By Brett Clawson
Mergers fail because of an array of reasons, but the primary goal is the cultural difference that exists in merged companies. In fact, it is advisable to take time to explain and understand the cultural difference before the merger as a way of preventing failure in the future. Unfortunately, most business owners and managers pay attention to the financial aspect of merging, such that they overlook the importance of the human element. The success of a newly acquired business is primarily based on how well the manager works with other people in the business. These tips will help you to manage an acquisition successfully.
Examine your motives
As a manager or business owner, it is paramount first to understand why you acquired the business. Additionally, you need to understand your expectations for the acquisition. Managers need to understand that it is not that easy to turn something that has been built from the bottom into a different thing especially because you have to change already existing policies and goals.
Notably, mergers affect the existing departments as well as their functions. However, each ministerial function is integral to the success of the acquisition. The first thing you need to do is accept that the merger will affect the functions then take time to understand how the roles have been changed. After that, you can now use the lessons to reduce the effects in various departments. For instance, in the IT department, the merged firms will have to harmonize their systems in time to ensure smooth integration operations. In fact, the integration is essential to the company’s new reputation.
The accounting department will also be affected because there is the need to change accounting policies. In that case, you might be required to outsource or bring in new bookkeeping services for small business to ensure that they match with the new acquisition’s accounting policies. You will also have to decide whether to combine the human resource department with the acquired business.
Get the best leadership team
Integration and compatibility issues must arise when you are merging two companies. Additionally, transition needs strong leadership to ensure its success, and you will be required to choose members of the strong leadership team. Therefore, you must provide that you make the right choices when selecting a leadership team; otherwise, you will not set a model for the direction of the newly acquired business. It is advisable to avoid locking out leadership team members from one side of the deal. After all, they are already familiar with the functions and culture of their respective businesses. Hence, that advantage overshadows hiring new leadership team members.
Get people to talk
You ought to create a forum that brings together people from both sides of the deal to discuss openly and frankly. You need to be clear on the perceived benefits of the merger, such that the two companies learn from each other. After all, each company must have strengths and weaknesses. It is paramount to encourage interaction because it is the only way they can learn from the best of each business.
Every business wants to retain staff members from both companies or to make its employee’s strategic partners. However, that will create tasks redundancy, which is not advisable when you want to cut on costs. The idea here is to cut employees who are not as well-equipped as others because they will not impact the organization in any way. It is advisable to base your choice of the best employees fairly without sidelining.
Share information securely and efficiently
Surprisingly, businesses don’t pay attention to the importance of sending their teams to the physical location of the company to be acquired. Businesses are relying on technology more than the latter without knowing that it has hazards. It is paramount to send your team to the physical location of the seller to analyze their books, at least for security reasons.
Acquiring a business can be tricky, but managing the merged businesses afterwards can be even more difficult. If you follow these tips, your challenges can become less challenging, making a merger operate much more smoothly.
Brett Clawson is a father of two boys and a successful entrepreneur. He has started a couple of small businesses, and when he’s not focusing his time on those, he consults helping other entrepreneurs be successful businessmen. In his free time, he writes about his experience with business and entrepreneurship. Feel free to reach out to him on Twitter: @brettclawson75