From Information Overload to Streamlined Processes: My Journey in Post-Merger Integration
As I sip my coffee this morning, I can’t help but reflect on my early career days in the 1990s. I was a recent MBA graduate eager to make my mark in the mergers and acquisitions industry. In retrospect, I had no idea what I was getting into!
Those early transactions resembled the Wild West, with chaos and long hours spent deciphering mountains of paperwork. It has always astonished me that two companies could join forces when they barely knew one another. Yes, information was exchanged during the courtship and deal-making phases, but the level of due diligence was different from today.
I will always remember my first M&A project assignment. I was thrust into the due diligence phase with only a list of items to investigate for direction. It was information overload attempting to rapidly evaluate the target company’s financials, operations, technology, and legal issues.
I was submerged in binders upon binders of documents. And don’t even get me started on handwritten notes; sometimes, I needed help deciphering my scribbles! The process was so disorganized and disorderly that it is almost amusing retrospectively. But at the time, it was highly stressful to synthesize mountains of data into a convincing recommendation regarding whether to proceed with the acquisition within a condensed time frame.
Thankfully, times have changed, and conducting due diligence for an M&A transaction today is much simpler.
Advancements in technology have been a total game changer, allowing for much greater efficiency and transparency. Virtual data rooms packed with searchable documents have replaced the disorganized binders I had used in the past.
Rather than playing an endless game of “integration planning” on the telephone, remote team members can communicate in real time with collaboration apps. However, successful M&A preparation requires meticulous planning and cross-functional coordination, even with enhanced tools. I’ve learned this hard truth throughout my career, including dozens of transactions.
Different combinations exist, so you must rely on something other than a generic checklist or playbook. The preparation process must be tailored to the specific acquisition by thoroughly evaluating the strategic rationale and potential risks. It boils down to asking the appropriate questions to the relevant people at the proper time.
Individually and collectively, I like to interview executives from both companies to determine their priorities, concerns, and vision for the integration. The objective is to identify potential disconnects early on so they can be resolved proactively rather than derailing the transaction.
Next, I will meet with leaders from key functional areas, such as finance, HR, and IT. I investigate how each department currently operates and outline what the integration will entail. IT systems consolidation can be a massive undertaking, so I will involve technical experts early to begin planning. HR must also have ample time to evaluate talent from both organizations and thoughtfully prepare for right-sizing.
Experience has taught me that site visits are invaluable for observing operations firsthand and interacting with front-line employees. They offer perspectives executives in their ivory towers may need to pay attention to. I vividly recall touring a factory slated for divestiture following an acquisition, only to discover vital tribal knowledge that was never documented. We averted a catastrophe by modifying the transition plan to retain these veteran employees.
Communication is another important aspect of M&A planning that can make or break deals. Keeping employees informed of what is happening, when, and how it will affect them is essential for sustaining employee engagement and productivity. Town halls, newsletters, FAQs, and focus groups are effective channels for sharing updates and gathering input. And I always allocate funds for post-closing team-building exercises; recently, axe throwing has been a hit!
Most importantly, I begin planning for integration on day one, well before a deal is finalized. Too often, organizations need to work on their time until the eleventh hour, resulting in hasty, value-destroying efforts. I assemble a dedicated integration team of members from both organizations to map out priorities, interdependencies, risks, and progress metrics. This up-front plan is essential for capturing quick wins and maintaining momentum immediately after the deal closes.
Having the proper tools and technology in place is the secret to the success of mergers and acquisitions. PeopleOne is a game-changing platform that provides integrated access to work files to foster productivity and seamless collaboration. Is employee engagement features, such as discussion forums and activity feeds, ensure everyone feels aligned, informed, and connected through the integration. Appreciation tools reinforce a culture in which individuals feel valued. Simple workflow automation integrations facilitate the streamlining of operations.
Previously disjointed M&A processes become more unified with PeopleOne. It enables the conductor to keep everything and everyone in sync and on time despite the chaos. Change management is facilitated by monitoring sentiment and maintaining open communication. When tribal knowledge is centralized and accessible, onboarding new employees is encouraged. In short, PeopleOne harmonizes the entire M&A journey, orchestrating a fluid integration that hits all the right notes.
As a result of my early missteps in integrating mergers, I’ve developed an organized yet adaptable approach tailored to each transaction. For a smooth transition, meticulous planning and constant communication are essential. Utilizing tools such as PeopleOne to increase productivity, participation, and transparency enables proactive issue resolution instead of fire drill mode. Understanding people’s concerns and priorities and effective project management are essential to the successful merger of two organizations. I’m confident that any transaction will exceed its potential with this formula.
The time has come for me to refill my coffee and return to it! Please let me know if we can assist you with your next M&A endeavor.