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The best way to ensure that your business merger will continue to be successful after the deal has closed is to facilitate an effective integration of cultures and means. This calculated merging of dual companies is the only way in which one can create a strong and upwardly mobile business. If the integration is not undertaken correctly, however, it could mean potential disaster for the merged company. The following points take a deeper look into the mechanics of an effective post-merger integration.
The speed in which tying up loose ends is performed after the closing may be one of the main determiners of the integration’s success. A quick plan of action will help move the company forward and secure the loyalty of staff. Once the business owner has informed employees of the merger, steps should be taken to allow them to understand the positive direction in which the company is moving, as well as extinguish any feelings of betrayal that may arise.
However, it is necessary to complement this rapidity with adequate time that allows employees to become accustomed to the new management and culture. Existing employees will be skeptical about a change in management, and careful steps should be taken to ensure that their trust is earned.
It cannot be stressed enough that clear goals for the company should be established as quickly as possible. Staff will find comfort in knowing that the new management team has clear intentions to improve the business as well as their jobs.
Business owners typically wait until after the final contract has been signed to release news of a merger to employees. Staff members will most likely feel anxious over job security and many may begin to seek out other job opportunities. This nervous atmosphere must be quickly exterminated through strong planning and skilled delivery methods for this type of news.
The new business owner should address the staff in as personal a manner as possible, assuring them of the positive direction in which the company will be moving and what it means for their job security and their well-being.
Though job cuts will most likely need to be made, see if it is possible to move those in duplicate positions to other facets of the company in order to establish greater trust. Provide resume and referral services for those who cannot be kept on after the merger to help them retain a positive perception of the company.
One of the best ways to ease employees into a merger is to retain as many parts of their familiar business culture as possible. If employees are accustomed to a special luncheon every Friday, removing this amenity will create a sense of betrayal.
All changes made must be deliberate and carefully planned. Lay out the plan of action for employees to aid them in seeing a clear indication of the company’s future.
From the due diligence process, the new owner should already be familiar with the employee infrastructure and therefore be able to create an environment in which they can continue to work as they are accustomed. Unfortunately, it is not realistic to offer different policies to various employees, so the policies of both companies should be reviewed and the best ones implemented. This time also presents a good opportunity to get rid of any bad habits within either of the existing cultures.
It may be beneficial to create a managerial team that works solely with integration strategies. These people can tackle any issues as they appear, be a source of constant communication with employees, and give advice on ways in which executives can make the integration more seamless.
It may also be in the company’s best interest to create teambuilding programs. These could be as simple as weekly meetings or as extravagant as company-wide social outings. Forging relationships between co-workers will induce natural culture integration.
While post-merger integration can be perhaps one of the most challenging parts of an M&A deal, when executed correctly, it can assist your business in growing in a positive direction. As statistics have illustrated, poor company integration can be the downfall of many successful businesses.
If you are interested in learning more about the best ways to perform a post-merger integration, please contact one of our M&A experts. We would be more than happy to assist you, and with complete confidentiality.