Key Aspects For Successful Integration of an Acquired Company

Here is a short, introductory article on key aspects for successful merger integration.

Focus on core business

During the integration process, it is important to closely monitor the core business. This includes analyzing leading indicators, such as the sales pipeline and employee retention. For example, the number of calls handled by the call center can be a leading indicator. It is also critical to create continuity in the organization from acquisition to integration.

Communication strategy

During the integration of an acquired company, it is critical to have a communication strategy. This plan should be customized to the needs of various stakeholders, both internal and external. The strategy should reflect the target audience, the complexity of the deal, and the communication channels used to deliver it. It is also necessary to create guidelines that will help avoid the overuse of communication and the creation of a sense of confusion among employees.

To ensure a smooth integration, the lead team should meet with the employees in the acquired company on a regular basis to share updates and identify challenges. The integration lead should empower the team and keep them focused on the future success of the combined company. Weekly meetings are also beneficial to keep everyone informed about progress and identify any changes.

Organizational structure

Organizational structure is one of the most crucial elements to successful integration of an acquired company. A good integration process starts long before the deal is announced. Before closing, acquirers should review the organizational structure of the acquired company and determine how it aligns with the long-term strategic objectives of the new company. They should interview core employees and make preliminary decisions regarding which features are best suited for the combined business.

There are four major types of organizational structures. The first type is a simple structure with no formal systems of division of labor. Another structure is the sole proprietorship, where a single person performs all tasks. Small business owners and professionals often prefer this type of structure.

Avoid or Handle Culture clashes

In the world of globalization and disruptive technology, culture has become more important than ever. As a result, successful integration requires a thorough investigation of the culture of both entities involved. Identifying culture issues before the merger is a vitally important step. The wrong cultural fit can lead to confusion and turf battles that could cascade throughout the organization.

The acquiring company should engage cultural ambassadors early in the merger process. These individuals will be instrumental in helping companies create concrete strategies for successful integration.

Creating continuity from acquisition to integration

Integrating a new business requires coordination across the combined enterprise and supporting the strategic objectives of the new company. Successful integration strategies should provide guiding principles to individual teams so that they can develop functional integration plans that support the acquisition's goals. By following these guidelines, companies can achieve the full value of the new acquisition.

An acquirer should conduct an assessment of the target culture during the due diligence process. The results of this evaluation are used to help managers determine the best timing for different integration activities. For example, if the target company focuses on product launches and revenue recognition, its employees may need support. Integration activities will also depend on the network connectivity between the target company and the acquirer. Employee productivity and customer experience are two important guiding principles for the integration process.

Setting the course of the integration

Setting the course of the integration of an acquired business requires a strategic focus and a plan of action that define the way forward. It must include the role of the leadership and organizational structure, a clear vision of the future, a rational approach to employee retention, and a concrete roadmap for day-to-day operations. Finally, it must empower the integration team with authority and authorization to carry out its tasks.

Early in the integration process, top management must make clear integration decisions, including whether tasks are joint or separate. Not making clear, hard integration decisions can create unnecessary friction and excessive infighting. The literature on mergers of equals demonstrates that it is difficult to implement decisions that are not clearly defined and communicated. By ensuring that key integration decisions are made by top management before the deal closes, the combined company can move forward in a seamless and orderly manner.

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