We often write about the importance of a strong exit or acquisition strategy because without one, many transactions fail or don’t reach their potential. We can’t underestimate the process of targeting the right kinds of buyers and negotiating the best possible deal structure for our seller clients. But equally important to the success of the deal is the implementation of a well-managed integration process after the deal closes. Proper integration planning will maximize efficiencies and synergies and set the tone for the future of the business.
On the other hand, a poor integration plan puts the new ownership at risk for loss of personnel and loss of focus that can result in productivity and sales declines, loss of customers and many other issues. The transition period is often a high-anxiety period for everyone involved, but it can be mitigated with a strong integration process.
But what does a strong integration strategy look like? Each will need to be customized to the individual company and its circumstances, but there are common issues that nearly all businesses should be prepared to address.
- Before the Sale – Define any significant issues early, such as staff redundancies, ineffective procedures, or product/service inadequacies.
- Plan Early – Development of a plan before the deal closes is critical. Waiting until new owners or management take over will put you in the undesirable position of playing catch up and can result in seriously negative consequences.
- Make it a Priority – Establishing a dedicated transition team not only demonstrates the importance and commitment from management, but also frees those buried in the daily running of the business to do just that…run the business without interruption.
- Share the Vision -- Make the vision of the business known to those inside and outside of the company. Explain how this change will benefit employees, customers, and the success of the business as a whole.
- Be Transparent – If the organizational structure will change, be very clear about what the changes are and who reports to whom. If there are no significant changes, be clear about that, too. Eliminating fear and uncertainty among employees and customers is critical.
- Address Culture – Make sure everyone is on board with management’s culture expectations, whether they remain the same or will undergo significant changes.
- Communicate Frequently – You can’t over-communicate. The more informed people are about the transition, the less opportunity for speculation or fear-based rumors.
- Stay with It – Continue to monitor and keep a finger on the pulse of the organization. Be prepared to make changes if something isn’t working and communicate those changes.
The common theme throughout the process is open and clear communication with all parties. Whether you have a Human Resources team to manage the integration or you’re doing it on your own, count on the team at O’Keeffe & O’Malley to guide you through this important process. For more information about an Integration Strategy or other aspects of M&A, contact us at 913.648.0185.