A well-integrated company requires an effective decision-making structure that can make decisions, coordinate work streams and set the pace. This should be headed by a highly-skilled person with excellent leadership and process expertise. Perhaps a rising star within the new company, or a former executive from one of the acquired companies. The person chosen for this role must be able to devote 90 percent of his or their time to the task at hand.
Lack of coordination and communication will slow the process of integration and prevent the new entity of accelerating financial results. Financial markets expect significant and early signs of value capture, and employees could see delays in integration as a sign of instability.
In the meantime, the base business must be a priority. Many acquisitions can bring revenue synergies and require coordination between business units. For example, a consumer products company that was restricted to a few distribution channels could combine with or buy a company that uses different channels, and gain access to untapped consumer segments.
A merger may also distract managers from their jobs because it consumes too much energy and attention. As a result, the company suffers. Finally, a merger or acquisition can fail to address cultural issues – which is a crucial factor in employee engagement. This can cause problems with retention of employees as well as the loss of customers who are important to you.
To avoid these risks, clearly articulate the financial and non-financial outcomes that are expected from the transaction and when. Then, parcel out these objectives to the individual integration taskforces to drive momentum and ensure that one company is integrated according to schedule.
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