Integration Planning: The Hidden Ingredient in the Recipe for Successful M&A

Successful M&A is about a lot more than getting the numbers right then throwing two entities together under a single heading. Post-merger integration planning is critical to the long-term success for the new entity. Delays of planning and failures to undertake it are major contributors to merger fails.

As soon as you begin the process, you need to put a dedicated team on the integration team. As you move through the deal and closer to integration, these strategies can help you get the merger right.

Be Mindful of Deal Objectives

Integration should always be carefully and explicitly grounded in the goals of the deal. This sounds obvious, but it’s easy to forget in the haste to bring two companies together. Each deal has its own specific rationale, so it’s critical to think through this ahead of time, then assess how your integration plan can support the objectives of the deal.

For example, if the goal is to build upon a purchased company’s R&D capabilities, you might design integration around R&D and related pursuits, such as sales and back office consolidation. Prioritizing these aspects of the deal ensures the proper allocation of talent and time. The right priority list can also shape the pace of the merger itself, and help with determining when to bring certain aspects of the business together.

Face Culture Issues Early

Even when the mission and values of the two companies appear quite similar, their cultures can be worlds apart. Culture is also about more than just what the companies say they're like or the firs impression they make—such as whether a business is formal or informal, employee-centered or not.

Culture is hard to pin down, but it ultimately includes key management practices and working norms—the things people do without being told. Because these cultural norms are taken for granted, they can feel invisible until there is a cultural clash. It’s helpful to choose the company culture that is best for employees, then lean heavily into it. For example, if one company offers generous paid leave and avoid micromanagement, but still gets good results, it makes sense to transform the new company in that direction.

Shape Quantifiable Performance Goals

Companies can often identify value sources much better than they can translate those sources into quantifiable performance goals. Theory is easy, but execution can prove a lot more challenging. Creating and building upon synergies requires setting a clear baseline and measurable targets that include detailed and milestone-based plans. This is going to require tough decisions and trade-offs, and a willingness to track progress over time. For a lot of companies, getting this right requires significant outside oversight and support, so consider working with an Chicago M&A advisor or integration expert to get it right. Ultimately, you’re merging to improve performance, so this metric is the one that matters most. If you don’t know how to measure it, you don’t really know if your merger is working.