3 steps for a successful post merger integration project

According to many international media sources, 2017 will be a record year for mergers and acquisitions, and the US election has done nothing to quell that trend.

As a management consultant, I have many colleagues who have developed a strong practical understanding of the methods to prepare and steer this kind of highly complex organisational project. Having been involved with several myself I can attest that merging two companies is one of the more challenging experiences your business will face.

As a general rule the existing frameworks for this process are built to address the challenge with a holistic approach, providing process governance and tools over many areas of the business:

  • Human Resources
  • Finance
  • Sales
  • Operations
  • IT

The problem I see with this approach is that it seems to forget to address a cornerstone of the successful integration of the two companies: the employee. John Doe, your digital employee, often gets left out of consideration entirely while merged processes are developed, and is then left to fit into the united entity as best as they can — effectively left to find their own way.

As a specialist dedicated to making merger projects a success, and delivering a ‘One Company’ outcome, let me share what I think the sequence should be for an acquisition project that is driven by the digital employee’s experience.

Connect

A company is nothing more, in its rawest form, than a group of people working together (yes, I am aware of the legal distinctions, but let’s rest with this simplified description for now). After an acquisition or merger transaction, the continuing company is just a larger group of people, still working together. In order to make the process successful then it is essential that the people involved are able to work together.

To that end early focus needs to be applied to phone and mail connections. The merged entities should share one address, one URL, and one email address format. The employees should be able to access live chat and instant messaging services, and should be able to find each other in the corporate directory. Mapping that information on to the continuing platform (or onto the newly acquired platform — more on that later) is an essential task.

Similarly, if all the employees, from both the acquiring and acquired companies, have the same laptop, and the same IT Helpdesk number to call for tech support, you will have eliminated one of the early frustrations your employees will have initially following the acquisition.

Merge

As part of the Merger process the surviving company will need to mandate that both teams start using the same business tools as soon as possible. Ideally this will stop them from thinking of themselves as ‘both teams’. You should proceed on a function by function basis. First, make the two sales teams use the same CRM platform. Then make the accountants use the same tools. Make the management teams access and complete the same reports. Warehousing and logistics should move onto the same inventory tools.

Here’s one of the keys to this completing this process successfully however: both teams will think that their tool is the best one. And they’re both right as well… in the old world. In the new, unified company however, the view must be different.

In my experience leveraging one of the tools and nominating it The Chosen One is rarely the best solution. When you consider the investment required to adapt the surviving system, map the data across from the retiring platform, test it for data integrity, risk manage the entire process, then provide training to everyone who is not familiar with it… The alternative of using one company’s system for part of the operation and bolting it to the other system for different functions is even less appealing. Let’s just say that sometimes taking the merger opportunity to start from scratch with a new system can be the strongest play.

Unify

If your company is a team of players with a common set of values, mindset, work environment and history, you will need to translate this across to the team from the newly acquired company. You will need to indoctrinate them into your company’s culture, make them feel like part of the family. This is particularly pertinent when the acquisition transaction effectively means the end of the acquired entity. Be conscious through this process that everyone who is associated with the acquired company is also used to being a team of players with a common set of values, just slightly different ones from yours.

To successfully bring the two teams together smoothly, the continuing company needs to deliver their culture into the acquired business as quickly and relentlessly as possible. Reshape the facilities and environments so they are identical. Adopt the same codes and naming protocols for meeting rooms. Progressively adopt the visual identity of the merged entity.

This is the most complex and risk-intensive part of the process, and it is generally when employees start to leave. The business they are working for is no longer the one they joined all those years ago. They will feel like they have been relocated abroad, and the time has come for them to make a choice — either embrace the culture of the new country/company, or decide to head home. What is disappointing about this part of the process is that it doesn’t matter how well you manage it, there will be people who refuse to get on board with the future. You have to be prepared to let those people go.

Successful Acquisitions

I believe that many corporate acquisitions do not deliver the value originally forecast when discussions between the entities commenced. This is because the process of combining two corporate entities is still being treated as an affair in which consultants deal with executives and develop process maps. Until a higher priority is attributed to the employee experience during these transactions, the accepted result of under-performing acquisitions is just going to continue.

‘If you always do what you have always done, you will always get what you have always got.’

Henry Ford