Once both parties have signed on the dotted line, and the newly formed company is about to launch, it’s important that processes are in places, synergies are expected, and staff are engaged to move forward. While there are numerous business aspects that need to be addressed after any merger or acquisition, it is critical to the success of the new company that integration teams are formed to tackle the following three areas.
To ensure effective communication and solid execution, components of each area can be initially rolled out and communicated in a “Town Hall” meeting or through a series of traveling “road shows.” Depending on the size of the merger or acquisition, they may also be addressed by steering committees at the management and field levels.
Sales and Service Delivery. Many companies need good sales people, and good sales people derive much of their income from commissions. Based on this, it is imperative that sales people do not believe they will lose income or incentives as a result of the merger or acquisition. An effective integration will keep the sales force aligned and motivated by clearly outlining new sales plans and coverage, including:
- Expanded service offerings
- New rules of engagement
- New tools and methodologies, such as CRM and deal approval
- The presence of “clearinghouses” and additional resources for strategic deals
- Service delivery (What to focus on? Execution, execution, and execution. A common set of processes, tools, and methodologies is critical.)
Human Resources. Because mergers are almost always about people, a well-thought-out integration plan to be delivered by the human resources team is also essential. This plan should outline:
- Opportunities for advancement. Defining a career path, including education, training, and incentives, can help build employee loyalty.
- New pay structures and benefits. This can be a highly sensitive area, so it’s important not to make assumptions about the pay, benefits, and bonuses that truly motivate staff.
- Employee Value Proposition. This will let employees understand their role in the new company and how their work will be valued. It is a powerful statement that will become part of the branding of the new organization and a key component of talent attraction and retention.
- Transition Incentive Programs. The reality of many M&A deals is that some employees may not survive the merger but they are still vital to the integration process. Adequate compensation can often ensure their buy-in throughout the transition.
- Calendar of upcoming announcements. News and updates about the new company should be conveyed consistently and frequently. It’s important that new leaders do not show up once to be never heard from again. A communications team may need to be formed.
Back office and IT. Finally, with a new company comes new processes and technologies. These aspects of the new company will need to be established and conveyed:
- A plan for proper infrastructure and staff to ensure uninterrupted operational support is a “given” and not a distraction during the integration.
- Transition plans for accounting, payroll, travel, and administrative functions.
- Analysis and assessment of other components of the integration.
- A plan to execute for centralizing administrative functions such as service delivery, dispatch, call scheduling, invoicing, and reporting.
A merger or acquisition is an exciting time to establish a common set of values, tools, processes, and methodologies for customers, employees, and shareholders. Having a plan for successful integration after M&A will make the time not only exciting, but also effective in generating the desired return for stakeholders.
Steve Pomeroy is the founder of Big Change Advisors, a unique M&A consulting firm in Los Angeles that helps businesses achieve big goals while making a big impact on society. To request a free consultation, contact us.