Companies that move through the merger process slowly, report more severe problems with customers and operations than do fast moving ones. It’s hard work because it requires change, intuition, and a long period of time to complete.
The integration team has two primary responsibilities: speed and focus on goals and second, providing on-going evaluation of results and making appropriate adjustments. This is a full-time job on site for at least the first year. The integration team can’t parachute in and leave, it sends the wrong message and leads to critical mistakes.
What are some common issues during integration?
Communication challenges. With todays technology communicating with everyone isn’t the challenge, it’s providing two-way face to face communication that’s the challenge. Employee engagement goes along with communication. The way I have seen this handled to best is by forming small integrated (both organizations) teams that are focused on achieving specific goals. If they are given the actions and responsibility necessary to achieve along with the latitude to adjust along the way, engagement will increase. These teams can also be involved in the communication process by updating everyone on their progress. DO NOT make these BIG groups of people that spend their time in meetings.
In my experience senior management can be the most serious threat during integration. Over many years of wandering around in companies and in conversations with them I ask senior managers these questions: one, do you understand the direction your CEO is trying to take the company and how? And then I ask them how they will personally involve themselves in that process. Their answers can be categized in the following three buckets: first, yes, I get it, understand my role in getting there and am excited about it. Two, I get it, understand my role, want nothing to do with it and want out of the company. The third response and as I tell leaders the most dangerous: “I get it and will be a good solider standing by for orders”. I don’t think about it as their willingness to follow orders, rather there thinking is “I’m going in hunker down in my foxhole and wait you out or sabotage the whole thing.” The second response is probably the most honest and easiest to deal with. The first one requires good communication engagement and on-going evaluation. The third one is the most difficult to manage and potentially damaging.
That culture thing again? Earlier you have described how you complete in the marketplace (behave) how everything in your organization is structured to support that and you have evaluated how the other organization is different or similar. Therefore, what doesn’t support how you want to compete in the future needs to change. That may be in the other organization or both. Look at the acquired organizations business horizontally once and ask the following line of questions: how they talk about themselves in the marketplace, i.e., marketing material. How they sell that, how operations fulfill what sales is selling? How is the customer managed post sale? What are all the policies and procedures they have in place to support this process? What doesn’t fit for the new way has to change. I think when you use phrases like ‘cultural change’ it’s fuzzy to most and uncomfortable to many.
Technical integration is a sticky wicket. You must have great technical skills on board or outside vendor that can accomplish the technical integration goals. BUT, not many people outside of the technical realm really know whether they are on track until it’s too late. Along with ‘cultural issues’ this is another one of those land mines that requires careful full- time management.
Customer/vendor engagement does not occur via emails or phone calls. Critical customers/vendors require on going face to face meetings during the first year to understand expectations and how they are being met. Again, where I have seen this managed well is with small focused teams on key customers and vendors. If customers and vendors know they can pick up the phone, have a zoom call or get a quick response to an email they will be comfortable in staying with you through any ‘rough spots.’
What else makes this part of the M&A process ‘click’? Everyone on the integration team needs to be the ‘complete package’. Picking the right type of people for the integration team is key. It’s a given they need the technical and functional skill set but if they don’t have the ‘people skills’, “it doesn’t work so good”. Someone may know the process and problems well but if they don’t have the interpersonal skills to lead and interact with people effectively you have to question that persons role on the team.
Always remember the probability of success in an M&A increase when you use a robust process and the right people in doing the deal. It won’t be impermeable, but the difficulties will be manageable. In the military you always do battle planning and with a fundamental rule: “when the first shot is fired the plan goes to hell.” But as the battle progresses you always know when you are off plan how to readjust.