Mergers and acquisitions (M&A) present organisations and their staff with a very broad array of challenges which need to be dealt with in a relatively short period of time. In the run-up to an M&A, a small team is normally focussed on setting up the deal in a relatively confidential environment. They rarely have the time or opportunity to thoroughly plan the aftermath of the deal. Once the deal is agreed, the organisation often faces a huge change management challenge as many aspects of the business need to be modified simultaneously.
One of the implications of most M&As is that the legal structure of the business needs to be changed, which in turn has an impact on both the local product registrations and the product labelling. Specifically, product registration and label changes need to be made because of:
In parallel, there is the inevitable pressure from the commercial organisations to harmonise corporate branding.
Most regulators have strict local guidelines to follow for such changes, including:
Little harmonisation of these rules exists and failure to comply will risk supply continuity.
In this high-risk and high-stress environment, it is important that a robust plan is developed and executed which minimises the supply risk and any associated internal costs. This activity is made more challenging because it needs to coordinate activity from across and outside the organisation to be successful.
Successful execution of the required change relies on coordinating many cross-functional and geographically disparate activities. It is further complicated because to be successful it requires the involvement and cooperation of external regulators, commercial and supply chain partners in order to be to be successful.
The high business risk, combined with the repetitive nature of much of this activity, means that establishing an appropriate level of central governance, knowledge sharing, monitoring and corrective-action management is necessary to achieve an optimal result. The degree of central management needs to be balanced with the need to ensure that local groups are empowered to carry out the actions they are clearly accountable for.
Be4ward has developed a stepwise approach which has delivered successful results. It breaks the problem down into its component parts, to design the optimal overall solution before initiating a programme of implementation projects.
Do not start integrating until you have a plan. In any country you have the control over when you start integrating, but once started you must comply with the prescribed timelines. Careful design of the programme of activity is the only sensible place to start, together with establishment of an effective and efficient governance model.
Effective, timely, cross-functional (and organisational if appropriate) governance, sponsored from the top of the new organisation, is critical in achieving several objectives:
The nature of this sort of activity is such that it involves many parts of the organisation, in almost all locations, in a complex web of interrelated activities. Our experience suggests that it is very difficult, if not impossible, to establish simple boundaries around groups and let them design and execute their own change. Furthermore, due to the repetitive nature of many of the tasks involved, this would be sub-optimal and introduce unnecessary risk. A designed and managed programme of activity needs to be established.
This is not to say that the centre must control every detail and that the rest of the organisation simply executes the plan. Far from it, we recommend that the central design of the programme should drive detailed decision-making at the right level in the organisation. What is important in this process is to understand the key interactions between decision-making and activity.
It is almost inevitable that some form of central multi-functional programme management and coordination group needs to be established. This group should be charged with the following:
The end result is well worth the apparent additional overhead and cost. You do not want to risk your supply continuity by managing through chaos.
Our team’s experience in this area has given us some key learning points: