Post Merger Integration

Handling a Post Merger Integration

Communication is key before, during, and after a post merger integration, as the process can continue for an extended period of time. Human capital due diligence is of great importance at this time, and the workplace culture must be considered along with the staff members. If either is neglected, the company could lose key individuals and falter. These individuals have the expertise and knowledge needed to make the new organization a success, thus they need to be considered throughout the process.

For this reason, any company involved in merger & acquisitions needs to keep this in mind and ensure they are taking the necessary steps at every stage.

Planning Is Crucial for Post Merger Integration

Individuals cannot wait until a merger reaches the final stages to begin planning for the transition to one organization. An integration team needs to be created during the early stages to ensure the process is monitored and carried out correctly. The team assumes the responsibility of identifying any issues that may arise in an effort to minimize risks and determining priorities to be set that involve the integration of the organizations.

To accomplish this goal, the team needs to carry out a comprehensive operational analysis. Communication is crucial to ensure employees understand their role in the process. This helps to decrease any costs associated with the integration and to reduce risks. The team works to ensure the deal is a good one that will benefit all parties involved, and this is only one area in which the team will be beneficial.

Risks Other Than Financial

Additional risks need to be considered throughout the merger process, not simply financial ones. Structural risk is one area to focus on, as headcount reductions need to be determined ahead of time. This ensures the new organization isn’t negatively impacted by rapid restructuring. Talent in each organization also needs to be assessed to ensure key people remain in place, and the culture of each organization must be factored in. Who makes decisions in each organization and what is the leadership style of each company? Questions such as these need to be answered to ensure a smooth transition.

Four Steps That Should Not Be Overlooked

Four steps need to be taken during the merger and acquisition process. By taking these steps, companies find they are able to create a strong human relations strategy that will benefit the organization for some time to come.

  • Start by ensuring the current human resources team understands what is going on. They need this information as the process moves forward, as they use the information to develop an organizational structure that remains consistent.
  • Next, determine if a new team should be created to handle the human relations aspects of the merger and acquisition. In some cases, it’s best to create a dedicated team for this purpose. At other times, however, companies find it makes more sense to use existing employees to handle the necessary tasks.
  • Choose members to work on this team who are proactive and able to respond quickly to situations. In addition, they must have good communication skills, as they will be sharing information with others throughout the organization. Some companies opt to bring in an outside consultant to work on the project who can act as a guide during the process and train the merger and acquisition team. The knowledge gained from this consultant can then be used by employees when future deals are made.
  • Ensure any documents relevant to the process are stored and processed using a uniform method. Establish a checklist and templates to be used by the team, as this boosts the efficiency of the team. Be sure to share reports on these activities with all team members also, to ensure all are up to date. A secure data room is the ideal solution for streamlinging this process.

The integration process following a merger tends to be complex, as it involves combining and rearranging the organizations to ensure the maximum efficiencies and synergies. Each company in the merger brings its own socio-technical system into the new organization and they must blend seamlessly for the best outcomes. For this reason, be certain to use the above steps with every merger or acquisition, as a failure to do so could lead to less-than-optimal results.

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