The close of a Merger & Acquisitions (M&A) is also the beginning of another crucial process: integrating two organizations. This next step is often riddled with challenges. Thankfully, this part of the process can be assisted by a project finance team. The thoughtful strategy also helps in avoiding integration obstacles.
Establishing plans for leadership, communication, and cultural integration early and effective management will allow your business to develop a more seamless merger and sidestep some common issues.
Before rolling out a massive change to your business, you must establish the process leaders. A lack of leadership alignment and support is why many integrations fail. Identify the leadership team at the start of the process as they will be tasked with facilitating the integration effort. While there’s no correct answer for who to add to this team, including people from both organizations is crucial. Elevate people who are enthusiastic about the move and the next stage.
After identifying who will lead, prepare them for the task. Evaluate their capabilities in managing change, communicating goals, bringing groups together, and strategic pain points. Next, provide training and support to the leadership team. Bolster skills and ensure that everyone is aligned with the new organization’s vision.
The leadership team must review two processes, operations, financials, and others, and then find the best way to integrate the acquired company into the joint organization. Amidst all this technical work, focus on integrating culture. No companies are alike despite deeming that your acquisition is a great fit.
Review the culture of each organization and understand similarities and what’s different. Work with the leadership team to find what the new joint culture will look like. Check shared values and discuss management style across the new organization, including employee expectations, engagement, communication processes, and innovation. The acquired organization may have strategies that could be used to enhance the larger organization. Aim to create a new entity where the sum is greater than the parts.
Proactive process management
Integration advisors agree that a company has around 100 days after the deal closes to finalize the integration. A longer timeframe can make the process go a little sideways. Silos arise. Systems get duplicated. Employees ready for the change can go back to their old ways. Initiating any integration can become more complex and potentially more expensive. Implement the integration process as quickly as possible and then manage it proactively throughout the first critical three months. Establish project finance goals that you need to achieve and a timeline to accomplish them. Review your progress in the integration goals regularly, and reevaluate as often as necessary.
You may be required to adjust your plan when unexpected circumstances arise. However, planning for the integration and managing finances thoughtfully with project finance assistance will work wonders toward an effective business continuity and minor disruption for employees and customers. Indeed, merging two organizations is a momentous undertaking. Use the best practices here, and you’ll develop a process that will benefit both companies in the best way possible.