how to keep business momentum going during M&A
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Momentum is net present value of forecasted hope of stakeholders about M&A success with discounting rate of opportunity cost. reduce the integration time, increase the realistic hope and make interesting the future opportunity of stakeholders in comparison of other option accessible to them (reduce opportunity cost).
Move fast
Often during periods of great change, such as a merger or acquisition, businesses can stall as they work through the details and re-strategise. This often involves a drawn out integration process with teams of consultants advising on integration strategy and refreshing corporate goals.
Prioritise IT
According to a recent survey by Deloitte, fewer than 30 per cent of companies actively involve IT in pre-close planning during M&A activity. However, to help ensure the expected benefits of any deal are met, it’s crucial that consideration is given to how IT integration aligns with business activities during the M&A process.
Share the vision
Mergers and acquisitions can leave staff unsettled and unclear on the next steps: where next from here Where do I fit in the big picture It’s therefore critical to unite employees and bring them along on the journey.
Ideally, being able to have a few resources that are SMEs on the acquired side works best, because it allows the other employees to continue their focus on their day to day duties. Of course, most of the time, the reality is that the acquired staff has to perform both functions. When this is the case, you have to be very thoughtful in how you obtain the information you need to ensure you are doing so with the least impact to BAU.
Keeping the employees engaged in their work, and communicating as much as possible to them that their job is safe and their increased performance will help drive the company forward. There is also some things you can put in the terms sheet, like the seller can not do things which inhibit momentum, such as make large investments, fire key employees, etc…
If resources permits, we typically carve out teams to focus on the M&A work and bring contract staff on board to lighten the load of existing employees, especially routine work
I believe that the designation of a cross-functional integration team really helps to focus on the merger’s operational aspects, allowing core teams to remain focused on business-as-usual activities. Nevertheless, I believe it’s important for the acquirer to take into the valuation model a revenue dip in the first 3-6 months post-merger.
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