There’s an magnificent irony to the expression ‘post merger integration’ which, as the M&A rollercoaster starts to speed up again at an alarming pace, I wanted to share with you.
In fact every part of that phrase can be challenged…
- Post – the reality as any practitioner will tell you, is that the work starts a long time before completion and potentially announcement. Many studies have shown that if you start your planning after legal completion, your already slim chances of success are reduced further. In fact, the biggest opportunity for improvement for corporates is to bring considerations of integration into the discussion as early as possible, ideally allowing the process of due diligence to be directed by the integration strategy…if one of the drivers for the deal is to access a new customer base, it follows that diligence needs to be directed towards not just the quantitative aspect of the customer base (spend, share of wallet, demographics, channel etc) but also the qualitative aspects around customer engagement. From there, building a retention and engagement plan which may include pricing and product launch strategies becomes a natural focus for the post completion period.
- Merger – in 15 years of consulting in the post merger integration field, I’ve probably come across 5 real ‘mergers’ where an attempt has been made to genuinely merge two entities in a sensitive, employee and customer orientated way…one very recently which is already showing the benefits of this approach. The most commonly used and by equal measures least appropriate expression which continues to be used is ‘best of both’ or ‘merger of equals’ as an attempt to present a rational approach to something which has deep political, cultural and people based challenges. Combining the ‘best of both’ presumes that leadership in the merging entities can identify the ‘best’ bits and reach some kind of agreement that they can be accommodated in the entity….not an easy challenge!
- Integration – probably the most unlikely result in most deals. Assimilation, adoption, coercion might all fit the bill a little better! Seriously though, opportunities for integration exist across a wide range of areas but they do not exist in finance, IT, Operations. The cost of an integrated approach to existing systems is usually enormous and the benefit hard to realise. Where real integration opportunities exist are in some of the people aspects and any effort to integrate here is often met with productivity improvement and higher levels of employee engagement…a great result.
Please don’t read this blog as a challenge to coming up with some new consulting speak to describe the activity. If I could give two bits of advice to anyone charged with doing this programme of work, they would be as follows:
- Find a person who is capable, networked and enthusiastic to take responsibility for the transaction from beginning to end (by which I mean, the very end…ie until after integration has been completed). For an activity which has the word integration in it, the amount of times I see a entirely disjointed process with separate and unconnected teams doing individual elements, is remarkable. Having at least one person who has seen it all from start to finish is a good starting point.
- Tell it how it is…if we’re acquiring and not planning on adopting any of their kit, let them know early. Humans adapt quickly and well to a logical and well communicated approach, they don’t react well to someone attempting to deceive or mislead them!
Categories: Complex transformation, Functional Leadership, human behaviour, Human Capital, Mergers & acquisitions, Politics, Post merger integration, Project Management, psychology, Systems led change