Common M&A Integration Problems and How tp Prevent Them
By the time many deals get to the integration phase, team burnout and fatigue, along with all of the moving pieces of two companies coming together, can create some murky, complicated waters. Further complicating matters are things such as company culture and organization, deal frequency, the type of deal taking place (domestic vs. global), and the age of the company affecting integration.
For industry experts, it comes as no surprise that integration is often a more challenging task than diligence; being cognizant of why it is more challenging is key to improving integration practices.
Here are 4 common integration problems facing M&A practitioners:
1. Managing different work streams
The number of workstreams can double after an acquisition. Determining how to best organize and manage these workstreams, as well as determining which key players from both the buy-side and the sell-side should be a part of each workstream, is challenging to say the least. Some steps that can be taken to address this problem are to have a change management expert on board who can interview and really get to know the target company employees before integration begins. This will lead to less resistance and clearer expectations when day 1 arrives. (You can read more about the power of change management in our blog with expert Dawn White.)
Additionally, hosting a proper kick-off meeting at the commencement of the deal, where leaders from each workstream should be identified, can help. However, perhaps the ultimate approach that can be taken to address this challenge is adopting and teaching an Agile mindset. A paramount element of Agile is accountability, and in order to be accountable, team members need to know and understand their roles; in addition, one team member should be the manager who is responsible for setting the team’s priorities, which should center around the key goals of the integration. With each workstream building its list of tasks around the established essential goals, the sum total of all work will be moving in the same direction with the same vision.
2. Visibility across teams
Workstreams need to be in communication with each other. This can be done via stand-up style meetings where a manager from each workstream participates in a short meeting and reports to the other streams and upper level management what his/her team has been working on and what, if any, information is needed from another team. Post merger integration tools can also help create visibility.
3. Duplicate work
Failure to have visibility across teams very often results in duplicate work. Duplicate work wastes time, money and resources, hindering successful integration. Teams that duplicate work are inherently inefficient, and, therefore, the expected value of the deal will not be realized.
4. Use different tools and different styles of management
Lack of a central hub for sharing information and/or relying on separate management tools also impedes integration. Integration is the marriage of two companies - this means similar management styles must be cultivated and the same tools must be used. When these things are done, visibility across streams increases, the amount of duplicate work decreases and the full potential of the deal can be realized.
The difficulties of post merger integration can be addressed through the adoption of a more Agile workflow and expert insights, both of which can be assisted by tools designed for M&A with a focus on integration planning, such as DealRoom. This phase of mergers and acquisitions cannot be over simplified; therefore, the above is meant to raise awareness in teams and to spark a journey toward efficiency and new best practices. More specific information regarding integration and Agile can be found at DealRoom.net.