5 Steps for Blending Companies

Predictable changes after an acquisition  include a 50% drop in productivity that is not regained and sales drops between 10-60%. Up to 75% of executives in the acquired company leave within 3 years and the bleeding continues for a decade before recovery!  Over the 18 month course of an average transition, there is extensive organizational “bruising” with unaddressed people, culture and process problems. Many companies drift toward improvised solutions and makeshift answers, relying on a crisis management style that keeps anxieties high and morale depressed, a recipe for sales collapse and executive flight.

It is possible to alleviate the stress of blending two distinct entities.  One of the first steps is to anticipate likely scenarios instead of hoping that they don’t come up. Do not simply hope that there is a chance for success – instead, leave nothing to chance.

Establish Clear Direction

Usually a key executive receives the job of operationalizing the deal.  He or she should focus on developing a 24-month strategy and vision for going forward. The first instinct is to cut away redundancy, deal with overlaps and release surplus employees. Instead, focus on engaging both organizations and evaluating core processes for synergies. You’ll have your chance to reduce one-time and recurring costs.

Make a Solid Plan & Process to Implement

Engineering the integration of core processes is the most important planning you’ll do. Often the buyer comes in and simply institutes their policies and procedures by fiat. This top-down model fails to unlock synergies from the ground up. It is counter intuitive to allow synergies to emerge rather than getting everyone on the same page, fast. But it is a critical phase that releases the true value of the deal. With new processes identified, link the new structure and budget to them, not the other way around.

Engage, Engage, Engage

People are not processes. It’s tempting to put them into a mass category and feed them platitudes, coffee mugs with slogans and t-shirts about teamwork, but your people are watching to see if your words match your actions. If you act incongruently, they will cease listening. They are the team that will carry out and implement the new vision. If they’re on board, you’ll see things move smoothly; if they’re not, resistance, balking and negative talk can torpedo your efforts. Engage them on every level.

Leverage Predictable Dynamics and Timing

Two I.T. departments or two marketing departments are going to get along famously. No? Recognize the realities of the situation and develop strategies for leveraging heightened competition and an expanded knowledge base. Anticipate reactions at each stage of the merge and you’ll be way ahead. Shock gives way to uncertainty which gives way to acceptance and new development challenges.

Lead with Courage & Persistance

Leading this initiative, you’re in the cross hairs. Supporting policies and procedures have to be developed to reinforce direction, structure and processes. Many voices, interest groups and individuals will attempt to influence your judgment. M&A is the time when you tap into your leadership potential and rise to the challenge. Nothing less will do.