Post-Merger Integration: Challenges & Tips to Avoid
Post-merger integration brings many challenges: the potential for your company to lose focus as it is combined with another, having to let employees go and negative impacts to your financial performance, to name but a few.
As experts in driving successful business transformations for our clients, we’ve outlined some of the most common post-merger integration challenges alongside some helpful tips to mitigate their effects.
What is post-merger integration?
Post-merger integration is the process of combining people, processes and technologies from two separate businesses after a deal goes through. This is an incredibly complex process that, when conducted correctly, leads to an increase in revenue, a reduction in competition and access to new markets.
Common Challenges of Post-merger Integration:
- Choosing effective KPIs to keep employees and post-merger integration processes on track
- Navigating shifts in company culture after post-merger integration takes place
- Post-merger systems integration
- Post-merger synergy identification
- Keeping customers engaged during the post-merger integration process
Choosing effective KPIs to keep employees and post-merger integration processes on track
When business leaders fail to identify the right KPIs to keep tabs on both the post-merger integration process and employee ongoings, it becomes harder to understand where issues may arise, allocate resources to where they’re most needed and gain real-time visibility into the scope and progress of their integration.
Oftentimes, post-merger integrations will involve changes in employee positions and job duties, including the introduction of new management and high-level executives. Without proper planning, this can cause costly setbacks to your post-merger integration process as employees scramble to adapt to their new role or management style.
In order to keep employees engaged and working collectively towards a common goal, it’s vital to take the time to identify the right KPIs to keep tabs on employee ongoings and post-merger integration milestones.
Navigating shifts in company culture after post-merger integration takes place
Combining two separate business entities requires the combination of two different company cultures, which can be difficult to maneuver if there are contrasting ideas regarding how the business should be run.
It is essential to integrate a plan that leverages culture shifts after an integration, as without proper preparation, a post-merger integration can leave employees feeling unsupported, isolated and doubtful about the future.
Post-merger systems integration
Even if the businesses being integrated are utilizing the same technology systems or software, combining them is incredibly challenging, especially if there are any custom-built applications or tools within a configuration.
Not only do you have to choose which system to utilize and integrate but you also have to ensure everyone is properly trained on how to use it, which can cause costly setbacks without turning to the proper technology experts for guidance.
Post-merger synergy identification
Identifying areas of synergy or successful collaboration is a vital step to a successful post-merger integration — but oftentimes, even if you’ve put into work to identify these synergies, it can be difficult to integrate them once your post-merger integration process is underway.
As such, it is not only vital to identify synergies but also develop a concrete plan for implementation so you can make sure your goals are actualized.
Keeping customers engaged during the post-merger integration process
Shifts in business operations and processes can cause friction with customers if you fail to keep them properly informed.
It’s easy to get caught up in the changes to your business – but your customers will experience these changes, too. As soon as your transaction goes through, it is essential to do what you can to inform your customers of your post-merger integration plan and outline any changes to business operations that may impact them.
How to Avoid Post-merger Integration Challenges
To be blunt, most of these challenges can be avoided if you take the time to conduct the proper planning for your post-merger integration and develop concrete communication processes to keep everyone informed.
Oftentimes, this requires turning to outside support to help you allocate resources to where they’re most needed and provide expertise regarding change management, technology implementation and more.
Essential things to include in your post-merger integration plan
- Integration Roadmap: An analysis and outline of the current business state alongside future goals and objectives to ensure all parties are aligned on how to effectively drive post-merger integration success.
- Change Management Roadmap: A plan to prepare, equip and support your employees, customers and company culture in order to ensure project outcomes, timelines and budgets are kept on track. This also includes an outline of any changes to new systems and processes and the impacts they have on your business and stakeholders.
- Risk Management Roadmap: Developing a plan for the global, state and local compliance regulations your business must adhere to in order to maintain an effective and secure control environment to safeguard your organization.
- IT Implementation Roadmap: Fostering alignment of IT systems with a focus on eliminating redundancies, optimizing efficiency and building long-term capabilities. This roadmap should also include a plan for driving successful communication, process enhancement and customer success.
Need Post-merger Integration Support?
Closing a deal is hard. Implementing a successful integration is even more difficult. At Bridgepoint Consulting, we understand that a successful post-merger integration is critical to unlocking the full potential of a deal and realizing its maximized value. To ensure desired results, we work together to outline a strategy to help you get from point A to point B. After evaluating the current state, we’ll outline future state goals and objectives to ensure all parties are aligned on where we need to go and how to get there.
Contact us today or learn more about our Post-merger Integration support services at the link below.