You’ve just spent months doing due diligence and negotiating terms, and you’ve finally acquired another company — or your company has been acquired. Finally, the hard work is done.
Or so you thought. Now begins the process of integrating the two companies, bringing together people, processes and procedures, culture, technologies and management responsibilities as seamlessly as possible. It can be done, as long as you give the process the same attention and commitment you gave the financial transaction that brought you together in the first place.
Here are the next steps to managing the post-transaction integration process.
Ideally, this starts before the deal is even announced. Who will be on your integration team? The acquiring party should take the lead, appointing subject experts from both companies to assist with HR, IT, accounting and the overall business integration process. Give your teams the power to make critical decisions and to ensure that the process follows an integration roadmap. If you’re initiating these actions before the sale is finalized, consider implementing confidentiality agreements before teams go to work.
Maintain a reasonable timetable
Don’t lower morale with unrealistic expectations, but keep your teams on track.
Quickly resolve management issues
Who’s in charge? You don’t need two CEOs, two COOs and two CFOs. Make sure that executives know the scope of their new responsibilities, or whether they’ll be involved at all. Avoid keeping secrets. If people feel their positions will soon be eliminated, it negatively impacts productivity and morale.
Keep in mind that even when top management responsibilities have been resolved before the sale, there may be clashes. For instance, when a mid-sized company is acquired by a much larger organization, the former CEO of the smaller company might not be emotionally ready to assume a lower position on the org chart.
Review all accounting, IT, HR, email and process management systems. Can your new IT staff form a workable network out of these two systems without confusing your people or losing efficiencies? Can you put in place systems that allow both sides to feel secure and productive? Once, while helping a client through a merger, one company had the very common Microsoft Outlook email system, while the other had the less popular Lotus Notes. For some reason they decided to convert everyone to Lotus Notes. It likely made an impact, but was it a positive step?
Respect diverse cultures
This is the area where you really have to tread carefully. Every company has its own culture and values. I once worked with a company that was bought by one of the nation’s leading technology firms. While we’d always had a policy of reporting to the office daily, our acquiring company was developing a flexible policy that allowed employees to work remotely. Most of our people probably thought it was a positive change, even though it impacted how we scheduled meetings and communicated face to face.
In other situations, dramatic cultural shifts can intimidate people and hurt morale. Before initiating major changes, the lead party should study the culture and practices of the new partner. If changes that affect culture make sense, do it — but take the time to explain why the change is in the interest of everyone.
Establish the brand
New branding can change everything from business cards and letterheads to logos and taglines to sales and advertising strategies. If a much larger organization is acquiring your business, your former company might simply assume the larger partner’s brand image. But if it’s a merger of two equal or near-equal partners, it may be in your best interest to develop a new brand for the new company. This is a great way to unify people, so give it time and thought, and bring in the advertising and brand-building experts.
Implement the new company vision
This is a long-term function that involves aligning your new company’s goals, culture, management methods and styles, pay and job review structures and other HR functions. This will probably only happen once all major players are in place and your people have started to work together comfortably. Don’t rush it. True transitioning takes time and effort. Be patient and let your new company come together organically.