M&A Integration: The Case for Collaboration
by Barry Rosen
Corporations who grow through acquisitions go to great lengths to make deals happen. This blog focuses on the role of collaboration in the integration process after the deal is struck.
Successful Mergers and Acquisitions have three things in common:
- A cogent business case and way to measure success; for example:
- Increase market share
- Entré into new markets
- Market access to the target’s (or the buyer’s) products or customers
- New products or the skills or technologies to build new products faster
- An integration planning process that includes key stakeholders.
- Merger integration typically focuses on operational issues such as harmonizing product lines and information systems. Good integration planning also deals with the human factors, such as determining which groups and employees are retained and which ones are let go.
- An execution process that is friendly and agile.
- Planning is everything. Plans are nothing (Dwight D. Eisenhower). That’s because circumstances change – customers come and go, key employees depart unexpectedly, and new competitive threats emerge. Execution teams have to be agile --- to adjust plans without going back up the chain of command for a lengthy plan adjustment process.
- I also say friendly because, for the acquired people, an acquisition is a real and present danger. Many employees will move to a different role and some will be out of the company altogether. Hopefully, the displaced workers will land a decent job in another company.
Figuring out if two companies are a good strategic fit and then making the deal happen is just the start. The seeds of failure are planted in the first year after the acquisition not because of strategic miscues but because of culture and people issues:
- Work slows down because of uncertainty and self-doubt on the front-lines.
- Middle management has difficulty representing the senior leaders.
- Key staff people leave because their needs aren’t attended to.
- Mistrust between merged units stalls mission-critical projects.
Timely Collaboration is a Critical Success Factor
Good integration planning includes – in some manageable but substantive way – the people who will be responsible for execution. Longer tenured employees are often best at defining implications and identifying pitfalls.
People are inundated with information but are hungry for useful knowledge. Good collaboration helps people get the right information in a timely way, to connect with the right people to handle integration issues, and to resolve misunderstandings.
When people feel like they belong, are capable, and are appreciated, it’s more likely they’ll up their level of contribution and not look for a job somewhere else. For people whose jobs are being cut, they’re more likely to stay focused and productive during the transition. (Fair treatment of displaced workers is also a critical success factor. Otherwise, don’t expect cooperation.)
Good collaboration gives you three things: (1) accelerated processes, like decision-making, (2) more informed decisions and faster implementation. In other words, better results. Good collaboration also (3) helps meet some fundamental human needs, e.g., for clarity, self-esteem, and meaningful contribution.
You’ll have a good idea if the integration process is working when:
- People from the merged companies are taking initiative to connect and get support from each other.
- Online communities are sharing best practices and suggestions.
- The common vernacular is we and not you and us.
How Interaction Associates Can Help M&A Integration Leaders
In the integration-planning phase, IA consultants help identify pitfalls and put preventions in place. We map out key decisions and suggest where stakeholder input will be useful.
We build cadres of integration team facilitators who guide teams to faster and wiser decisions, and who help reconcile differences of opinion.
In mergers that include cross-country and culture integration, we design and facilitate cultural understanding and appreciation processes.
We help leaders socialize important ideas by facilitating large group idea syndication & assimilation sessions with up to 150 people at a time – to communicate messages, to solicit feedback, and to build commitment.
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