8 Simple Merger Tips (Simple to say - tougher to do)
My tips for integration:
1 - Have a rolling 90 day plan. The first 30 days should be "listen and learn". Regardless of what due diligence is done prior to the merger, there is still lots to learn. Good planning leads to good execution.
2 - Lock down all spending. There are often pent up expense requests that are just waiting to happen. Many times they are not actually needed despite the very convincing arguments that they are needed. By not approving any expenses, the real ones come to surface over time.
This means pay freeze too.
In particular, people and companies often think "new owner has money" so we can make up for all those years where we underpaid someone. Or do those things we have been putting off.
3 - Choose the best people. This one sounds obvious but is actually tough to do. Just because someone works for the acquirer does not mean they are better than the person in the acquired company. If there is a rationalization to be done - choose the best credit manager, the best AR clerk, the best warehouse manager etc. And try hard to avoid the "familiarity" trap of thinking the person you or your team know best is the best person.
4 - Cancel your holidays, trips, outside meetings etc. The leaders particularly need to have great presence in the short term. Intense time is needed to not only learn but to get known by staff.
Plan on working longer days than usual for a few weeks.
5 - Choose the highest common denominator or at least some fair compromise. There is great temptation to choose the lowest common denominator in a merger. It is the path of least resistance but also the path to increased cost and decreased efficiency. For example, if the acquired company gives 3 weeks holidays and the acquirer gives 2, consider changing all to 2 or grandfathering in the 3 week but not adding new people to it. This requires finesse.
There are lots of minor examples around dental coverage, free coffee, bonuses, working hours etc. Usually one company is not the most expensive option so choosing a fair blend from both makes sense. But changes need to be socialized and "sold" to people.
It is tough but necessary in competitive businesses to not always choose the most expensive option even if it is more popular.
6 - Integrate physically as soon as possible - even if this means vacant space in one location. Nothing brings a team together like being in the same office and nothing divides like being separate. In many cases, I would buy a business in a different location where it was not practical to do this. In those cases, I would still often find a few people who would move.
7 - Have a communication plan. Say it, email it, say it again, mail it, put it on the web site, press release it, post it. The customers, suppliers and staff all become "loose" in a merger. They all consider what they will do and see risk. This can cause them to look for alternatives.
Uncertainty kills. Good communication can create certainty.
8 - Create good habits from the start. It is very difficult if someone has been in the company for a few months and then you tell them they need to track their hours or do weekly reports (I am a big advocate of roll up weekly reports). Same thing with hours or breaks. Have zero tolerance early. Set the tone.
All of these tips require high discipline. Good merger depends on it.