Reasons Why Acquisitions Fail – 4. Flawed Integration Management


In my posting on 17 March 2013 I said that I would review and comment on Denzil Rankine’s 20 reasons why Acquisitions Fail

Rankine says that the reasons for failure fall sequentially into the five phases of an acquisition:

  1. Flawed Business Logic
  2. Flawed Understanding of the New Business
  3. Flawed Deal Management
  4. Flawed Integration Management
  5. Flawed Corporate Development

This article examines the fourth category in the list.

4. Flawed integration management

You have completed the deal, struck a fair price and your team is on-site ready to start the integration. What happens next? How will you integrate the new firm and deliver the expected results? Your integration team should have already designed the integration strategy and build the tactical plan…

1. What is you communication strategy?

Have you prepared a communication plan? What is going to be said and to whom? By whom, and when? During and immediately after an acquisition stress levels are high and key messages are often misheard and misinterpreted resulting in rumour and unrest. It is essential that your communications plan delivers clear, frequent and consistent messages.  Your messaging should be repeated time and time again to ensure they are heard by all.

2. Clarity of leadership

Clear, strong leadership is mandatory after an acquisition. Both sides must have clarity on who will lead going forward and that leader must be assured at the helm. Key roles in the new organization Jobs should be allocated based of merit and ability.

3. Realistic implementation and change management

The integration plan must define how the change is to be implemented. Un unplanned integration leads to fundamental mistakes, dithering and failure to make realistic changes in a reasonable timeframe.

Everyone expects change during the post acquisition integration phase. Uncertainty creates unrest. Make changes as quickly as possible and when you are finished, tell your new organization that there will be no further changes. Make the essential and most value-enhancing changes first. It is better to act quickly and make a few mistakes rather than show uncertainty and create continued unrest in the organisation.

4. Do not underestimate the size of the task

Integration does not happen by itself. Make sure your team is well prepared, professionally managed and controlled. The keys are good planning and strong, charismatic leadership.

Remember, strong leadership, strong planning and speed of execution are the key to good integration.

About Peter Borner

Peter is an entrepreneur and successful business leader. Currently leading a consultancy firm specialising in technical diligence for M&A and advising global firms on IT consolidation and migration to consumption based costing through the use of Cloud Technologies.

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