Ensuring Success in Post-Close Integration

©COPYRIGHT 2011. ANDREW J. SHERMAN. ALL RIGHTS RESERVED 1

Firmex Webinar SeriesM&A Master Class

December 8th, 2011

1:00 p.m. to 2:00 p.m.

Andrew J. Sherman, Esq.Jones Day51 Louisiana Avenue, N.W.Washington, D.C. [email protected]

Rubber Hits the Road Ensuring Success in Post-Closing Integration and Harvesting Intellectual Assets

@Firmex, #FirmexMC


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Joel LessemCEOFirmex


Andrew J. ShermanMr. Sherman is a partner in the Washington, D.C. office of Jones Day with over 2,500 lawyers worldwide.

He is the author of 23 books on business growth, capital formation and the leveraging of intellectual property. His eighteenth (18th) book, Road Rules Be the Truck. Not the Squirrel. (http://www.bethetruck.com) is an inspirational book which was published in the Fall of 2008. He has appeared as a guest and a commentator on all of the major television networks as well as CNBC’s “Power Lunch,” CNN’s “Day Watch,” CNNfn’s “For Entrepreneurs Only,” USA Network’s “First Business,” and Bloomberg’s “Small Business Weekly.” He has appeared on numerous regional and local television broadcasts as well as national and local radio interviews for National Public Radio (NPR), Business News Network (BNN), Bloomberg Radio, AP Radio Network, Voice of America, Talk America Radio Network and the USA Radio Network, as a resource on capital formation, entrepreneurship and technology development.

He has served as a top-rated Adjunct Professor in the Masters of Business Administration (MBA) programs at the University of Maryland for 23 years and at Georgetown University for 15 years where he teaches courses on business growth strategy.

He has served as General Counsel to the Young Entrepreneurs’ Organization (YEO) since 1987. In 2003, Fortune magazine named him one of the Top Ten Minds in Entrepreneurship and in February of 2006, Inc. magazine named him one of the all-time champions and supporters of entrepreneurship.


M&A Integration Strategiesand Best Practices


The Integration Challenge

Cultural challengesDifferences in working styles, leadership approachNational culture differencesBehavioral differences

People IssuesKey members of management team leavingEmployee moral and motivationRetention of key staffConsultation with staff and representative bodies

“Cultural & people issues present the biggest specific challengesduring the post deal period…”

Complex integrationof two businesses

Dealing with differentOrganization cultures

People issues

IT

Customer retention

Time andmanagement

32%

30%

27%

24%

10%

4%

Proportion of respondents

Top Post-deal ChallengesOnly 20% of respondents were wellprepared to deal with cultures differences

…yet two thirds of companies had not placed a great deal of emphasis onaddressing people and cultural issues in planning for the post deal period

Source: KPMG Global M&A survey

©COPYRIGHT 2011. ANDREW J. SHERMAN. ALL RIGHTS RESERVED 6#FirmexMC

Acquisition Integration: Surviving the “Day After”Options for Integrating Acquired Business

Minimal – only selected corporate functions are merged (e.g. HR/benefits), primarily to achieve staffing synergies or cost efficiencies; acquired business remains decentralized with autonomy for decision making and agreed-upon reporting requirements to the “mother ship”Moderate – certain key functions are consolidated (e.g. marketing & sales, capital planning, procurement); strategic planning and monitoring is centralized while most day-to-day operations remain autonomousFull – all processes, people and systems are consolidated and management decisions are centralized into parent company


Acquisition Integration: Surviving the “Day After”Integration: Whats the Big Deal?

