Overlooked Challenges and Details in Integrating Two Companies Post-Acquisition

The process of integrating two companies post-acquisition is often fraught with challenges, many of which can be easily overlooked. One of the most overlooked aspects is the people dimension, which can significantly impact the success of the integration.

The Unseen Cultural Dynamics

Companies often emphasize shared values and cultures, but the reality is often different. There are often unwritten rules that govern employee behavior and how performance is rewarded. These can include tangible benefits like salary promotions and bonuses, as well as intangible elements such as respect, power, and access to information. It is crucial to understand these dynamics, as they will play a significant role in how the merged entity operates moving forward.

Leadership and Coordination

Having the right leaders with the appropriate skills to lead the integration is critical. Good leadership ensures that employees adopt the changes and continue to function effectively. The leaders must show that they respect the employees and value their contributions. Otherwise, key employees may feel undervalued and choose to leave, impeding the integration process.

Customer Retention

A common oversight is the potential impact on customer retention. Key customers may be reluctant to switch to the acquiring company if they remain loyal to the target company's employees or leadership team. This can be a significant challenge, especially if the acquisition is publicized, causing a disruption in customer trust and relationships.

Operational and Systemic Challenges

Beyond the people aspect, there are several operational and systemic challenges that are often overlooked:

Job Overlap

One of the most common issues is job overlap across both companies, particularly when it comes to similar titles. While there are instances where there is no overlap, overlaps are more frequent and can create confusion and inefficiencies.

Procedural Uniformity

It is important to have clearly defined procedures to ensure smooth operation after the integration. This includes the analysis of existing systems and procedures to identify potential obstacles. Sometimes, systems that work well for one company do not translate to another, especially when they do not operate on the same popular platforms or software.

The Leadership Mindset

The attitude that "we acquired you, so you listen to us" can be counterproductive. This approach can lead to resistance from employees, causing them to leave. Conversely, the acquiring company often wants to be respected for the value it brings, which necessitates a collaborative and respectful approach.

Miscommunication and Language Barriers

Likewise, a lack of a common language or a difference in communication styles can pose significant challenges. This can lead to misunderstandings and misalignments, particularly if key areas of the business are overlooked.

Conclusion

It is essential for the deal team to include experts who can identify these challenges and plan for them. By addressing these often overlooked details, the integration process can be smoother, and the merged company can achieve its full potential more effectively.