The Keys to Successful Post-Merger Integrations

Mergers and acquisitions (M&A) bring together previously separate companies into a new combined entity. However, the hard work begins post-deal with integrating the operations, systems, policies, teams and cultures to deliver on anticipated synergies. As many as 60% of corporate mergers fail to reach desired financial and strategic targets, often because of post-merger integration breakdowns. 


This article spotlights best practices around goal-setting, culture integration, decision-making pacing, governance, and priority challenge mitigation. Thoughtfully considering then executing on these acquisition integration elements can set up merged companies for capturing planned-for benefits and value creation versus experiencing disrupted momentum and diminished returns. 


Keys to Successful Integrations


  1. Set  Clear Goals and Metrics


Here are the best course of action you can take with post-merger integrations:


When embarking on merger integration, clearly defining desired outcomes and metrics for success is crucial. What specifically is the integration aiming to achieve? Common goal examples include:

  • Cost reduction targets through consolidated operations and reduced redundancies
  • Increased revenues through expanded product lines or customer bases
  • Improved market share via combined offerings and networks

Whatever the objectives-outlined quantitatively- they should directly tie to the strategic rationale behind the acquisition. Goal alignment across all integration teams and functions is vital for coordinated efforts. 

Rigorous tracking mechanisms must then be implemented to monitor advancement towards the stated goals. Key performance indicators need to be established and routinely assessed. For example, for a goal around achieving certain cost savings, regular financial impact analyses would need to occur with clear reporting to leadership. Goal progress transparency keeps all stakeholders focused and accountable. Ongoing, honest goal measurement also flags any objectives at risk, allowing course corrections when required.

  1. Prioritize Cultural Integration


Company culture compatibility and strong working relationships do not happen by chance during complex mergers. Yet, they remain integral to integration success. Proactive efforts must focus on bridging cultural divides and enabling collaborative ways of working.


Specifically, conduct cultural assessments early on to surface and understand similarities and differences between the organizations. Identify potential friction points or disconnects stemming from varied backgrounds, perspectives, values, and norms  that could hamper integration. Raise awareness of these issues through training and address them directly via forums that bring teams together.

Foster connections between merged staff through cross-functional projects, shared social events, and neutral physical spaces. Bring in mediators if needed to work through tensions. Leadership should role model open, constructive cross-cultural dealings.


Communication barriers also require mitigation via translation services, clear processes, integrated systems, and simple standardized language. Ensure messaging penetrates organizational silos.


  1. Move Quickly on Key Decisions

Merger integrations inherently create uncertainties – new reporting lines, multiple systems, physical moves, job losses. While some flux may be inevitable, ambiguity around key decisions can paralyze operations, productivity, and morale. As feasible, critical calls should be made decisively and implemented quickly.


For example, firm up executive leadership appointments and role adjustments fast, even if interim. Make timely determinations on central corporate HQ, manufacturing sites, and office closures or consolidations. Announce major pending layoffs respectfully but without delay. 


Certainly, consult stakeholders and conduct needed diligence around pivotal moves while lasting ripple effects. But extensive analysis paralysis is unhelpful amidst disruption. Even imperfect or temporary decisions provide direction. 


With core structural and directional clarity established upfront, underlying merger work can progress concertedly. Meanwhile, breathing space is created for deeper explorations around secondary areas of ambiguity.


Keeping urgency around resolving primary strategic unknowns mitigates the human toll of suspense and better contains operational instability. With the big pieces settled, integration leaders can then refocus bandwidth on intricate operational alignment of policies, tools, and workflows.


  1. Invest in Integration Management

The stakes for properly integrating major mergers could not be higher – failing to capture anticipated value or losing momentum can severely impact growth and profit trajectories. As such, integration oversight should not be seen as an add-on duty. The resources and focus required warrant designated leadership and resourcing.

Specifically, appoint an experienced Integration Leader to steer all coordination efforts full time. Supplement with dedicated team members across overarching integration work streams – people & culture, process & operations, systems & tools etc. Also embed skilled integrators within each business division impacted.

This cross-functional, focused integration personnel should be freed from competing responsibilities through merger completion. Their charter is shepherding change by bridging silos, clearing obstacles, and providing direction in service of the defined integration goals.

While relying on existing overburdened members may seem cost-efficient, the lack of unencumbered leadership and champion resources does major integrations a disservice. Making structural, operational, and cultural shifts stick requires concentrated know-how and effort. Investing in dedicated, business-focused integration capacity upfront provides the governance needed to navigate obstacles and drive optimal coordination.

Top Challenges and How to Address Them

While proactive integration planning and oversight help steer progress, certain inherent problems will likely surface and require tailored responses including:

  1. First, merged companies face magnified talent retention risks, especially regarding high performers. Beyond financial incentives, provide ample growth opportunities, flexibility, and transparent career paths to stem churn. Listen to concerns and redeploy those struggling with change.
  2. Second, consolidating tools, policies and systems presents entanglements. Conduct compatibility assessments and prioritize unifications starting with customer/revenue-impacting areas. Accept transitional solutions allowing localized flexibility while pursuing longer-term platform consolidation.
  3. Finally, business momentum maintenance is critical yet tough amid disruptions. Set distinct ‘business as usual’ objectives for all groups and collect consistent activity metrics to spot lags. Define and quantify distraction thresholds then redirect resources before critical impacts. Accept that some temporary decline is expected before turning the corner.


In conclusion, while merger integrations present immense complexity, by focusing intently on cultural integration, setting clear measurable goals, moving swiftly on pivotal decisions, properly resourcing efforts, and proactively mitigating high-risk areas, organizations can vastly improve their chances of capturing anticipated synergies and minimizing business disruptions. Executed thoughtfully, an initial period of transformation sets the stage for long-term growth and success. Companies would do well to carefully consider these integration best practices when contemplating and undertaking M&A activity.


For a deeper discussion on applying these concepts to your specific merger situation, reach out to our team of experienced integration advisors.

Hero Technologies Inc. (OTCQB-HENC) is a publicly-traded independent sponsor with a strategic niche in technology, hardware manufacturing, financial services, business services, telecom, and transportation.

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