• A poorly executed integration plan can create or destroy shareholder value; the results are felt long after the deal closes

• Integration is a difficult, complex and sensitive process; it is not just an ad hoc “to-do” list

• There is no rigid or “one size fits all” framework for integration

• A typical integration process has many owners and constituents


Acquisition Integration: Surviving the “Day After”Top Reasons Cited for Integration Failure

• People issues – e.g. losing talent; organizational exhaustion

• Cultural incompatibility• Poor communication across all organizational levels• Lack of leadership and change management• Resource Constraints; concurrent pressures• Poor planning / slow execution of integration tasks• Pre-deal horse trading – not fulfilling early promises after

deal closes

“Integrating two organizations is like trying to builda rocket while its blasting off.”

-- Anonymous


Acquisition Integration: Surviving the “Day After”Tactics for Retaining Key Players

• Provide financial incentive for successful (and timely) completion of integration action items

• Reinforce a positive vision of their role in future of merged company; answer the “me” questions in the merger

• Involve in integration task force activities• Communicate regular updates; explain “why” decisions

are made; provide a forum for venting questions/concerns

• Provide timely positive feedback and recognition when something is well done

• Follow up words with actions and be persistent• Involve others to help “recruit” as needed


Acquisition Integration: Surviving the “Day After”Tactics for Determining the “Best Process”

The “Process Maturity Model” – road map for process improvement• Provides a context for evaluating specific processes with a goal of determining (or

redesigning) the best process that delivers higher performance over time

• Built around five key “anchor points” which provide a common approach and common language among employees

Process Maturity Model“Anchor Points”

Design – understanding of how the process is to be executed Ownership – appointment of a key manager or group with responsibility for

process implementation and execution Performances – abilities of the people who operate the process activities Infrastructure – effectiveness of the information and management systems that

support the process activities Metrics – quality of measures used to track process performance

Note: Adapted from the ”Process & Enterprise Maturity Framework,” created by Michael HammerSee “The Process Audit” published in the Harvard Business Review, April 2007


Acquisition Integration: Surviving the “Day After”Common Tactics for Integration Survival

• Concentrate on real value drivers –anticipate issues; plan appropriate responses

• Maintain continuity across deal phases –from structuring to due diligence to implementation of integration plans

• Coordinate resources/timing and assign responsibility –a lack of speed or accountability may kill potential benefits

• Manage change proactively –take action to remove uncertainty while bridging any “cultural” gaps

• Communicate with internal and external constituents –provide information early, often and carefully to build support and acceptance


Acquisition Integration: Surviving the “Day After”Concentrate on Real Value Drivers

Value Realization: Synergy action plans

• Identify and prioritize synergy opportunities (and related challenges) during due diligence and adjust throughout the transaction lifecycle – remember the “20/80 rule”

• Each synergy challenge should have an unique action plan with responsibilities assigned

• Synergy action plans should consider one-time transition/integration costs or capital outlays (as well as timing of cash flows) and be linked to financial forecasts



Desired Outcome Typical Results

• Rapidly capture cost & revenue synergies• Streamline organization and critical business processes• Minimize disruption to employees and customers• Execute an issue-free Day One• Maintain focus on current

business• Quantify progress and results

• Synergies not achieved in 70% of cases• 45% of executives leave by

year 3• Customers frustrated by

change• Employee uncertainty translates into disengagement• First 4-8 months productivity reduced by 50%

Source: Deloitte Consulting LLP M&A Survey 2008



14

…..Without Negatively Impacting….

Customers Employees Vendors/Suppliers Financial Performance…

…..While Integrating….Customers Management/Employees Suppliers/Systems….

How Do You Capture Synergies….Personnel Reductions Facilities Consolidation Sourcing/Purchasing….

