The Highly Unique Challenges of Post-Merger Integration
Every post-merger integration (PMI) has its own unique challenges, but each PMI situation encounters a few common, very big challenges that threaten the success of the merger or acquisition if not addressed. Specifically, you need to have the following:
- Clarity on the purpose of the transaction
- Clarity on the envisioned end state
- A tangible 100-day plan that clarifies integration activities as well as business-as-usual activities
- Clarity about cultural integration
- Clarity on, “What does this all mean for me?”
Notice the word “clarity”? Clarity is the single most coveted and missing attribute of any merger. And, in the absence of clarity, trouble brews. People fixate on their own needs. Without clear answers to their questions, people make up and spread their own answers. Without a clear plan for the first three months, people start to lose faith in their leaders: “Do they actually know what they’re doing?” “Do they understand the implications of the transaction they’ve just consummated?”
There’s a ton of work post-merger: integrating processes, technologies, systems, teams, leadership and, eventually, culture. Doing so requires intense focus, minimal distraction, and continuity for customers and partners. Lack of clarity leads to diluted focus and lower morale. Many, if not most, mergers fail. And most fail to deliver on the intended benefits.
Our experience is that leaders are able to gain the benefit of the doubt, during a period when doubts are strong and heartfelt, if they, early on and without cessation, focus on engineering clarity—yes, engineering it—by establishing a common language among the people who are newly coming together.
Two or more organizations integrating are like two or more worlds colliding: huge potential for high energy and something new and compelling but, in the absence of proactive efforts to achieve clarity, these are painful, long and drawn-out journeys that leave many people wondering, “Why, and what for?”