5 Tips For a successful Merger & Acquisition Integration
When companies merge such as Oriflame acquisition of Suzy beauty, L’Oreal and Nice and Lovely, ICEA Lion Group, Brait Mauritius and British retailer New Look among others, they bring people together too. The biggest challenge that interested parties face is How do you merge the hearts and minds of individuals from different corporate worlds?
With a renewed focus on Africa as the next business frontier, the year 2015 saw activities in the corporate sector in terms of merger and acquisition . Research from Viffa Consult Limited shows that while only 17% of deals create significant value, poorly executed integration causes 70% of mergers to fail.
Having a proper integration plan is standard if you’re a serial integrator – but what if you’re not? How can you ensure that your deal pays off?
Here are a few tips on how to manage a M&E
1) Be crystal clear on what you want to achieve from the deal
It sounds obvious, but if you can’t explain what the combined business looks like, the exact sources of synergy and their expected value before the deal, you will not be able to explain them post-execution either. Moreover, you’ve missed the opportunity of doing proper due diligence for your deal. If there isn’t a common view of objectives when you go into due diligence, the diligence will not produce meaningful results for your deal.
2) Get the right people in the room from the start
Think carefully about who holds the power and influence in the organisation – this may not be what you see on the organisational chart. In a family business for example, identify who has final sign off – is it the CEO and CFO, or the family directors? Make sure that you have HR and broader representation around the table, not just senior management. Identify key representatives for the whole organisation. Work out who is critical to making this deal work – it could be customers, suppliers, acquired staff, existing staff, and regulators – and make sure they are involved early.
3) Develop an implementation plan – it’s what the experts do
So you’ve got the deal over the line. But what about day one, when you take legal control? .Include an implementation budget from the outset – otherwise it will be a case of ‘we’ll get by’ with no resources to oversee the process, and then it is too late. Select one of your top executives as integration director. Initially the aim is to have an integration plan. Further having a clear plan that is properly communicated really settles the organisation. Viffa Consult though its M&E tools can assist organizations in developing an implementation plan
4) Don’t ignore cultural issues
An M&A deal is not just a legal agreement. As with any business endeavor, to lead successfully you need to win the hearts and minds within the organisation. Cultural integration and culture clash are often low priority considerations in deals, yet have the power to totally derail business outcomes. Invest the time early enough.Think about how factors such as feelings, emotions and cultures will affect business outcomes and address these in the implementation plan.And it’s not just the big changes that impact engagement. It is often the small things that really mean something to staff.
5) Invest time and money in getting people together immediately
Allow people from both organisations to interact and understand each other’s fears and motivations. Get them to work on something real together, even just something internal. There’s no substitute for bringing people together face to face,even if it’s an international deal, the travel cost is worth it because “the investment pays off many times over”
M&E are complex in nature and these are just but tips on how to go about. For more information kindly contact us through info@viffaconsult.co.ke
https://viffaconsult.co.ke/5-tips-for-a-successful-merger-acquisition-integration/