What are the 20 signals of poor executed integrations of companies or organizations? or How can you distinguish the “normal” problems from the “warning signs” associated with unsuccessful business integration?
Nobody expects business integration to be a hassle-free process. One or more mistakes are always made. Merging two or more organizations is a difficult task. In our practice we have never seen an error-free business integration or integration approach. Some that were close to it and considered successful.
After reading this article you will know whether there are recovery options. The intended synergy benefits are not achieved with around 65 to 80 percent of the acquisitions. Usually because the activities of the existing companies are late, incorrectly not or not fully integrated.
What are the characteristics of poor or unsuccessful business integration?
But how do you recognize unsuccessful business integration? There are many things that could indicate a failed merge. Examples of this are:
- “We and they” communications. The most recognizable form is a persistent we-they-think in the workplace. If, after a takeover, it is communicated to the personnel of the acquired party that nothing except the shareholding changes, then both parties continue to do what they did. The intended synergy benefits are then difficult to achieve.
- ‘Visit’ feeling. Business integration does not necessarily mean that parties must physically work at the same location. But if one year after the takeover one still has the feeling of “visiting” colleagues at the office, then that is a sign that there is not sufficiently integrated.
- Acting as competitors. Another feature of failed integration is when both parties meet in the market as competitors. Two teams working on bringing in the same customer not only indicate internal detachment, but also result in double costs.
- High throughput speed for CEOs. Another clear indicator is a high turnover among CEOs. If several CEOs leave in a row shortly after the takeover, this usually indicates a difficult or poorly prepared and implemented integration.
- Other alarms. Other alarms that can be observed are: difficult IT integrations, constant underperformance of the party being taken over, a highly undesirable turnover of staff, grumbling suppliers or customers noticing any change. The latter may sound positive, but it is often not. It usually means that intended synergy benefits have not been achieved. With a merger, customers are shown that they can expect an improved service or lower prices. If this is not achieved, this will eventually lead to dissatisfaction. The image below also includes numerous other symptoms that could indicate a failed integration.
If only one of the above mentioned cases is involved, there is probably an isolated problem. Hiring a specialist, for example a specialized consultant, can then offer a sufficient solution to make the company future-proof.
If more of these problems play at the same time, then the answer is given to the question “What are the characteristics of poor executed integrations?” There is most likely a deeper integration problem and a broader approach to business integration will be needed.
The house needs a new foundation, the integration needs a Second Wave integration approach!
A separate approach to the various problems can be compared to installing new curtains and a coat of paint in a house that needs a new foundation. To unlock the intended increase in value, you can use a “Second Wave Integration”. This Second Wave process is different from a regular integration. In such a Second Wave it:
- uncovered the pain points of unsuccessful integration.
- established clear integration objectives and integration principles for the follow-up process.
- reassessed the acquisition objectives linked to strict project management, clear responsibilities and a clear reporting and governance structure.
- appointed stakeholders and restored stakeholder confidence.
- creates important roles for the supervisory board.
- Produces the recovery plans and the expected results per functional area, the work streams, drawn up, implemented, monitored and reported.
To prevent you creating these 20 signals of poor executed integrations, we can guide you through your problematic integration process and are always willing to discuss your case. Just call us +31 36-202 2361 and Evert Oosterhuis, partner integrationpeople will assist you.