According to Deloitte, empirical studies indicate one in every two Post-Merger Integrations result in poor outcomes. PricewaterhouseCoopers lists four important areas acquiring companies must consider when integrating their new merger into their organization:
- Achieving synergies
- Completing integration within ambitious timeframes
- Successfully managing culture and change
- Implementing strong project governance
Indeed, according to McKinsey & Company some 95 percent of executives describe cultural fit as critical to the success of an integration. Despite this fact, 25 percent cite the lack of cultural cohesion and alignment as the primary reason that integration efforts fail.Naturally, there are many aspects to culture, so perhaps this is to be expected. One might question then, where do acquirers and targets fall in terms of hierarchy?
These differences bring to light important questions around trust, which is something central to any merger. Despite trust being a key ingredient for all parties involved, M&A activities are typically shrouded in secrecy until it is unveiled and they often quickly dissolve into an “us” versus “them”.
When leadership knows that a merger is on the horizon, their focus should pivot toward how various stakeholders in the transaction are going to receive the message. After a large deal has been announced, stakeholders require:
- Accurate and timely information
- Strategic goals of the merger
- A roadmap for change
- Stability and clarity
Leadership sets the tone in large cultural shifts. With consideration towardChange Management, leaders should acknowledge what is happening and hear their teams out. To be successful, they need to provide managers with the information and tools necessary to communicate the goals of the transaction to their subordinates.
Using a cascade approach, leadership can provide managers with targeted communications to inform their teams of changes which may affect them.The message should be clear and attempt to provide answers to any questions that subordinates may have. Naturally, this takes time, so these steps need to be crafted before the merger is publicized.
In anticipation of the merger, leaders should evaluate if they- and their managers, have the skills required to achieve the goals they desire. If not, it may be necessary to seek out a specialized consultant to develop leadership capabilities and trust to effectively integrate the target.
John Miller, is the founder and CEO of Strategeus, a global management consulting firm specialized in developing strategic alignment teams for post-merger integrations.
