An Eight-Step Process for Ensuring Your Acquisition and the Integration are a Success
An Eight-Step Process for Ensuring Your Acquisition and the Integration are a Success
Twelve months later the headlines read: “Why did the merger of Company X and Y fail so badly when it appeared they had everything going for them?”
And the answer is simple: the companies did not focus on the people side of the transaction. But seasoned professionals know that successful integration requires a sharp focus on human capital and culture.
“Don’t Impose Your Standards to the Absolute. When you buy a company, you are buying a performance record. This is a company that made it the way they were structured and managed, not the way you are. You want to sustain the culture that has achieved that record. Start imposing new people, new requirements, new values, and suddenly you don’t have what you thought you bought.”
From “Why Did You Make that Acquisition,” by James Kristie, Boardroom Briefing: Mergers & Acquisitions published by Directors and Boards Magazine, Fall 2006, original quote from “Seasoned Advice from the Merger Area” by Sam Segnar, Chairman and CEO of InterNorth, 1985.
Far too many companies make the mistake of acquiring another organization, only to attempt immediately to assimilate the new company into the original company’s existing processes, programs, and culture. That is why acquisition integration is often extremely painful and unsuccessful.
With more than 25 years of experience in executive human resources positions and consulting, I have advised dozens of company presidents, CEOs, and board members on strategies and processes that help ensure a successful acquisition or merger. With that experience and research, I have honed an eight-step process that provides proven strategies for successful integration of two disparate organizations.
Step 1: Understand the impact of the acquisition on your business strategy.
Do your homework. Be sure the acquisition you have in mind fits into your business strategy. Be sure it meets your short- and long-term goals and financial objectives. Try not to let the emotion of the situation overtake you and your management team. You need to take a step back and be objective at all times. Take a deep breath. Don’t be afraid to use your board and outside advisors as a sounding board to be sure this acquisition is the right decision for your company. You still have time to ask more questions or to say “no.” Once the deal is signed, it is too late.
Step 2: Determine the cultural fit of the new company.
Culture defines who you are as a business; it defines what you stand for; and it defines how you want to be known by your customers, shareholders, vendors, and employees.
An important question to ask: “Is there a compatible cultural fit between the two organizations?” Most acquisitions fail because the fit isn’t right. You must spend the time understanding the pluses and minuses of both cultures. You must retain the qualities of both cultures that have made each company a success. And be sure to build these successful characteristics into your new company. In addition, use these characteristics as the foundation of your recruitment and retention processes.
Step 3: Appoint an integration team.
Next to communications (Step 4, below), this is the most important step in any acquisition. Be sure that both companies are represented on the team. In this way, a full range of issues surface regarding customers, products, financials, and employees. Together, this team must finalize the business and financial objectives of the acquisition and be held accountable for the success or failure of the integration.
Also, don’t forget you need a integration team leader who will be in charge and accountable for the success of the integration. But you must pick the right person. The leader of your integration team needs to be someone who has had a track record of success, has the time to focus on this integration and nothing else, knows how to make decisions, understands the importance of integration, and is a good communicator and facilitator.
One last thing is that you must also ensure that your integration team has the resources—either internal or external—to achieve their mission. Have you given them a clear directive, have you given them ample time to meet and complete the tasks, have you given them access to everyone necessary?
Step 4: Develop a communications strategy.
Don’t underestimate the amount of communication that must be done when integrating two disparate organizations. Not only are employee and customer communications critical, but don’t forget to keep suppliers, your financial partners (accountants, bankers, et al.), and other key stakeholders up to speed on how the integration might affect them and how it fits into your overall business strategy.
I strongly suggest you establish a separate task force specifically for communicating the integration mission, the process, and your progress. You need to have continuous accurate and frequent communication to all of your audiences. Some methods of delivery include newsletters, hotlines, emails, and FAQs.
Make all managers and supervisors part of the communications process. Given that most employees will go directly to their immediate supervisor with questions, don’t forget to train your managers on the messages you want delivered.
Step 5: Assess the people.
Clearly you’re trying to ensure that you keep in your newly integrated organization the right people who are going to help you be successful and drive your business and company for the long-term. The first step in this process is to assess the human capital. This can be done either formally or informally, but nonetheless, it needs to be done.
It is critically important that you spend the time required to adequately assess the human capital because you need to understand the people who have made the acquired company successful. Again don’t be afraid to spend the time on this step. Do not rush through it. Get the right resources—available both inside and outside your company—to help you assess the talent.
Step 6: Select and retain the right people.
Develop a process for recruiting, selecting, and retaining the talent you need and be sure you communicate that process to both organizations. Based on your assessments in Step 5, you’ll know people’s strengths and their roles in helping the company obtain its strategy. You’ll know whether you have the necessary talent already within the company or you will need to recruit people from the outside. Lastly, don’t forget to develop the right retention programs, which could be a combination of pay, short- and long-term incentives, and future opportunities in the new company.
