June 10, 2019

Integration: 7 Key Takeaways

Getting a deal closed is usually the easy part – at least compared to the post-closing integration process.  This Spencer Stuart memo looks at the lessons to be learned from companies that successfully integrated acquired businesses & those that did not.  It identifies the following 7 key takeaways for successful M&A integration:

– Tackle the tough leadership decisions early.
– Plan for the team you need now AND 18 months from now.
– Articulate a value proposition for top performers
– Build trust and reduce fear through clarity.
– Define how the organizations are alike — and different.
– Don’t delegate your responsibility to model the new company culture.
– Manage your energy.

The memo goes into detail on each of the 7 takeaways identified above. Here’s an excerpt from the discussion about leadership decisions:

Most organizations use a very narrow definition of leadership when selecting top leaders for the merger. They often focus on individuals’ depth of knowledge or experience in a subject area and typically evaluate executives on their track record in their current or most recent positions. They may weight an attractive personality trait such as charisma or energy heavily.

But the knowledge and skills that propel executives in a previous role (usually in a more stable environment) are not good predictors of their ability to excel in a merger context. As a result, when organizations focus on these strengths rather than the leadership attributes that are essential to success in a merger, they can make the mistake of placing a strong performer in a position beyond their capabilities.

John Jenkins