…All while relying on the same leaders/employees who are attempting to do their “day job” and maintain current business momentum


Integration Management Office (IMO)Integration Playbook: Typical Elements

15

Planning

PURPOSE

SCOPE

Playbook Scope

Relationship between Playbook Elements

INTEGRATION MANAGEMENT PLAN

Organization

Governance

INTEGRATION PLANNING PROCESSES

Integration Phases Overview

Pre-Close Processes and Tools

Integration Planning Discovery Phase

Human Resources Data Requirements

Accounting Data Requirements

Initial Integration Plan

ExecutionEXECUTION AND MONITORING PROCESSES

Functional Integration Planning with Acquired Company Resources

Project Portfolio Management Processes

INTEGRATION PROJECT CLOSING

End State Tracking Process

Lessons Learned Process

COMMUNICATION MANAGEMENT PLAN (CMP)

Communication Schedule

Communication Management Execution Processes

Reusable Integration Message Products

SYNERGY MANAGEMENT PLAN (SMP)

Synergy Initiative Planning

Synergy Initiative Process Management

CULTURE/TALENT ASSESSMENT PLAN (CTAP)

Culture Assessment Tools

Culture Analysis/Recommendations

Talent Assessment Tools

Retention/Separation Planning


Post-Closing Challenges


Post-Closing Challenges• The closing of a merger or acquisition usually brings a great sigh of

relief to the buyer, seller, and their respective advisors. Everyone has worked hard to ensure that the process went smoothly and that all parties are happy with the end result. But the term closing can be misleading in that it suggests a sense of finality, when in truth, particularly for the buyer and the integration team, the hard work has just begun.

• Often one of the greatest challenges for the buyer is the post-closing integration of the two companies. The integration of human resources, the corporate cultures, the operating and management information systems, the accounting methods and financial practices, and related matters are often the most difficult part of completing a merger or acquisition.

• It is a time of fear, stress and frustration for most of the employees who were not on the deal team and may only have limited amounts of information regarding their roles in the post-closing organization.


Post-Closing Challenges (Cont’d)• The seller must facilitate a smooth transition of ownership

and management to the buyer's team without ego, emotion, or politics. The buyer must have procedures in place to prevent the seller undermining these transitional efforts and assume control of the company--also without ego, emotion, or politics.

• Post-closing challenges may arise in a wide variety of subject areas, e.g., operations, finance, personnel, and information systems and many other areas as set forth in the post-closing check list set forth below. In order to achieve desired synergies from a deal, an effective and rigorous synergy management with a constant eye on milestones is required.


Strategic Post-closing Issues

• Who should lead the transition team?• Which changes should be made and how quickly?• How will the changes be presented and sold?• How can the seller’s transition from owner to employee

status be managed?• How can “turfmanship” be avoided?


Common Post-Closing Problems

• Lack of Communication

• Weak Leadership

• Mistakes Made In Due Diligence Process

• Realization of Efficiencies and Synergies Took Too Long (or Were Obsolete or Stale By The Time They Were Achieved)

• Unexpected Rapid Shift in Post-Closing Market or Economic Conditions

• Unexpected Post-Closing Third Party Claims on Liabilities

• Cultural Differences Greater Than Predicted

• Market Share or Valuation Failed To Be Accretive

• Indecisiveness

• Inexperience Among Executives or Advisors

• Post-Closing Synergies Over-Estimated or Unrealistic

• Stakeholder Resistance Under-estimated

• Customer and Channel Partner Loyalty Over-Estimated

• Technology Integration or Infrastructure Costs Well Above Budget


Communication is Hyper Critical• The primary tool for dealing with fear, and many of the other emotions

that surface during the course of acquisition transition, is communication. If a merger is thought of as the beginning of a marriage, think of the amount of communication that is necessary in the first few weeks and months of such a relationship. As with any relationship, a lack of communication typically means a lack of success.