Step 7: Design and implement the right human capital programs and processes.
With the start of this newly integrated organization, be sure you hone all your key human capital processes to ensure they are supporting your short- and long-term growth and will help drive the success of the business. Some processes that will impact the future include recruiting, retention, performance-management, succession planning, and development programs. You need to understand that you might not be able to do everything day one but you must have a plan that can be put in place over time.
Remember your goals: it’s all about trying to achieve your business strategy and financial objectives and to bring two organizations together as one company, one entity for the future.
Step 8: Meet you business and financial objectives.
You need to hold people accountable for the achievement of the business and integration goals. In Step 1, you determined that the acquisition was right for you and you set specific business goals and financial objectives for the acquisition. Now you need one final step: a process in place to determine if those objectives were achieved. Without achieving these objectives, why should you have bothered with the acquisition in the first place?
An EightStep Process for Ensuring Your Acquisition and the Integration are a Success - To learn more about this author, visit Jim Geier's Website.
Like this article? Share it with your friends
How many times have you read about the perfect marriage of two companies? Analysts, bankers, and competitors all talk about how the merger of Company X and Company Y will be a boom for the market place. Whether they are shareholders, customers, or employees, the buzz in the industry is they will all prosper significantly one way or another and within 12 months.
Twelve months later the headlines read: “Why did the merger of Company X and Y fail so badly when it appeared they had everything going for them?”
And the answer is simple: the companies did not focus on the people side of the transaction. But seasoned professionals know that successful integration requires a sharp focus on human capital and culture.
“Don’t Impose Your Standards to the Absolute. When you buy a company, you are buying a performance record. This is a company that made it the way they were structured and managed, not the way you are. You want to sustain the culture that has achieved that record. Start imposing new people, new requirements, new values, and suddenly you don’t have what you thought you bought.”
From “Why Did You Make that Acquisition,” by James Kristie, Boardroom Briefing: Mergers & Acquisitions published by Directors and Boards Magazine, Fall 2006, original quote from “Seasoned Advice from the Merger Area” by Sam Segnar, Chairman and CEO of InterNorth, 1985.
Far too many companies make the mistake of acquiring another organization, only to attempt immediately to assimilate the new company into the original company’s existing processes, programs, and culture. That is why acquisition integration is often extremely painful and unsuccessful.
With more than 25 years of experience in executive human resources positions and consulting, I have advised dozens of company presidents, CEOs, and board members on strategies and processes that help ensure a successful acquisition or merger. With that experience and research, I have honed an eight-step process that provides proven strategies for successful integration of two disparate organizations.
Step 1: Understand the impact of the acquisition on your business strategy.
Do your homework. Be sure the acquisition you have in mind fits into your business strategy. Be sure it meets your short- and long-term goals and financial objectives. Try not to let the emotion of the situation overtake you and your management team. You need to take a step back and be objective at all times. Take a deep breath. Don’t be afraid to use your board and outside advisors as a sounding board to be sure this acquisition is the right decision for your company. You still have time to ask more questions or to say “no.” Once the deal is signed, it is too late.
Step 2: Determine the cultural fit of the new company.
Culture defines who you are as a business; it defines what you stand for; and it defines how you want to be known by your customers, shareholders, vendors, and employees.
An important question to ask: “Is there a compatible cultural fit between the two organizations?” Most acquisitions fail because the fit isn’t right. You must spend the time understanding the pluses and minuses of both cultures. You must retain the qualities of both cultures that have made each company a success. And be sure to build these successful characteristics into your new company. In addition, use these characteristics as the foundation of your recruitment and retention processes.
Step 3: Appoint an integration team.
Next to communications (Step 4, below), this is the most important step in any acquisition. Be sure that both companies are represented on the team. In this way, a full range of issues surface regarding customers, products, financials, and employees. Together, this team must finalize the business and financial objectives of the acquisition and be held accountable for the success or failure of the integration.
Also, don’t forget you need a integration team leader who will be in charge and accountable for the success of the integration. But you must pick the right person. The leader of your integration team needs to be someone who has had a track record of success, has the time to focus on this integration and nothing else, knows how to make decisions, understands the importance of integration, and is a good communicator and facilitator.
One last thing is that you must also ensure that your integration team has the resources—either internal or external—to achieve their mission. Have you given them a clear directive, have you given them ample time to meet and complete the tasks, have you given them access to everyone necessary?
Step 4: Develop a communications strategy.
