By Mark Wardell
When it comes down to it, the success of a merger or acquisition is all in the planning. Bringing two distinct companies together means you end up with two of everything: two sets of corporate structures, two sets of company policies and two different and unique ways of doing business. Making the transition seamless requires some detailed planning. In other words, you need to get your aim right before you pull the trigger.
Here’s how.
1. Reevaluate your organizational structure.
Start by taking a careful look at the organizational chart of each company. Does it make sense for the two organizations to be combined as one or will they go on as two separate companies? Whatever you do, it’s best to do it early in the merger with careful consideration of the resources that can now be shared, such as reception, administration and accounting.
2. Develop and articulate new corporate branding.
You’ll want to consider how the existing brands will fit with the long-term marketing goals of the companies. Will both businesses fold into one brand? Which brand? Or will it be a new brand? Is the current brand worth retaining or is it time to develop something new? How you proceed will of course depend upon your unique situation.
For example, a distribution company I’ve been working with recently purchased a similar business in another city. The acquired business, while in a similar industry, has a totally different target market and significant brand value. In this case, it made the most sense for the acquired company to maintain its distinct brand, but to be folded into the organizational chart of the parent company. The parent company took over the finance and administrative responsibilities for both companies, while the acquired company continues to manage its own operations and marketing, with some new supports in place.
3. Consider your people.
We all know a business is only as successful as the people who make up the company. In times of change, it’s more important than ever to consider all of the people affected and to proceed with clear communications. As soon as the news of the M&A is made public, get everyone from both companies together and provide your people with clarity on the news. There is often nervousness around mergers so good communication is crucial at this point.
As you move ahead with restructuring, take the time to investigate how employees at each company feel about the merger and to appropriately mitigate any negative feelings or expectations while doing everything you can to promote the positives (excitement/opportunities) that exist.
Some companies bring in a specialist for this purpose. One of my clients recently hired a Transition Specialist to help with its corporate merger. The job of this particular specialist was to identify the skill sets of key people at the acquired company in order to offer new career paths in the parent company. It worked brilliantly.
4. Redevelop corporate policies.
Last but not least, policies — otherwise known as the lifeblood of business operations. Sounds dramatic but your corporate documents are what keep your business running as efficiently as possible. What systems or policies currently exist (or don’t exist) in the parent and acquired companies? What policies will you need to develop to account for your future direction? Developing an effective set of corporate policies isn’t necessarily fast or simple, but I guarantee it’ll be well worth your time in the long run.
In fact, each of these four steps requires consideration and time on the part of the business owner. However, if you’ve come this far in your M&A you’ll be wise to go the extra distance to ensure success in these critical areas, and in your future enterprise as a whole.
Mark is President & Founder of Wardell Professional Development (www.wardell.biz), an advisory group that helps business owners plan and execute the growth of their companies. The author of seven business books, Mark also writes regularly for several national business publications, including Profit Magazine, the Globe and Mail, and CGA Magazine. Email him at mark@wardell.biz
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