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6 Critical Tips for Post Merger Integration

Post Merger Integration

Achieving the expected financial outcomes while maintaining and developing the acquired capabilities is challenging in the post-merger integration process. 

And when the changes begin, businesses risk losing their best employees.

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To materialize the potential synergies and efficiency, set up the integration’s direction upfront, open two-way communication lines, and manage the integration separate from the day-to-day business operations. 

Most importantly, focus on driving value from the deal soon after Day 1.

If you’re looking for best practices for a successful post-merger integration, read on!

This article has important PMI tips for CEOs.

Let’s dive in.

1. Set the direction of the integration early and upfront

Successful post-merger integration depends on the solid foundation built before the merger because all the planning needs to start pre-merger. Additionally, a well-laid PMI plan ensures that the integration happens quickly.

A solid foundation typically includes the business processes, configuration, and systems’ application data.

So, the PMI lead, functional team leads, the team members, and the executives need to know why the businesses are doing the merger to get everyone in the same thought that “we’re in this together.”

Getting all the stakeholders in the same boat depends on the activities done before closing the deal.

Here are our tips for setting the direction of a PMI

  • Clearly define the objectives of the merger, the philosophy “narrative,” and the PMI plan. Then communicate these to all the affected stakeholders to achieve the desired post-merger synchronization. 

Departments that do silo tasks without understanding the complete picture may prioritize the wrong tasks, assign resources to the wrong task, or even work on the wrong project. 

It results in integration delay, which is why some mergers fail to extract the merger’s value. 

  • Design a clear picture of the future state operations of the combined business during the due diligence phase. The end state will guide all the actions post-merger.
  • Articulate the right PMI plan with specific tasks and timing. The right plan is easily explained and communicated to all the stakeholders.
  • Create a roadmap that clearly defines the specific outcomes (results) that must happen in every milestone with clear financial or other deliverables. The focus is not on the steps but rather on the end goals.
  • Based on the due diligence data, define ballpark figures of the potential cost, revenue, and financial synergies. 

The figures will depend on your business and the target business regarding existing processes, proficiencies, and capabilities. You may also do a SWOT analysis against the industry’s best practices to determine capabilities.

Have a proforma on the expected financial situation of the organization. It will become the business case that the integration management office (IMO) will test in the first 100 days.

  • Articulate the key performance indicators (success factors) that will mark the integration and the combined organization. 

These could be:

  • The organization’s stability
  • Employee retention and wellbeing
  • Maintaining customer focus
  • Profitability
  • Integrating the businesses’ cultures
  • Maintaining and increasing value
  • Communicate everyone’s role and responsibilities and make sure they understand these in addition to the integration’s mission.
  • Address concerns about job security on the get-go. So you’ll need to identify the best performers you want to keep (these are usually the first to leave). Then make sure that they know how you value them and their future career path after the integration. 
  • Get all the key stakeholders excited about the integration. You can only do this if you involve them all through the integration planning. You could also throw a kick-off party.
  • Identify key risks and develop mitigation strategies. For example, the IMO may realize that the integration could distract resources from the daily operations of the two businesses. In that case, they’ll have to communicate how the functional teams should prioritize duties.

Set up the governance aligned around the goals of the integration 

At the beginning of the integration, assign management roles to clarify who the people should follow and specify who’s accountable for what. Selecting the leaders early also prevents the uncertainty of mergers and acquisitions.

The most important element of the PMI is leadership. You need a disciplined, focused, organized, and decisive PMI leader. One with the ability to make decisions and have people follow him/her through the challenging time.

But because of politics, you can’t pick a PMI leader from either company. It’ll be challenging to get everyone on board if you do so. 

Instead, you may hire a PMI consultant who will focus on the core business operations and a transaction/private equity firm to handle the financial and legal matters.

2.  Have two-way communication systems with the internal and external stakeholders

Consistent and clear communication before, during and after the post-merger integration maintains stability. So, the best practise is to set up a dedicated communications team. And communicate a lot.

Mckinsey clearly depicts what the level of communication would look like throughout the integration (image below).  Besides the announcement day, there’s a spike in Day 1 and never-ending consistency after the deal is closed.


On Day 1, redeployed employees need to know their roles and responsibilities. They want to know who their new bosses are and the new business processes. 

And son after close, you need to gather feedback as you test and refine the business case.

Besides announcements and formal messages, you also need to keep the employees motivated and energized.

Read through these tips for effective post-merger communication

  • Besides the general story, address the questions that directly affect the stakeholders personally. For example, is there a new boss to report to?
  • Use all available channels to address all the key stakeholders and ensure that the message is reinforced. Besides project management tools, you could use social media to reach customers and employees.
  • Recruit ‘influencers” in the organization to gather feedback and even communicate it. Well-respected employees could easily get raw feedback from the employees and the rumors of, for example, key personnel thinking of leaving the organization.
  • Use feedback collection tools like surveys, focus groups, town halls, email, etc., to get feedback on the employees’ states. After receiving this feedback, the communication and IMO will analyze and act on it. 
  • Supervisors should have honest conversations with the employees to minimize friction. They also need to be more personable, inviting, and responsive.

Need more information on leadership?

Check out the role that leadership plays in organizational change.

3. Manage the integration separately from the day-to-day running of the organization

You may consider outsourcing the back-office integration so that your employees focus on their jobs, and at the same time, you’ll give full focus on the integration. Doing this will allow the business to derive the value of the deal.

