Every Deal is different, but you still need a plan
In the current global environment, achieving the goals of a Merger or Acquisition is more important than ever and managing the post-merger integration process is at the forefront of every dealmaker’s mind.
While every deal is different, and whether big or small, having a thoughtful and planned approach to integration is a must. Unfortunately, this is where many companies fail to execute well and it is usually because they don’t put value creation at the core of their integration strategy.
When the plan or the tasks to achieve that plan are not well defined, are vague or sit uncoordinated with disparate teams, the integration will stall or completely fall apart. The results can be disastrous as teams potentially tread water or lose intensity because the roadmap is unclear.
Success in integrations is a byproduct of good communication and execution, which in turn arise from solid planning and deployment of tools and process to execute that plan.
Plan Ahead and Communicate
Ideally, merging two companies is a seamless process. But, most of the time it is a rough ride at best. It is crucial for M&A professionals to understand and prioritize certain integration issues.
Ultimately, the success or failure of a merger is challenging to measure in the years immediately following its completion. Therefore, determining, planning, and communicating goals and strategies should be a top priority for management teams from the very beginning.
To help plan and streamline the process to integrate, companies should utilize M&A specific technologies to facilitate the integration process, from day 1, through the first 100 days to final completion.
Communication and collaboration areamong the most important factors in determining a merger’s success and is often the one component of post-merger integration on which all others depend. Additionally, the ability to assign tasks to individuals and teams, monitor progress and facilitate informed communication throughout the process.
As newly formed management teams assess the best opportunities moving forward, the best integration tools make the integration process more efficient and productive by allowing integration teams access to not only all the required documents of both companies, but also assign and track all necessary tasks and run real time reports on progress, facilitating informed communication.
Key Components to a successful integration:
Determine The strategic intent:
A precise and specific strategic intent with clear value drivers such as improving target performance, industry consolidation – remove excess capacity, speed-up market access, competencies and skills acquisition is critical to success.
Teams must define a very pragmatic strategic implementation plan, based on a care set of critical actions to be tracked at top management level with appropriate indicators.
Conduct Solid Due Diligence
Confirming that the target is appropriate regarding the strategic intent or reassess your plan is a must. Listen to the weak signals, be brave!If reality happens to differ drastically from due diligence findings, acknowledge it and move to a B plan that can re-focus management
Formalize the adoption of the B plan as a new acquisition project, for education purpose and to keep top management as involved in the post-acquisition phase than in the acquisition phase
Optimizing the Integration Process
Putting together a cohesive and clearly defined management team will help mitigate integration anguish. As new management teams are usually comprised of professionals from both organizations, the importance of having a clear leader cannot be underestimated.
There should no confusion about who is in what role prior to the close of the deal and all should be ready to move forward with the new team.
Asking the top management to focus on strategic intent delivery and value creation drivers is easier when there is a strong Post Merger Integration process and tools that capitalize on past projects’ successes and failure, reinforces the timeline and defines the transition phases and gives a real-time overview of the overall project including all integration activities and is designed to suit each particular acquisition and the integration policy of the acquirer
Understanding the value of human capital and Integrating Company Cultures
Reviewing the critical employee data of the company being acquired is exceptionally important early on; do not leave executives’ fates hanging in the balance. Quite often, acquiring companies do not act sooner on their decisions about employee placement due to the fact they lack information about the people who are employed. Delaying crucial management decisions make integration more difficult, leaving employees frustrated and resentful, undermining the potential to achieve goals and develop new synergies.
Key employee retention plans in place, turnover measurement, long term development plan, mobility plan, crash/succession plan if your strategic intent is based on competencies acquisition
Creating a common culture, especially when companies are in different countries, can be very difficult during post-merger integration. Developing a common culture is frequently the biggest trouble spot when merging two companies. It is all about people. You have to be able to understand and combine cultures as quickly as possible.
Sharing information and facilitating communication is critical to this goal and the best tools take this into consideration.By communicating the intent and the required steps to achieve, both the target and acquirer teams understand why this transaction took place, how they will benefit from the transaction and what they need to do to make is successful.
Always Be Ready…for rapid deployment.
Opportunities present themselves suddenly and being prepared for them is critical. Having a set of standard operating procedures and actions put teams in the best position to address any eventuality. The ability to learn from past projects and incorporate actions and processes that worked while discarding unnecessary or non-working elements only adds to future successes and should be a consideration when deploying a tool.
MergerWare’s advance solution helps dealmakers define one comparative set of post merger integration,post-acquisition performance indicators and provides management with a clear view on actual performance vs. the business plan, provides stakeholders with a concise and comprehensive view and vastly reduces the time required to generate reports.
Want to effortlessly plan and manage your post-merger integration? Want synergy created in every deal? MergerWare will help you do just that!