrounding plant production and safety performance or customer service, logistics, and supply chain operations, were not affected in the process.Â
The protocol was to implement a “One System, One Solution” philosophy across multiple client production sites. Renoir’s support of the integration process was applied mostly in the following areas:
Project Governance
- Development of a detailed integration plan to include key milestones, detailed activities, resource requirements and risk identification.
- Program management, support and reporting. The introduction of precise, timely reporting on the status of integration activities at all levels based on project governance structure.
- Interface management between the individual work streams, including integrated plan reviews, interdependency identification and rectification, and inter-departmental review meetings.
Workforce productivity peaks with clarified role definitions
Oil & gas company improves efficiencies for $8m annual savings
Workforce productivity peaks with clarified role definitions
Oil & gas company improves efficiencies for $8m annual savings
Clarify processes, roles and KPIs with Renoir’s methodology
Implementation Support
- Change management and implementation support in each individual work stream. Provide the expertise and guidance required prior to implementation of any change.
- Knowledge transfer and retention, including critical information identification in conjunction with the work stream Leader and Implementation Manager.
- Monitoring and supporting acquisition integration activities through regular assessments and KPI tracking.
- Communication program setup and execution.
Implementation was executed according to three pillars – Project Management, Change Management and Operational Integration.
Project Management
Renoir’s tactical approach was to align the operational and organizational aspects of integration between work streams. This ensured that business and IT integration elements progressed together with approved critical path project milestones. Risks were assessed and highlighted regularly to ensure mitigation plans had been developed, thus minimizing risks.
Project progress reporting tools were developed for the client to track progress on both their individual work streams as well as for overall project progress.
Change Management
The Renoir team focused on three main changes – organization change, process change and behavior change, during the course of the integration. Each of these processes was crucial to establish a basis for the organization to adapt to, and finally accept, changes implemented.
The main work scope regarding this pillar was to facilitate procedural changes and ensure resources required had been planned prior to the implementation. A communication program was also developed and executed to share the project’s progress over time and ease the discomfort of the staff affected during integration.
Operational Integration
The implemented tools and adjusted behavioral requirements allowed the client’s senior leadership team members and other key management staff to progress smoothly. They were now able to identify gaps in systems and processes, both managerial and technical, to determine training requirements in every department and at every level of the organization.
Additionally, an audit program ensured that the aligned systems were fully integrated and effective across the whole organization.
The Results
Renoir’s approach allowed for early identification of problems and risks to the integration process, ensuring a focused problem resolution process. Renoir acted as a catalyst across the client’s organization to facilitate the new ways of working, systems and processes needed to support all levels of the management team. This ensured a level of synergy and benefits were realized from the integration project.
Renoir’s experience with behavior change implementation programs used in conjunction with a variety of proven project management tools, some developed specifically for this project, have helped to ensure a successful integration project in aspects such as safety, performance and financial terms.
Manage acquisition integration for streamlined operations.
