David Hane shares a story of his dad’s position and how it relates to operating models for mergers and acquisitions.
My dad worked as a tank mechanic in the U.S. Army Ordnance Corps in the period between the Korean and Vietnam wars. Growing up, our garage was at times a cross between a depot, repair shop and arsenal (the latter owing to my teenage love of pyrotechnics). Dad wasn’t the most talkative father, so what my brother and I learned from him was usually from watching him work and imitating what he did. Though it took a long time, I eventually came to appreciate his understanding of how things worked, and what it took to keep them running. In today’s parlance, the tank maintenance Dad did would be part of what’s called an MRO operation. MRO stands for maintenance, repair and overhaul.
MRO is a critical aspect of military operations, ensuring that equipment is always in optimal condition for deployment. MRO was challenging in the 1950’s, and is even more so today. Current challenges include complex systems, difficult operating environments, logistics and supply chain issues, personnel training and cost. Businesses also face many or all of the same challenges. For the purposes of this article, I’m going to focus on the complex systems challenges specifically as they relate to mergers and acquisitions (M&A), and one tool that can be used to mitigate integration or separation risk – the operating model.
A Blueprint for Action
An operating model defines where and how critical work is performed within a company, acting as a blueprint for daily operations. It includes detailed information about organizational structure, technology systems, governance mechanisms, and performance metrics. This model bridges the gap between high-level strategy and detailed organizational design, ensuring the two are aligned, and (hopefully) optimizes corporate performance. Every company has an operating model. The only question is the extent to which it is understood, and more importantly in M&A, documented.
Key points include:
- Assessment of infrastructure
- Systems complexities
- Systems support
Read the full article, From Tanks to Banks: Navigating M&A with an Operating Model Compass, on LinkedIn.