Putting together case studies of past post-M&A integrations brought me back a few years in time. As I was going through each integration project, I noticed some recurring pain points. Thinking of it, I would always expect them and develop strategies to mitigate them. And yet they would bite again in the heat of the integration.
#1 – Culture eats strategy for breakfast.
Financial due-diligence is a given in any transaction, but what about the cultural due-diligence?
As part of the integration, the alignment of the two cultures cannot be avoided. Be it attitude towards risk, approach to compliance, or perhaps it’s the decision-making style, reporting style, or authority delegation, to mention a few cultural challenges. A detailed cultural assessment helps with the preparation of the target operating model. By identifying the business areas which are likely to offer high resistance to change, you can mitigate the risk of silo thinking and prevent the “we vs you” attitude.
Relying solely on official corporate values provides poor outcomes for organisational integration. Especially if they may not always walk the talk. Even worse if they have developed unwritten rules over time. Pairing teams from the integrated companies have the benefit of providing great insights at the floor level. But, it requires a level of high level of openness, trust and cooperation that takes time to build up, especially, if a re-organisation is looming around. And that brings us to the “What about me” concern.
#2 – Wait, what’s in it for me?
Let’s face it, who are the only people excited and passionate about the prospect of post-M&A activities? Business integration managers, like myself!??
For staff members, it quickly becomes a burden. Not only do they have to deal with an additional workload, but they also are met with shuffling priorities and uncertainties around their position. Then there are the promotion and managerial prerogatives as well.
So how do you reduce rumours and keep staff members engaged? Well, through clear, consistent corporate communication which provides a compelling vision. The challenge here is to be able to develop a targeted message to individuals at a very early stage. The cultural assessment plays an important role, and identifying the right channel to reach them is crucial. However, developing the right content is a daunting exercise. The details of the integration are yet to be finalised/subject to be changed. And that leads us to consider the inherent uncertainty of business integration.
#3 – Facing the unknown. Truly.
“I know one thing; that I know nothing.”
By nature, what does pre-deal diligence bring? Only a fragmented and superficial understanding of the acquisition target. There is an imperative need to start planning integration activities as early as possible. There are also a lot of assumptions from the pre-deal stage. These assumptions make the synergy realisation plan subject to multiple revisions. If you don’t understand and accept the need for flexibility, it will lead to sub-optimised value creation.
Luckily, Agile Project management provides all the tool needed to implement dynamic planning. Once set up, an integration management office is a strong governance platform. The office delivers consistent communication, timely decision making and accurate reporting.
But, this flexibility does have a cost. You may need extra resources and further disrupt the day-to-day job of functional leaders and their teams.
Closing the loop; understanding the Change culture of the integrating companies and building trust are key. Once you achieve this, you can safely begin executing the integration at the right speed.
Dit artikel is geschreven door Jean-Paul Meynard, PMI expert in Australië en is gepost op linkedin op 19 september 2018.
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