Effective Strategies for a Successful Acquisition Integration
An acquisition integration refers to merging the operations and processes of the acquired company with those of the acquirer to generate more value together than they did individually. However, the process can be challenging because acquisition integration often involves bringing together companies that operate processes, manage customers, and organize roles and responsibilities. More importantly, acquisition integration entails combining different cultures.
The acquiring company must begin planning the integration even before the deal is announced to the employees and the public due to the urgency of priorities that must be addressed. For instance, the people who will occupy the senior-level management positions should be decided upon quickly to avoid further delays. These top executives should have a clear understanding of the vision and goals of the new organization.
To succeed in acquisition integration, the acquirer must take the lead and appoint an integration manager who has relevant experience and skills to oversee the entire process. This person will have the authority to make decisions, coordinate the staff, and set the pace of the integration process. An integration manager should also establish an integration team comprising experts in every area of the integration, including accounting, marketing, technology, legal, and human resource management.
One of the biggest problems during an acquisition is deciding how to integrate different cultures. In a company, culture refers to the shared ethos of an organization. It is the set of norms, assumptions, and values that guides how employees perform their job and interact with each other. The integration manager must ascertain the culture or the nature of the environment of the acquired company and decide how much of it should be retained. This person should recognize and encourage some aspects of the company culture that work or allow employees to function efficiently. The integration manager should also identify bottlenecks in the company’s operations and determine how the acquirer can help by applying successful business practices.
It is important to create a clear, detailed, and doable plan called the playbook. Besides the people involved in the integration, the playbook should include all the expectations, tasks, due dates, and assigned responsibilities for each department. Failure to craft an integration plan could result in poor performance in the core business. The integration itself requires too much attention and energy. If the process drags on longer than it needed to, uncoordinated actions could distract the managers of the core business and result in miscommunications with customers.
When changes have been identified as part of the due diligence, the integration manager should incorporate them into the plan. As the integration progresses, the integration manager must compare the actual results to the initial objectives to point out cost reductions and revenue generation opportunities.
If there will be layoffs or job reassignments, the acquirer should communicate the news clearly and promptly. Failure to do so will result in a rumor mill that is challenging to track and can adversely impact employee productivity. When details of the acquisition hit the news, competitors typically seek talented employees. To avoid losing key talent, both the acquirer and the acquired company should meet with these employees, assure them of their employment status, and determine whether they need incentives to stay.
