As one of the best M&A Integration consulting firms, AviatrXX knows in the world of mergers and acquisitions (M&A), signing the deal is just the beginning. The real challenge—and often the determinant of success—lies in the post-merger integration (PMI) phase. Studies consistently show up to 70% of M&A fail to deliver their expected value, with poor integration a primary cause.
Post-merger integration is the complex process of combining two organizations into a single, well-functioning entity. Harmonizing operations, cultures, systems, and processes while maintaining business continuity, all must be skillfully planned and managed to capture anticipated synergies.
Organizational change management (OCM) is perhaps the most vital yet often underestimated component of successful PMI. While operational and technical aspects of integration are crucial, the human element—managed through effective PMI change management—often determines the ultimate success or failure of the merger or acquisition.
According to a 2022 PwC survey of companies completing M&A, change management planning is critical to creating the roadmap for PMI efforts, and successful organizations recognize this.
• More companies are launching organizational change management (OCM) programs earlier in the M&A deal life cycle
• 43% of these companies launch OCM before M&A due diligence
• 71% launched OCM prior to signing the deal
• More than 60% conducted culture assessments during due diligence and made it part of the go/no-go decision
Culture Integration -- A Critical PMI Success Factor
Along with early planning and clear governance, the foundation for successful integration must be laid well before the deal closes and includes a focus on cultural integration.
Culture clash often is the primary reason for merger and acquisition failures; to ensure success, a pre-M&A Cultural Assessment is critical to understanding core values and behavioral norms in both organizations and identifying gaps and differences that could derail the integration if not effectively addressed and managed.
AviatrXX's mergers and acquisitions consulting experts use the cultural assessment to analyze leadership styles and decision-making processes and map informal power structures and influence networks. Other important areas of each company’s culture requiring assessment include:
The results of the cultural assessment are used to create a culture that builds trust and a shared identity among employees from both organizations by adopting the best of both, while preserving distinct cultures, where beneficial.
Change Management’s Role in PMI
The scale and complexity of change during PMI is unprecedented, and the many factors impacting leaders and employees can cause business disruption:
To manage the deluge of change at all organizational levels, our post-merger integration consulting experts use their keen understanding of human behavior and many years of experience to identify and understand the changes each stakeholder group will experience because of the merger or acquisition and their anticipated concerns, with special focus on high-impact areas and potential mitigation strategies.
AviatrXX experts create strong, collaborative partnerships with “local” contacts to gain knowledge of how to appropriately communicate and engage all stakeholders in their “native” language, whether it’s by department, business line, region or country.
As the foundation of the Integration change management efforts, a plan that builds upon itself is developed to prepare all stakeholders for the upcoming changes so the organization can realize synergies, minimize disruption, retain talent and knowledge, align strategic goals, build stakeholder confidence and gain a competitive market edge.
Because today’s businesses use technology to function in every area, technology integration deserves special attention. An essential component of this integration is conducting a comprehensive Systems Inventory and Analysis to develop a plan to ensure all end users can continue their work without business disruptions post the merger or acquisition. The Inventory and Analysis should include:
Changing end users’ normal work routines, systems, applications and/or processes can cause confusion, frustration and potential business disruptions. A User Impact Assessment guards against this by mapping system changes to user groups, identifying training needs and skill gaps, assessing workflow disruptions and planning for productivity impacts during transition.
AviatrXX's PMI organizational change management consultants know establishing an IT Change Support Structure early is vital to prevent disruptions; multiple support venues are optimal to meet the needs of different stakeholder groups in different locations and with differing technology experience and skills.
Swift Decision-Making
The first 100 days are critical as the organizations must:
- Make key decisions quickly, especially regarding leadership positions
- Implement a clear escalation process for issues
- Balance speed with thoughtful consideration
- Maintain documentation of decisions for future reference
Common Pitfalls to Avoid
1. Delayed Integration: Waiting too long to begin integration planning or implementation
2. Undefined Accountability: Lack of clear ownership for integration workstreams
3. Insufficient Resources: Underestimating the time and effort required for integration
4. Poor Synergy Tracking: Failing to establish mechanisms to track and realize synergies
5. Ignoring Cultural Aspects: Focusing solely on operational integration while neglecting cultural integration
Successful post-merger integration requires a delicate balance of speed, precision, and sensitivity to human factors.
At its core, effective change management serves as the bridge between integration planning and successful execution, ensuring the human element of transformation receives the attention it deserves, particularly in the crucial areas of cultural integration and technology adoption.
Because these two areas play a critical role in modern PMI success, organizations that excel in their integration while maintaining a comprehensive change management approach are better positioned to achieve their M&A objectives and create sustainable value.
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