Managing mergers: how to achieve a successful merger
1. Plan, action and deliver
Speed is essential. Plan early, deliver fast. Post completion of the deal, the aim is to achieve synergies as soon as possible and reap benefits quickly. Going through any change will leave some people uncertain. How comfortable and how much they contribute will change as they are managed through the change curve. However, moving fast will reduce uncertainty, or at the very least get people through that uncertain period quicker. The aim should be to minimise any dip in productivity through the change period.
2. Walk before you try to run
Initially information may prove to be poor, but it will improve. A deeper understanding of the newly acquired company will come. Communication improvements need to be delivered quickly and, once they have, there will be effective data sharing followed by better decision making.
3. Political manoeuvring
The potential impact of poor information and/or political manoeuvring must not be underestimated. People will inevitably have concerns about their jobs and livelihoods. Uncertainty often brings out the worst in people. Staff may manoeuvre for power, influence, jobs and money, and will often think of themselves first and the business only second. Many types of misinformation can occur, so understanding quickly what information there is and its quality is critical for good decision making.
4. Decision time
The need to make decisions cannot be underestimated. Going with a 70/30 decision rather than waiting for 95% certainty may result in some mistakes along the way, but speedy decision making is critical. As long as they are not critical, wrong choices can be tidied up afterwards. Information will never be perfect but decisions must be made or the whole process will grind to a halt. Employees in the acquired company will generally want to change more slowly than those in the acquiring company, because they may be unclear as to the direction the acquirer wants to take.
5. Clear cut
Be big and bold: move quickly when addressing growth and cut harder if looking at savings. In general, plans are diluted during any integration programme and if some areas are cut a little too much they can be rebuilt. Leaving people in a position where there are question marks is not a good idea. A couple of years later, when they are removed, they may have done damage, having resisted the change you needed for a successful integration. This can often be why many mergers do not deliver what they should. At the outset there should be a very clear and strong plan with little room for dilution.
To find out more about how we can help you with your M&A activities, contact a member of our team today.