Don’t underestimate the amount of communication that must be done when integrating two disparate organizations. Not only are employee and customer communications critical, but don’t forget to keep suppliers, your financial partners (accountants, bankers, et al.), and other key stakeholders up to speed on how the integration might affect them and how it fits into your overall business strategy.
I strongly suggest you establish a separate task force specifically for communicating the integration mission, the process, and your progress. You need to have continuous accurate and frequent communication to all of your audiences. Some methods of delivery include newsletters, hotlines, emails, and FAQs.
Make all managers and supervisors part of the communications process. Given that most employees will go directly to their immediate supervisor with questions, don’t forget to train your managers on the messages you want delivered.
Step 5: Assess the people.
Clearly you’re trying to ensure that you keep in your newly integrated organization the right people who are going to help you be successful and drive your business and company for the long-term. The first step in this process is to assess the human capital. This can be done either formally or informally, but nonetheless, it needs to be done.
It is critically important that you spend the time required to adequately assess the human capital because you need to understand the people who have made the acquired company successful. Again don’t be afraid to spend the time on this step. Do not rush through it. Get the right resources—available both inside and outside your company—to help you assess the talent.
Step 6: Select and retain the right people.
Develop a process for recruiting, selecting, and retaining the talent you need and be sure you communicate that process to both organizations. Based on your assessments in Step 5, you’ll know people’s strengths and their roles in helping the company obtain its strategy. You’ll know whether you have the necessary talent already within the company or you will need to recruit people from the outside. Lastly, don’t forget to develop the right retention programs, which could be a combination of pay, short- and long-term incentives, and future opportunities in the new company.
Step 7: Design and implement the right human capital programs and processes.
With the start of this newly integrated organization, be sure you hone all your key human capital processes to ensure they are supporting your short- and long-term growth and will help drive the success of the business. Some processes that will impact the future include recruiting, retention, performance-management, succession planning, and development programs. You need to understand that you might not be able to do everything day one but you must have a plan that can be put in place over time.
Remember your goals: it’s all about trying to achieve your business strategy and financial objectives and to bring two organizations together as one company, one entity for the future.
Step 8: Meet you business and financial objectives.
You need to hold people accountable for the achievement of the business and integration goals. In Step 1, you determined that the acquisition was right for you and you set specific business goals and financial objectives for the acquisition. Now you need one final step: a process in place to determine if those objectives were achieved. Without achieving these objectives, why should you have bothered with the acquisition in the first place?
An EightStep Process for Ensuring Your Acquisition and the Integration are a Success - To learn more about this author, visit Jim Geier's Website.
Like this article? Share it with your friends
 | |
 |
good
Commented on An EightStep Process for Ensuring Your Acquisition and the Integration are a Success. |
| |
Leave Your Feedback |
 | |
| |||
Dianne CramptonDianne Crampton is an executive leadership coach, team culture consultant, author and president of TIGERS Success Series, Inc. Dianne has been helping CEO's and Executives connect their employees to their core values and goals for over 20 years using the trademarked TIGERS team culture process, which stands for trust, interdependence, genuineness, empathy, risk and success. To download a free white paper on behaviors that build strong teams and behaviors that will predictably tear them down go here. Dianne's contribution to the 2010 Pfeiffer Consulting Journal (an imprint of John Wiley and Sons Publishers) entitled TIGERS Hearted Teams is available in November 2009. Her new book TIGERS Among Us: 5 Winning Business Team Cultures And Why, Three Creeks Publishing will release in March 2010. To receive publishing discounts, subscribe to the free TigerTracks Newsletter here. - Visit Dianne Crampton's Website |
|||
David BarrDavid Barr is the President of Venture Opportunities, Inc. David has been a professional business broker/intermediary since 1980 focusing on General Business Brokerage and Mergers and Acquisitions representing client transaction value from $400,000 to $20,000,000. Mr. Barr has handled the sale of over four hundred and fifty companies. David earned a university degree from the State University of New York majoring in economics and business. David holds the Mergers and Acquisition Master Intermediary and the Certified Business Intermediary designations from the International Business Brokers Association. He is also a Senior Business Analyst and a Texas licensed Real Estate Agent. For more information about David and Venture Opportunities, visit www.bizdealmaker.com. - Visit David Barr's Website |
|||
