Merger Integration
Integrating acquisitions is a daunting challenge with typically only 30% actually achieving the synergies that justified the price paid. In fact, few companies ever get beyond the low-hanging fruit of merging some systems, laying off obviously redundant personnel, and, if they are really good, getting some procurement synergies. Doing even this much is difficult, which is why 70% of all mergers fail.EHS has worked with companies to get both these early, easier-to-get synergies and, more important, the really tough ones like creating a single operating discipline, sharing customer information to create cross-selling opportunities, and rationalizing spending and leveraging volume across the organization. Our experience tells us that some companies are okay at getting at the initial opportunities, but far fewer are successful at achieving hard-to-reach improvements. Even if your company has a long history of "successfully" integrating acquisitions, you will find our process will uncover more opportunity for getting the full value out of your acquisitions.
Where does your company rate on some of the practices below?
| Common Practices | Unparalleled Practices |
|---|---|
| Use first year to focus on stabilizing the organization | Use first year to drive dramatic change throughout the combined organization |
| Design the organization first and redesign processes later when the organization has stabilized | Redesign the work and processes first, and let the organization design flow logically from the new, better work processes |
| Primary focus on efficiency | Equal focus on growth and efficiency to leverage new capabilities, customers, skills, and scale |
| Executive teamwork develops over an extended period of time | Use the integration to force teamwork at all levels including the top |
| Communications focused on the integration project | Broad communications aimed at building a unified culture where the integration project is only a small step |
| People decisions made quickly based on who is "known" | Disciplined talent review process to ensure the best talent across the enterprise is identified and deployed in the most effective positions |
| Procurement efficiencies are identified where additional spending from the acquired company can easily be incorporated into existing contracts of the acquirer or vice versa | Scrutinize all opportunities to include things such as renegotiating contracts based on new volumes and mining both organizations for ideas on reducing consumption |
| Set the bar low to ensure meeting street expectations | Set the bar high to inspire great accomplishments |