• In a merger, the two keys to effective communication are to determine (1) the importance of the information and (2) who should communicate it. Information should be communicated in the order of its importance. This means that you want to first communicate that information that affects people directly, including changes in the organization, especially who is staying and who is leaving:

• Reporting structures

• Job descriptions and responsibilities

• Title, compensation, and benefits

• Job location and operating procedures


Post-Closing Focus Area Check List

Human Capital Issues• Cultural Alignment• Integration of Leadership Team• Integration of Staff• Termination Plan Due To Efficiencies and Overlap• Overseas Workers• Union Issues• Regulatory Issues• Temporary Workers and Part-time Employees• Independent Contractors


Post-Closing Focus Area Check List (Cont’d)

Relationship Capital Issues• Integration of Customer Relationships• Integration of Supplier Relationships• Integration of Channel Partners• Integration of Advisory Teams and Consultants• Integration of Strategic Alliance and Joint Venture Partners• Subcontractors and Teaming Relationships

Infrastructure• Physical facilities• Warehousing and Logistics• Information Management and Computer Systems


Post-Closing Focus Area Check List (Cont’d)Regulatory and Contractual Controls

• Regulatory Approvals• Post-closing assignments and consents

Branding and Marketing• Branding issues• Communications issues• Public relations strategy• Redefining the customer value proposition

Operational Issues• Store/office trade dress and alignment• Community relations• Amendments to Real Estate and Operating Leases


Key Post-Closing M&A Employee Issues• What’s going to happen to me?

• What’s expected of me?• What’s in it for me? • Be sure that post-closing planning and communication addresses

these three fundamental human concerns. Take control of the rumor mill before it takes control of you and your transaction. Most rumor mills begin as a result of an information gap.

• It is the responsibility of senior management to fill this void with clear and consistent information at all levels, even if some of the data shared is bad news.

• Leaving the door open to water cooler-driven information channels will often lead to the best and the brightest people heading for the exits, when it is often those exact folks that need to be directly motivated, incentivized and retained.


Dealing With Post-Closing M&A Customer Issues

• When a buyer acquires a business, one of the most valuable assets is the customer base.

• One of the post-closing challenges is to determine the profitability of the customers.

• Often the acquired company has legacy customers that they have been unwilling or unable to terminate if the customer is unprofitable or difficult to manage.


Dealing With Post-Closing M&A Customer Issues (Cont’d)• The acquirer should review all customers for profitability

and sustainability. • It makes little sense to keep a customer if it is not possible

to make a profit on the relationship, unless the customer enables the merged company to penetrate a new market or if the customer helps achieve scale economies, thereby enabling other customers to be profitable. However, even in these cases, there is a limit to the amount of losses that make financial sense.

• In addition, the customer may be a direct competitor of the buyer or of one of the buyer's customers. As a result, it is important to evaluate the seller's customer base.


Dealing With Post-Closing M&A Customer Issues (Cont’d)Perhaps more important, however, is for the seller to transfer the goodwill of its customers to the buyer. A disgruntled employee can very quickly destroy this goodwill and perhaps jeopardize a significant income stream on which the value of the acquisition was based.

The key steps to transferring this goodwill are:• Personal introductions to customer contacts• Social events to acquaint customers with the new

owners• Letters from both the seller and buyer that thank

customers for their business and announce the new management and plans for the merged entity


Post-Closing M&A Issues:Physical Facilities• Often one of the larger expenses on the income

statement, rent and/or lease payments are a natural place for a buyer to focus when evaluating the efficiencies to be gained by a merger.

• When examining the space requirements of the combined entity, it is certainly helpful to consider the square footage.

• The space should be evaluated to determine if the rent is more or less expensive than other company space and if the amount of space is more than is needed. This will go a long way toward helping to cut expenses in order to reach the target return.


Post-Closing M&A Issues:Physical FacilitiesHowever, there must also be human considerations:

• How long have the employees been in this space? • How does the commute compare to where they might be

relocated? • How much interaction is required between the staff being

relocated and staff in a different location? • How much reconfiguration of the office and facilities of

each company will be required to accommodate additional staff or functions?

• How much productivity can be expected from these people during the course of the move?


Post-Closing IntegrationBest Practices Overview


Post-Merger Integration Key Challenges & Best PracticesHere are some key lessons learned for developing an effective post-closing integration plan:

1. Pick your poison. Many deals fail because a strategy for integrating (or not) the 2 cultures was never clearly defined.

