12 Mar A Quick Guide to a Successful Post-Merger Integration
The merger process can be overwhelming, tense, and there are a number of factors to consider. Some of the biggest questions that arise from a merger is: How will the new organization operate? What changes will be implemented? What does this mean for employees?
However, by implementing a solid post-merger strategy, the new organization can address these questions and many more. One of the ways to ensure a successful implementation is to begin the planning phases early on in the process. In fact, it’s never too early in the deal process to begin thinking about and planning for post-merger implementation.
Read on for the five best practices for post-merger implementation.
- Planning – As soon as the letter of intent (LOI) is signed, this should mark as a starting point to begin internal planning and preparation to roll out the merger. Crafting a plan at this stage allows a sufficient amount of time to ensure that financial and strategic objectives are properly aligned with organizational and merger goals.
For example, one way to kick off the post-merger implementation process is to create a resource or a content library where key documents are stored and can be accessed by team members for reference and information.
Companies that scramble to put a detailed plan in place at the last second typically end up shooting themselves in the proverbial foot, and also put themselves at an extreme disadvantage in terms of initiating a smooth transition.
- People – In order to ensure the success of a post-merger implementation, selecting key leaders and employees to assist with the process is crucial. The first step should be to formulate an implementation team to spearhead the process. This team should be comprised of employees who are experienced leaders in these types of projects.
This team will set the direction for the organization’s post-merger implementation, track project milestones, ensure accountability, and even implement best communication practices to ensure the organization as a whole understands what the merger means, how it will impact jobs, and how employees will be valued in the new organization.
- Prioritization – There are a number of activities, tasks, and moving parts associated with post-merger implementation. This is why it’s important for the leading team to prioritize.For example, having a database or records pertaining to action items, projected costs, revenue, performance metrics and schedules and time-based milestones are tools and resources available to help post-merger implementation teams to track action items, tasks, and activities.
It’s also important for teams to remember that conquering everything in one day is not only unachievable and unrealistic, it is also inefficient. Approaching milestones and action items and identifying them as long and short term goals can help teams prioritize more efficiently.
- Communication – Any type of merger can create a wave of uncertainty and panic among team members as well as how the two entities will operate as a whole. This is why communication is a key factor in a successful post-merger implementation. The post-merger implementation team will share and understand employees’ trepidation, hesitancy, and uncertainty surrounding the merger. Therefore, it’s important to create an organizational culture that practices open communication, access to information, and answer questions. Companies that don’t practice good communication will likely suffer from a decrease in productivity and high employee turnover rates.
- Culture – A merger ultimately means cultivating a new organization, with unique values, differences, and a culture stemming from each individual organization. This type of high-impact change can create friction between the two entities. Therefore, taking the time to define a new organizational culture can help mitigate that friction and associated risks during post-merger implementation.In order to ensure long-term success and productivity, each organization has its own set of values, culture, and hierarchy. Recognizing each organization’s differences is key, and should be represented in defining the new company culture. In order to do this, it is best for the post-merger implementation team to draft a hierarchy or organizational map or workflow charts and patterns in order to best understand cultural differences. Once an understanding has been reached, this data should be shared with the organization as a whole as well as its stakeholders.
Finally, in order to ensure long-term success and productivity, each entity has its own set of values, culture, and hierarchy to bring into the new organization. However, proper planning, clear-cut communication, and defining a new culture are key to a successful post-merger implementation.