A robust decision-making process is required to make the right decisions to coordinate work streams and establish the foundation for a fully integrated company. The structure should be led by a highly skilled professional who has a solid leadership background and a process, possibly an emerging star within the new organization, or a former leader of one of the acquired companies. The person chosen for this position should be able to commit 90 percent of their time to the task.
A lack of coordination and communication will delay the integration and deny the combined entity of faster financial results. Financial markets anticipate the first signs of value capture. Employees could consider a delay to be an indication that the company is in a state of instability.
In the meantime the core business should remain the top priority. Many acquisitions can create revenue synergies, which require coordination between business units. For example, a consumer products company that is restricted to a certain distribution channel might join with or acquire a company that uses different channels and gain access to untapped consumer segments.
Another risk is that a merger could soak up too much of the company’s attention and energy that can divert managers away from the business. This means that the company is harmed. A merger or acquisition may not address the cultural issues that are crucial for employee engagement. This can result in problems with retention of employees as well as the loss of key customers.
To avoid these risks To avoid these risks, clearly state the financial and non-financial outcomes that are expected from the deal, and when. Then, delegate these objectives to the individual integration taskforces to drive momentum and ensure that one company is integrated according to schedule.
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