Post Merger Integration: Can the Marriage Thrive?

bigstock-Fifty-Happy-Years-2703911Post merger integration -- can the marriage thrive?  This question should probably be asked before a deal is consummated.  Just like a smart couple assesses  compatibility before tying the knot, it is possible in my experience to assess compatibility between businesses, pre-deal. So, can better dating lead to a better match and therefore better outcomes? 

Most business leaders would, of course, say yes. But in reality, most leave culture alignment issues and questions "for later". But at what cost? What if there were an efficient technology to measure partnership fitness on this side of the altar? Would it even be utilized?

To hear him tell the story, my client would say he heard the alarms and should have paid attention, but instead he practiced selective listening and outright denial. After all, he needed the IT capabilities of this small technology company, and needed them fast. So he overcame objections, and powered through the negotiation.

It wasn’t until 18 painful and unproductive months later that the real issues made it to the table. One of partners in the acquired company finally admitted: "I wasn't ready for a boss with your leadership style”, “I never expected this level of accountability”, "I never believed in putting business growth ahead of lifestyle”.

It was an ugly break-up waiting to happen.

Eventually, key issues were resolved in a structured alignment process,  but not before irreparable damage was done. So what were some of the critical questions that could have been processed, pre-deal, that were easy to avoid?

Please add your comments. What have been your experiences in post-merger integration? How did the quality of pre-merger discussions create better outcomes?

Questions that you might apply to assess a potential match include:

  • If the CEO of the acquired company is staying, what are they willing and prepared to accept in a boss?
  • What key differences in incentive structure and basic team values exist?
  • For key players who retain a seat at the new leadership table: What levels of accountability are expected? How might they hinder success?

Links to look at include:


Integrating M&A