Damage caused by post deal vaccuum
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I once worked for an organization that felt it was OK to not say anything to the acquired organization for one month after the deal was announced. When asked why these leaders thought this was a good idea- they said it was because they wanted to business to run as is. All my research and experience pointed out that going in with integration planned as it relates to people and organization is the best way to proceed. It takes the worry out of the people and allows them to do their job. They did not agree. Have any of you encountered this and how did you deal with it?
I think they are making a big mistake. In most industries there are very few secrets. Those employees know something is going on. Their mind is going to travel to a far worse place than the reality more than likely. If the newco knows that you are looking out for them and holding their hand through the transition that is a much better place to be. I agree with you.
Actually, I have seen many cases like this. The truth is that the buyers rarely implements detailed integration plan or synergy creation initiatives at regional/ local country level while they came up with high level integration strategy at global level. Hence these companies leave the acquired organization as standalone until clear instruction is made from their HQ. This is wasted opportunity as they are losing momentum of the acquisition and wasting time to realize the value from the acquisition.
I can echo the opinions here. I have interviewing for PMI jobs and most of the positions sound as if they are entering as an afterthought. One recruiter told me that the integration had been going on in IT for over a year and they were just now getting around to looking a change management leader…ugh.
I think avoiding communication does not make sense… people find out anyway.
I have never experienced that, however, I have often witnessed acquisition with lack of integration plan and total neglection of the executive team after day 1. I believe this is one of the reason why the majority of acquisition fails to deliver the expected benefits.I’ve never been part of this directly, but have seen the post deal vacuum from afar and within my own company. Ultimately, this is not a plan or strategy that benefits with the acquired or the acquirer. I’ve seen this destroy the value the acquirer had hoped to integrate and use to expand business. The best talent jumped ship in both cases and there was little opportunity to create meaningful synergies in one case. The other case the company that was acquired did maintain business as usual, but took twice as long as to use the acquirer’s resources and cause financial difficulties. You don’t need to plan to fail, you just need to fail to plan.
Post deal vaccum caused anxiety amongst employees and leads to loss of key talents. The uncertainty and lack of communication would also cause the loss of confidence of customers. This would ultimately diminished integration value.
Yes, I’ve encountered this. I addressed it by presenting data and case studies showing the negative impact of delayed communication on employee morale and productivity. We then developed an immediate, transparent communication plan to reassure employees and facilitate a smoother integration process.
Yes, I have made similar experiences when the company I had worked for more than 15 years was subject to a hostile takeover. The integration process started only very slowly, they didn’t realy seem to have a post-merger plan in place and they didn’t talk to us openly. My team kept asking me what was going to happen to the company and our department in particular but I couldn’t give them any answer because I had been left in the dark, too. Consquently one could observe how the team quite quickly lost motivation. My key learning was that it’s of utmost important to communicate the plans for the acquired company as openly and transparently as possible and to start the integration process without any delay directly after closing the deal.
Yes I have seen this happen many times, most times unintentionally. As anyone that’s done any acquisition knows, the momentum of the acquisition shifts dramatically upon the closing, with key members leaving the team. It would take strong leadership and intentions to hold on to the group (or to have a separate team in place from due diligence stage) so that the acquirer can not just continue to follow up on what was identified during the due diligence, but to implement an integration plan to achieve the intended synergies. This takes so much effort and time of dedicated resources from various function lines, so much so that without a clear and intentional leadership, the concerned functions would not care to spend extra time to navigate the PMI efforts including clear communications and strategic decision making/implementation. The bottom line I feel is the thought that the acquired business is already running on its own feet as is, so why bother when we have other things to do. That type of mindset easily creeps in without strong intentional leadership.
Best practices suggest that proactive and transparent communication is generally more effective in managing the integration process.
It helps to:
Reduce uncertainty: employees at the acquired organization may experience anxiety and uncertainty about their future. Early communication helps alleviate some of these concerns and can prevent rumors and misinformation from spreading.
Maintain productivity: clear communication about the integration process and how it will affect them can help employees stay focused and productive.
Foster Trust: being transparent and open builds trust between the acquiring and acquired organizations, which can lead to a smoother integration process.
Facilitate Planning: early engagement allows for better planning and alignment on key integration issues, such as culture, systems, and roles.
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