Should you hire your integration lead internally or externally?
Adapted from PMI Mastery: Ensuring Deal Value
Branka Dessens and Richard Parry
For most non-serial acquirers, an external integration lead is not an unusual addition to the team. Internal teams, on the other hand, often have a conflict of interest, because by definition they represent the buying company.
The trade-offs
| Trade-off | Internal integration lead | External integration lead |
|---|---|---|
| Advantages | Familiar with the company culture | Unbiased outsider perspective |
| Known management style and strengths | Specialised M&A expertise | |
| Long-term commitment | Flexible engagement (typically 6 to 9 months) and a scalable team | |
| Singular focus; a trusted C-suite advisor | ||
| Disadvantages | Potential bias from existing relationships | Ramp-up time to learn the company |
| Limited external experience | Higher hourly cost, for higher value | |
| Resources stretched, focus diluted | ||
| More subject to internal politics |
Which fits your deal
An internal lead suits a strong, experienced leader already in the business; straightforward or less complex integrations; and buy-and-build strategies that need permanent, dedicated leadership.
An external lead suits complex or high-stakes integrations; turning around a failed integration; a need for specialist expertise and neutrality; stretched internal resources; aggressive buy-and-build; and infrequent or one-off acquisitions.
The CEO is ultimately responsible for overseeing and harmonizing all stakeholder interests. Their main focus naturally centers on running the business effectively. That's why engaging an external PMI lead often proves beneficial: they serve as an impartial facilitator, helping to bridge gaps and align priorities. It's somewhat like marriage counseling, where an outside perspective helps both sides communicate better and find common ground.
Often, it is both, in sequence
There are two groups of acquirers. Companies with an aggressive buy-and-build strategy often start with an external PMI manager, but then will hire someone internally. As external, we usually guide them in setting up the methodology and the playbook once you did two or three integrations together. With companies that rarely acquire, I will often run the complete program for half a year and then look for someone internally to take it over.
If you're a PE or you're doing a few acquisitions for a few years, you're better off with an external experienced consultant. I think that's better for both sides. There's a defined amount of time you'll be there, and the company gets the maximum value.