When companies choose to work together on a single brand, it can be a very challenging task to bring the best outcome. Unless some strategies are not followed, the merger and acquisition might lead to instabilities and miss commitments. Few pre and post merger activities play an important part in coordination of two completely diversified corporate cultures.
Mergers and acquisition is not easy to step into and you can’t sell a company just by courting an interested buyer with money. There are some non-financial aspects that must be taken into account to make the organizational marriage successful.
If the organizations want to enhance their financial performance and visibility in the market, it is important to pursue some of the goals and targets leading to successful organization unison.
1. Building a Detailed Strategic Plan
Before implementing any plan, it is important to carry out a detailed study of why you are integrating it, what would be possible outcomes, and what are the strategic aims of it. Once you have a clear picture of the basic plan, it will be much simpler for you to deal with the M&A.
2. Be Realistic!
The Global Post-Merger Integration Survey revealed that the current rate of M&A failure is 20% with 65-70% deals not capable of enhancing the value of shareholders. Among many reasons behind the M&A disaster, one of the reasons is the motivation of fat bonuses and adrenaline that help in merger completion but not a successful merger.
3. Control the Back-Office Operations
A new merger greatly depends on the regulation of back office operations and functions. This is not as easy as piling up processes one on the other. It requires shifting an organization over to the other one which is completely new. For instance, one company closes the month-end books in 3 days and the other takes 10, obviously the former one has more to learn.
4. Carry Out a Lot of Communication
Mostly, the M&A deals might end up in duplication or customer retention, thus it needs better strategies in the area of communicating between the organizations. It would be better if you use a diplomatic tone of speech during post deal communications. It will result in holding onto your target company for a longer period.