Mergers and Acquisitions

Here are the Factors to Consider, the Primary Risks Associated with Growth, and Some Key Questions that Increase the Likelihood of Success… 

There are several risks, but what stands out from our experiences has been underestimating the scale, scope and change implications of the integration and the level of assimilation required between the affected departments, divisions, subsidiaries and leadership teams when taking on a merger or an acquisition.  This is particularly important when the merger and acquisition (M&A) is between companies focused on different sectors and/or geographical regions, but these issues are important with all M&As.

Clearly, acquiring or merging with another business involves risks, but these risks are exacerbated when those leading it and making decisions are not intentionally focused on the full internal and external environments and when they fail to have contingency plans to address unforeseen business liabilities and challenges.  Some primary challenge and risk areas that we have observed are the result of

1.  Poor or inadequate communications

  1. What is/was the catalyst for the merger/acquisition?  Now compare that answer to what those who will be most impacted believe the catalyst to be.  Any discrepancies or conflict?
  2. What is your communication strategy, and who will lead it?
  3. How do/will you know you are being heard, and who is listening?

2.  A lack of transparency and inadequately preparing for the inclusion and retention of core competencies and staffing

  1. How transparent do you really want to be?  Differing stakeholder groups will need varying details and information.  What is your plan?
  2. Are there any changes/modifications to the organizational mission?
  3. What core competencies will you need on board to achieve strategic outcomes?
  4. Do the people you are keeping/adding/removing possess the core competencies you will need?
  5. What metrics do you have in place to assess/determine when core competencies are not covered?

3.   Not incorporating and building on the brand and marketing and sales efforts

  1. What are the distinct aspects of each of the separate organizational brands that must be maintained or advanced?
  2. Have you assessed the strengths and weaknesses of the marketing and sales strategies and determined which tactics you will apply in merging / separating these?
  3. Who is better—can you be as objective as you need to when completing overlapping or eliminating one or the other marketing strategies?

4.   Having two distinct cultures and service standards and not taking time to balance and merge the two (keeping the best of both and losing the worst of both)

  1. What is the culture (personality, attitude, character) of each of the affected companies/organizations and how do you know this to be the case?
  2. What are the standards for service within each organization?  Do they matter, how were they established, and what is necessary to merge these?

Leadership Is Responsible So Be Strategic About It.

When we neglect to properly consider and/or manage these issues appropriately, as well as others, inefficiencies, ineffectiveness and low productivity reign, and this threatens accomplishing the original intent and strategy that served as the catalyst for the merger and acquisition in the first place.