• Will the seller’s culture become dominant? • Will the buyer’s culture be absorbed by the seller’s team and

employees? • Or will, if feasible, the cultures allowed to “peacefully co-

exist?”• Or will it be a hybrid driven by compromise and merit (e.g.

they do that better, but we do this better, so let’s find ways to truly combine the best of the best in each area)

• Buyers should not lose sight of the value of the culture that they are buying, just because their ego or ignorance assumes that their culture must be dominant on a post-closing basis


Post-Merger Integration Key Challenges & Best Practices (Cont’d)2. Align cultural decisions with overall M&A goals and

growth strategy. • Employees want to see a fit between the post-

closing integration decisions made and the overall strategy which is driving the transaction.

• If the CEO of BuyerCo talks about the need to cut costs, but then nobody is fired, then employees are relieved (for now) but confused.

• If the BuyerCo CEO talks about the need for geographic expansion, but then closes offices and plants, the decisions do not appear aligned with the strategy which has been articulated.


Post-Merger Integration Key Challenges & Best Practices (Cont’d)

3. Compatibility does not always mean an exact match. • Post-closing executives and consultants will often “force

feed” a quest for “sameness” that is unnecessary. • Cultures can be compatible and functional even if they are

not an exact mirror image of each other. • For example, both could be driven by merit-driven

performance and rewards, even if the rewards are not exactly the same.

• Both could be driven by customer service excellence, even if that manifests itself in very different ways, especially if the two companies are in different types of businesses.



4. Communicate early and communicate often.

• The more that can be done to reduce or eliminate the stress and fear of the typical employee, the better.

• If the leadership is perceived as playing their cards too close to the vest or being fearful of making the hard decisions, both cultures will erode quickly, having a significant adverse effect on the value of the entity on a post-closing basis.



5. Reach for the stars, but be realistic about post-closing objectives.

• The excitement and optimism expressed during the transaction is wonderful and is energy which should be contagious but post-merger goals should be realistic and attainable.

• Goals that are neither believable nor achievable will only disappoint the investors, the employees, vendors and customers and reflect poorly on the management team of the recently-integrated company.

• I am sure that every CEO of BuyerCo believes in her “heart of hearts” that getting this deal done will increase the value of the company by tenfold or even twentyfold down the road …. but is that realistic in the near-term?

• And if no, is it realistic to have employees believe that a tenfold increase in value in the near-term is the actual goal, only to be disappointed when it is nowhere even close.



6. Meaningful systems need to be in place to set, measure and adjust the goals of the transaction.

• A clear set of 12/24/36 month “goals and objectives” to be achieved as a result of this transaction should be articulated as part of the post-integration plans.

• Yes, some portion of the results will be intangible and difficult to measure (e.g. our customers just “feel better” about us now), but even goodwill should manifest itself in higher customer loyalty and increases in sales that can be easily measured.

• Repeat sales, upsales, renewals to commitments, lower turnover rates can all be measured and closely monitored.



7. Treat both sets of customers as gold. At the end of the day, you can write-up all of the press

releases in the world, but if customers are not convinced that this M&A deal is good for them, then the objectives of the deal will not be met.

Take the time to explain the post-closing value proposition to both sets of customers.

If the deal will result in lower costs or better pricing, then tell them and show them how and why.

If the deal will result in higher prices but better service and support, then be ready to justify and explain the value of the trade-off.

If the deal will result in broader and better product lines or service offerings, then have your cross-selling strategies and tools ready to go.

Remember that your competitors will try to attack the deal and market to your customers if they see the opportunity; you need to be ready to push back.



8. Don’t hide the poop under the rug.

• In an attempt to paint a rosy post-closing picture, buyers and sellers may choose to defer problems and challenges identified pre-closing to some undefined time period after closing.

• This “we’ll get to it later” approach is a time bomb just waiting to explode and the clean-up will not be pretty.

