100 DAY PLAN

WHAT ARE YOU GOING TO DO POST-ACQUISITION?

When the hard work begins

Planning for the management and development of the business post-completion. After the MBO it is essential to hit the ground running. There is usually considerable goodwill from staff, suppliers and customers immediately after the deal is announced and it is important to leverage this.

• The deal must be “sold” to important customers and suppliers – it is not difficult to deliver a very positive message about such deals.
• Staff must also be informed in a thoughtful and positive manner; the introduction of incentive schemes for key staff can help here.

After the MBO it is essential to hit the ground running.

The MBO team may also wish to consider the appointment of one or two experienced non executive directors to the board to help monitor and develop the business.

Planning to drive growth

The plan’s purpose is twofold: To give direction to the implementation team, and to build consistency and stability between the acquirer and the existing management.
Achievement of both objectives is critical to the success of achieving both the short- and the long-term goals of the company. The overall goal is to drive growth.
The process of designing a plan should help the acquiring company's management and new company owners agree on areas where they can improve and specific ways they can do so. Ultimately, the key to success when implementing the 100-day plan is staying on track. Having the right people in the right places is crucial; holding them accountable is even more important. People sometimes underestimate this because they assume if a person is competent, he or she can deliver on a task. That’s a bad assumption. People need to be in the right roles to succeed.

Implementing the plan

Implementation of the 100-day plan does not always go exactly according to plan. In fact, it rarely does. Acquisition team and company management need to be deft in reacting appropriately when necessary to keep the company from falling off the tracks. Undoubtedly, the acquirer's are sometimes called upon to make hard decisions.
There is a need to be careful when reviewing and implementing new processes and systems “People tend to push back when they are required to do things differently or learn new skills against their will. Management teams are no exception.

The key is to remember throughout implementation that even when things aren’t going exactly as planned, IT’S IMPORTANT TO CONTINUE TO PUSH FORWARD.

Incentives
To keep management on track, it’s not unusual to offer financial incentives. In companies where they’re in place, if members of the management team achieve 100-day plan goals, most frequent rewards are a one-time bonus. It’s important to note that often, but not always, incentives are tied to the successful execution of the 100-day plan.
Creating value
Having different ways of creating value at the acquisition, sometimes implementing an outsourcing strategy is part of the 100-day plan. Services such as IT management and support, freight management, compliance, production and accounts receivable are functions that firms explore in terms of outsourcing. It really depends on the company. In some cases, outsourcing makes sense, and for others it does not, but either way, it’s important for firms to look at their options and then make a decision. In fact, it makes sense to look at what aspects of a company can be outsourced if it helps the company focus on the core business, for example, a service such as freight management can be outsourced because it is often not the core competency of the company.
A deep dive into the financial reporting systems can help drive improvements. Daily, weekly and monthly operating metrics, as well as month-end closing timelines and forecasting capabilities, are crucial, and they need to be set up during the 100-day plan. Without accurate financials and metrics for forecasting, it’s almost impossible for a company to put a plan in place and execute successfully. So the month-to-month accuracy of financial reports is particularly important.
The last piece of the equation in creating value is the depth and strength of the management team. You cannot underestimate this factor. In most acquisitions, the firm puts together a 100-day plan of what the firm is going to do. Every line item has an individual’s name next to it. Every week the acquirer should check in to see how people are progressing and hold each one accountable for his or her end of the bargain. The acquirer is responsible for driving returns, and those with the most checks and balances in place will find the job easier and requiring less negotiation.

After the first 100 days, next steps vary by company. But for all companies, it’s important to keep the focus on growth and moving the business forward. It’s equally important to stay on the same page with management as new plans are laid out.