Though outsourcing integration will require a cash outlay, your business will realize the following benefits, which offset the initial costs.

Benefits of outsourcing integration

  • You’ll leverage the third party’s expertise in integration. Though your internal teams can achieve some synergies, leaving cash on the table is easy because of unrealized opportunities. 

A PMI expert is more experienced in realizing synergies and responding to the inevitable obstacles that will come up.

  • The organization will give the integration the laser focus it demands by hiring someone who is managing the integration full-time. 
  • Avoid prolonging the integration, which may lead to unrealized synergies.
  • A third party will ask the tough questions that people are afraid to ask. 
  • The expert will help determine realistic timelines for realizing synergies and identify risks and dis-synergies.

If the organization chooses to hire an integration director, they should be involved right from the beginning of the deal. 

And you should support them to be the best set of eyes and ears for the integration.

How to support the integration manager

  • Trust the manager and give them access to executive-level information.
  • The integration manager should have the authority to lead discussions and enforce decision-making.
  • He/she should have the authority to assemble resources as need be. The CEO can clarify that the integration manager is authorized and capable of making critical decisions in the IMO.
  • The CEO can encourage the integration team to support the manager’s decisions. 

4. Focus on driving value from the deal 

At the end of the first 100 days, the business should operate effectively. The priority here is achieving the synergies. And the driving factors are the key performance indicators.

Here are some high-level milestones to drive value from the integration

Between day 1- day 30

  • Complete employee onboarding and training
  • Send out the first post-onboard employee survey
  • Send out the first post-close customer survey
  • Conduct your first Record to report (R2R) cycle
  • Kick off the sales transition calls

Between day 31 and day 60

  • Conduct the second R2R cycle
  • Analyze the post-close customer survey
  • Analyze the post-onboard employee survey
  • Have the most-promising attendees in the sales transition calls

Between day 61 to day 100

  • Conduct the third R2R cycle
  • Send out the Day 100 post-close customer survey
  • Send out the Day 100 post-onboard employee survey
  • Finish migrating data from all the retiring systems

Check out these important tips for deriving value from the merger

  • Focus on the most promising customers and reallocate resources to profitable accounts
  • You may major defer changes in support functions like sales to avoid disrupting income flow
  • Focus on winning big transactions that will act as “proof of concept” to drive momentum and enthusiasm.
  • Focus on selling easy-to-sell products from both companies.
  • Constantly revisit the explicitly defined cost and revenue synergy targets, refine them and track against them.
  • Remove redundancies to maximize cost synergies.
  • Involve customers in the post-merger integration process to retain them
  • The businesses may operate separately until all systems are ready to achieve the synergies fast.

Once you know where the big value areas are, you can then organize the PMI teams to mirror those value drivers.

5. Spend time and effort in building the organization

The new organization should be built from a people, process, and technology standpoint. Overall focus on the customer and employee experience. Then use technology to enable an efficient business architecture.

The organization will not be efficient if you fail to integrate the culture, maximize cost synergies, and retain customer value.

So, the organization needs to allocate time and resources for post-merger culture integration.

Our tips for building the organization post-merger

  • Track and report synergies daily. It would be nice to have a dashboard that shows you where the organization is every day.
  • Have weekly synergy meetings and establish a rhythm of regular reviews of the progress of each key workstream
  • Select, retain and develop the best talent, i.e., people who do the best job while supporting the organization’s mission and culture.
  • Clearly define the desired behavior and the key role models (ideally, the leaders should be the role models). For those who achieve the desired behavior, recognize their efforts with incentives (monetary and non-monetary).

The Human Resource department will play a key role in cultural integration. The gap between the starting point and the target culture helps identify the practical things to do.

  • Finally, overcommunicate and keep the feedback lines open.

6. Support employees to create value from the change

Change management is important to align and motivate people to deliver the integration’s objectives after day 100. But integrations might fall short of expectations with a fragmented approach, lacking concrete and actionable items, or addressing some but not all drivers.

Without clearly defined processes and effective communication, speculation and rumors could result in high turnover. So, HR might be the most fragile function in an integration. 

Additionally, frustration with the new systems (due to limited training) and technology resistance could make your business lose high-value employees.

The first step, which should happen pre-merger, is creating the change management plan and integrating it into the merger process. You may also consider having the change management leader instead of leaving it all to HR.

Check out these change management tips after closing the merger

  • Deploy resources for employee training. Identify all the areas that will change (and need integration training), then develop the programs to train the affected employees.
  • Have a clearly defined future state to put an end to speculation. And have a process in place to address any concerns among your teams.
  • Assign your functional teams their responsibilities unambiguously. Let them know what decisions they own and those they’ll need to share with other leaders.
  • Clearly define the new policies and processes that will guide the combined company’s new way of doing business. Then communicate these to the employees to ensure that everyone understands fully.
  • Encourage two-way communication to keep up with how the changes affect the employees and determine the best corrective actions.
  • Track the progress of executing the change management program. For example, pulse surveys and one-on-one interviews can help gather employees’ views on the changes. 

But to track progress properly, use organizational-health indicators like absenteeism, attrition, inbound job applications, and recruiting referrals. 

  • Organize town hall meetings 6 months after closing to discuss unresolved issues.
  • Have an intranet site to share announcements and FAQs and gather employee feedback.
  • Send out a 1-year employee survey to determine the success of the merger. Then discuss any lessons and the way forward. And document these (on the intranet), including best practices. 
  • Remember to celebrate successes.

Find out more ways to involve employees in the change management plan in this guide.

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