• The failure to either unearth lurking problems, or worse, the intentional decision to ignore them, is a recipe for disaster.

• Problems in the area of human resources, environmental liabilities, lack of clear ownership in intellectual property, poorly-drafted earn-outs, unpaid taxes, unclear major customer commitments, underfunded pension plans, etc. are not problems that will go away with the waiving of a post-closing magic wand.

• The parties may feel pressure from the marketplace or from their advisors or from their sources of capital to “just go ahead and get this deal closed and we’ll figure out these problems later,” which is bad advice and a bad strategy.

• The delays in closing that solving these problems would create are viewed as the evil, instead of the problems themselves.

• Yes, momentum is important and there may be minor problems which are not worth the derailing of a transaction, but material issues and challenges must be resolved prior to closing.



9. Do your due diligence the right way the first time.

• Improper or hasty due diligence often results in post-merger integration plans going awry.

• Key issues that should have been discovered and dealt with pre-closing wind up to be a source of tension and dispute post-closing because due diligence was piecemeal or improperly staffed.

• Due diligence staffing means the right number of people with the right skill sets who are prepared to invest the time and effort to ask the right questions and challenge the answers that don’t make sense.

• Subject matter experts should be brought in when necessary, especially for high-tech or biotech/life science transactions.

• For example, if you are buying a government contractor and one of the key assets is a long-term supply contract with the Department of Defense for providing advanced technology and support, then those contracts had better be reviewed by someone more senior and more knowledgeable than a 2nd year general corporate practice associate of your local law firm.


Harvesting Intellectual Assets


Key Strategic Questions

New book out in Fall of 2011

We can learn many lessons about business growth and intellectual capital

development from the best practices of our agricultural ancestors.

We are all farmers. We mark our turf. We protect our property. We plant our seeds.

We nurture the soil. We plow our land. We combat adverse weather and

ecosystem conditions and overcome adversities. We prepare for our harvest.

We hope for the best and prepare for the worst as the market sets a price for our efforts. We embrace the notion that our

results will be directly tied to our levels of effort and expertise.

“We reap what we sow.”

We begin anew with each new season.


Key Strategic Questions (Cont’d)

Who will be on your team to assist you in these efforts?

Who will you hire to help you raise, harvest and sell the produce at your farm?

What tools, resources and expertise will you require to maximize the fruits of your

harvest?

What adverse weather or market conditions must you overcome to be successful?

Who else is growing these same crops and how does their experience compare to

your own?

Do you have a keen sense for the cycles and timetables that will optimize your

harvest?

What is your game plan for bringing your crops to the marketplace? Will you do it

alone or join with others?


The Evolution of a Revolution

• The picks and shovels of yesteryear have been replaced by the laptops and smart phones of today

• Yet we must be committed to toiling in the fields for long hours to harvest productive and profit-driven assets (even if the venue and the crops have changed)

AgriculturalRevolution

(Food)

DigitalRevolution

(Intellectual Capital)

PlantCultivateHarvest


Every Farmer Needs A Game Plan

Put an intellectual capital development and harvesting plan

in place

Develop organizational charts and accountability for innovation (Chief

Innovation Officer)

Alignment of seeds to be planted and demands of targeted market

Adjusting the plan in real-time around weather conditions and

competitive trends


Planting Seeds

• What seeds will you plant today?

• What crops is your land most capable of growing?

• Have you assessed demand and competitive trends?

• What adverse conditions will you face?

• Establishing a genuine culture of innovation


Irrigating the Field

• Gathering the water, the nutrients and the fertilizer to make sure that intellectual capital can be harvested (human capital, financial capital, etc.)

• Predicting the unpredictable (Mother Nature)

• Too much vs. too little water(drought vs. floods)

• Fire hose vs. garden hose (SME leaders spend too much time and precious resources on putting out fires instead of irrigating new ideas)


Nurturing The Soil

• Finding the right mix of nutrients

• Know the needs of the soil

• Building the right team for nurturing and evaluating new ideas: which are ripe for picking and which need more time?

