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Things to do Post Merger and Acquisitions Better Integration

Change Management can be a useful management tool in finding new value and synergies. It is often an essential part of a successful merger and acquisition integration. Getting change management right allows business units from the merging companies to be brought together smoothly, corporate activities to be standardized and streamlined, people to be aligned behind desired outcomes and directions, and integration synergies to be delivered quickly.

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Published by 3E Accounting
on 23 Jul 2018

Things to do Post Merger and Acquisitions Better Integration

Here are some points to be noted so as to maximize the value and minimize the misery of change management

Be Mindful of Intangible Costs

The costs of an M&A are not only the upfront financial cost of closing the deal. Often overlooked are the intangible costs of change and disruption M&A brings to the businesses involved. Business performance can suffer either temporarily or worse permanently when customers and suppliers are not assured of “business as usual or better”. In addition, assurance must be given to key employees otherwise they may start to look for opportunities elsewhere.

It would be a pity to realise that post the M&A deal, key management personnel become dysfunctional or unmotivated or even moved over to competitor organisations.

Best of Breeds

There are always unpolished or undiscovered gemstones in any organization. Even for a takeover situation, the acquirer should not simply assume that their existing processes, procedures and policies including personnel are the best. Many times, the acquired business has gemstones in terms of processes and personnel too.

The reporting structure should at least remain intact until the transition is smoothened. The “best of breeds” approach of selecting processes and personnel to champion or head departments should be adopted. Personnel from both companies will then develop a sense of respect and pride for each other. This is especially important for a true merger situation otherwise there will be in-fighting amongst personnel of the newly merged organisation. Clarity and familiarity of the processes, procedures, and policies, as well as reporting structure post-merger, is very important.

Don’t Assume a Smooth Transition

After brainstorming and subsequently agreeing on the processes and policies, management often takes their hands off the handle and trust the team members to execute the agreed plan in the enlarged organisation. It is advisable that management continues to hand hold or at least closely monitor leaders of the integration team to ensure that the agreed plans are being executed smoothly and refine the plans, where necessary.

Continue reading: Things to do Post M&A for better integration

Last Modified Date: 03 Sep 2018