In 2013, we saw interesting mergers & acquisitions across multiple industries, ranging from hot tech deals like Yahoo’s $1.1 billion acquisition of Tumblr to the rescue of favorite food brand Twinkies from bankruptcy by Metropolous& Co. and Apollo Global Management. Every day we read about David & Goliath stories and while the potential synergies of the two companies are always laid out, not much is ever said about how to bring these two workforces together for a successful integration. Below are three of my top tips for the people part of M&A success:
1. Move Quickly: Have a 100-Day Plan Ready to Go
Once a merger is announced, employees from both the buyer and the seller naturally expect changes to occur. Moving quickly over the first 100 days will give management the smoothest path for implementing changes. Procrastination will lead to more resistance as employees go back to business as usual. Prepare a written 100-day plan to serve as a working document for the entire team to follow. The plan should be built around two basic questions: (1) Where do we begin? And (2) what do we want the new company to look like after the first 100 days?
2. Use the process called Secondment
Secondment involves taking a few people out of the recently acquired company and placing them in equivalent roles in the buyer’s organization and vice versa. These embedded representatives serve as interpreters, learning about the culture of the new partner and taking their insights back to the home team. The move need not be permanent, but should last for at least six months — enough time to get everyone up to speed and make the adjustments that will realize the maximum synergies. Secondment allows each company to get a sense of what matters most to the employees on both sides of the deal. It also gives each a chance to discover hidden strengths and weaknesses in both cultures that help make the best the new acquisition.
3. Integrate Brands
The brand can be seen as the outward-facing aspect of the company culture and is a promise that customers and employees can depend projected by the company name, logo, and visual imagery. Every acquisition raises the question: What shall we do with the brand? In the case of Twinkies, Metroplous and Apollo chose to keep the iconic brand name. But, sometimes there’s a case for overhauling the brand or exchanging the old brand for owner’s brand as happened when U.S. Airways bought America West.
Make sure the branding plans are shared with the workforce fully so all employees understand the new vision of the company and are excited about the future.
As you plan ahead for 2014, take time to consider the power of acquisition as an avenue for growth. If you choose this path, you can greatly increase your likelihood of success by adopting a comprehensive acquisition strategy, including well-defined steps for effective integration.
David Braun is the founder and CEO of Capstone Strategic www.CapstoneStrategic.coma management consulting firm specializing in corporate growth strategies,and author of the new book, Successful Acquisitions: A Proven Plan for Stategic Growth. He has more than 20 years of experience formulating growth strategies in a wide range of manufacturing and service industries and has completed more than $1 billion in transactions with his firm, Capstone Strategic. He can be reached at dbraun@capstonestrategic.com.