• Google’s 70/20/10 Rule – what’s yours???


Monitoring Progress Carefully To Ensure A Timely Harvest

Building effective IAM systems

Accountability and internal controls

R&D spending: Know when to say when

Innovation metrics


A Bountiful Harvest

Systems and processes in place to ensure innovation, not

just invention

Understanding the different types of innovation harvesting

strategies

Proper rewards and incentives to encourage innovation and effective intellectual capital

harvesting


Bringing Crops To The Marketplace

Developing efficient distribution channels (don’t try to do it all

alone)

Timing and balance issues: how and when to bring crops to market (The 8 track tape store

and the flying car)

Impact of Web 2.0 and the developing E-marketplace

Wisdom of Crowds/Custom Merchandise in Real Time


Evolving Strategic Views Towards Intellectual Capital (IC) AssetsTraditional View Enhance the company’s competitive advantage and strengthen its ability

to defend its competitive position in the marketplace (IC as a barrier to entry and as a shield to protect market share) (reactive and passive approach)

CurrentView

Should not be used merely for defensive purposes but should also be viewed as an important asset and profit center which is capable of being monetized and generating value through licensing fees and other channels and strategies, provided that time and resources are devoted to uncovering these opportunities (especially dormant IC assets which do not currently serve at the heart of the company's current core competencies or focus) (proactive/systemic approach)

FutureView

Premiere drivers of business strategy within the company and encompass human capital, structural/organizational capital and customer/relationship capital. IAM systems need to be built and continuously improved to ensure that IC assets are used to protect and defend the company's strategic position in domestic and global markets and to create new markets, distribution channels and revenue streams in a capital efficient manner to maximize shareholder value (core focus/strategic approach)


Intellectual Asset Management (IAM)(The IP Discovery, Management and Mining Process)

• IAM is a commitment to building systems to create, organize, prioritize and extract value from a set of intellectual property assets. The intellectual capital and technical know-how of a company are among its most valuable assets, provide its greatest competitive advantages and are the principal drivers of shareholder value

• (Professor Lev – NYU, estimates that only 15% of a company’s “true intrinsic value” is reflected on its financial statements), yet rarely do smaller and growth companies have adequate personnel, resources and systems in place to properly manage and leverage these assets (“Finding and Harvesting The Rembrandts in The Attic”).

Discussion Point:

What other major body part are we estimated to only use 15% of its true capacity? Is there a correlation? When are our value-drivers “blindspots”?

©COPYRIGHT 2011. ANDREW J. SHERMAN. ALL RIGHTS RESERVED 55#FirmexMC55

Intellectual Asset Management (IAM) (Cont’d)

• IAM systems facilitate collaboration and help break down silos in communications regarding new product development, the harvesting of intellectual assets and provides training to employees at all levels on the importance of the protection and leveraging of intellectual property.


Harvesting Process

Collaboration & Communication

Strategic Screens & Filters

Intellectual Asset Brainstorming,

Retreats, Facilitating, Creativity, etc.

Product/Service Development Plan

IP Protection Strategy

Harvesting

• Software & Systems • Periodic Meetings & Retreats• IP Audit (take inventory as to

what already exists)

Chief Innovation and Intellectual Asset Harvesting Officer

(“CIIAHO”)

• Accountability & Resources for Identifying, Harvesting, & Leveraging Rewards

• Market Screens• Customer Demand Screens• Resources Screens

• Human (Who?) • Financial (How?)

• Resource Allocation Screens• Profitability/Prioritization• Shareholder Value

• Patent• Trademark• Copyright• Trade

Secret• Other

• Organic• External


Questions & Answers


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Ensuring Success in Post-Close Integration

Economy & Finance

Transcript of Ensuring Success in Post-Close Integration