Kim CastleWith nearly two decades in the advertising and design business, with clients like Domino's Pizza, General Motors, Direct TV, Pedigree, Wolfgang Puck, Higher Octave Music, Hollywood Celebrity Products, Disney, and Paramount, as well as thousands of entrepreneurs around the world define, structure, communicate, and position their business for greater profits, BrandU(R) co-creators Kim Castle and W. Vito Montone discovered that entrepreneurs could experience the same power that big brands command for a fraction of the cost with the world's only process-based results-drive Integral approach to business creation. BrandU(R) is helping entrepreneurs grow with the power of extreme clarity from idea...to brand...to market(TM) and helping one million entrepreneurs become successful and whole so that they can make a difference in the world. Are you one of them? If you want to experience clarity all the way to the bank(TM), get started now at http://www.brandu.com. - Visit Kim Castle's Website |
|||
Dave KurlanDave Kurlan is the founder and CEO of Objective Management Group, Inc., the industry leader in sales assessments and sales force evaluations, and the CEO of David Kurlan & Associates, Inc., a consulting firm specializing in sales force development. Dave has been a top rated speaker at Inc. Magazine's Conference on Growing the Company, the Sales & Marketing Management Conference and the Gazelles Sales & Marketing Summit. He has been featured on radio and TV, including World Business Review with General Norman Schwarzkopf, in Inc. Magazine, Selling Power Magazine, Sales & Marketing Management Magazine and Incentive Magazine. He is the author of Mindless Selling and Baseline Selling – How to Become a Sales Superstar by Using What You Already Know about the Game of Baseball. He created and wrote STAR, a proprietary recruiting process for hiring great salespeople, and he writes Understanding the Sales Force, a popular business Blog and is a contributing author to The Death of 20th Century Selling and 101 Great Ways to Improve Your Life, Volume 2. - Visit Dave Kurlan's Website |
|||
Leanne Hoagland-SmithAre your sales where you want them to be? Will you be one of the few who achieves sales or business success or one of the many who have failed to change? Are you tired of being told you are like everyone else? Then you may find my first book on sales of interest. Be the Red Jacket in the Sea of Gray Suits, The Keys to Unlocking Sales available at Amazon or at http://www.processspecialist.com/red-jacket.htm. This book is a reflection of my no-nonsense approach to improving sales to overall business results. If you are truly committed to making sustainable changes, then I can help you secure a positive return on your investment because I focus on executable solutions not telling you the problems you already know you have. From training to corporate (group) coaching to executive one on one coaching, my approach is to assess, create awareness, build a goal driven action plan and then execute. The bottom line question is "Not do you or your employees know it, but do you or they want to do it?" Please call for a free strategy session at 219.759.5601. - Visit Leanne Hoagland-Smith's Website |
|||
Linda RichardsonLinda Richardson is the Founder and Executive Chairwoman of Richardson, a global sales training and performance improvement company. As a recognized leader in the industry, she has won the coveted Stevie Award for Lifetime Achievement in Sales Excellence and she was identified by Training Industry, Inc. as one of the “Top 20 Most Influential Training Professionals.” Ms. Richardson is credited with the movement to Consultative Selling and is the author of ten books on selling and sales management, including Sales Coaching — Making the Great Leap from Sales Manager to Sales Coach, and Stop Telling, Start Selling. She teaches sales and management at the Wharton Graduate School of the University of Pennsylvania and the Wharton Executive Development Center. Linda is a frequent speaker at industry and client conferences, has been published extensively in industry and training journals, and has been featured in numerous publications, including The Wall Street Journal, Forbes, Nation’s Business, Selling Power, Success, and The Conference Board Magazine. Learn more about Richardson's sales training and performance improvement solutions at http://www.richardson.com web - Visit Linda Richardson's Website |
|||
|
To learn more about the Evan Elite Author Program please contact us. | |||
 | |
|  |
Subscribe to Jim's articles
 | |
|
|  |
 | |
|
| |
 | |||||||
|
 | ||
 |
||
|
||
 |
||
|
| ||
 |
| Have you written articles that would be of value to entrepreneurs? Become an expert on our site by publishing them! Expose yourself to a wide audience, drive more traffic to your website and get more sales! Click Here for details. |
|
|
 |
| Modeling the Masters: Learn the true secrets behind Walt Disney's business success factors & grow your company! Video produced by Phanta Media |
|
|
 |
"Learn straight from Evan how you can Make a Full Time Income (And More) from a Website"
Click Here To Learn More |
|
|
|
|
Get advice & tips from famous business owners, new articles by entrepreneur experts, my latest website updates, & special sneak peaks at what's to come!
|
|
|
 Maximize Trade Shows Increasing Coaching Effectiveness The Idea Compass Internet Marketing Secrets Instant Press Release |
|
 | ||
 |
Top 50 Raising Capital Blogs
Top Blogs To Watch In 2008 | |
 |
Write The PR
Press Release Builder | |
| ||
 | ||||
| ||||
|
| ||||
| ||||
|
|
|
|
|
||||||||||||
|
Email us your ideas on how to make our website more valuable! Thank you Sharon from Toronto Salsa Lessons / Classes for your suggestions to make the newsletter look like the website and profile younger entrepreneurs like Jennifer Lopez and Sean Combs!
|
|
|
