Most people in full time employment spend seven to nine hours a day actually working; individuals with senior responsibilities, those
with irregular work schedules and busy entrepreneurs may find themselves working longer days (and nights!), and for them 12 hour days
might not be uncommon, especially in the rush to meet deadlines. So why not push the limit a little further and adopt the 18 hour
working day? Sound ridiculous? You would think so, and yet this is the implicit assumption that many companies make on their full
time staff when they embark on a post merger integration (PMI) without the proper resources.
Challenging times
Surprisingly,
most companies contemplating a merger or a major acquisition seriously underestimate the challenge of running two companies rather
than one, particularly as the two companies will in many cases be destabilised by the prospect of the forthcoming integration. The
size of the challenge rises further when, in addition to maintaining the commercial activity to reach their financial targets, the
two companies will also have the task of remodelling their organisation and redefining their processes and ways of working to become
one business. In doing so, they will need to overcome resistance to change, and drive their transformation towards that defined end-state.
Seen
from that angle, delivering a successful PMI is probably three times as complex as running one business. Succeeding in that endeavour
would quite possibly require those individuals deeply involved in running the business and the integration to work 18 hour days, perhaps
coming in at 6am and not stopping till midnight. The temptation will therefore be to cut corners and do without a number of activities
which are perceived to be non-essential or non-urgent – this can only lead to a half-baked integration and/or a decline in business
performance, both of which fall short of the promise that was made to shareholders when they gave their approval to the merger or
acquisition.
Resource required
Quite logically, the only alternative to working 18 hour days is to increase resources, at least
for part of the integration journey until the business has returned to some level of normality; the only question being “how much”
and “what type of resource”.
Abundant advice is available regarding the amount of resource required to drive a PMI to a successful
completion. Sadly, much of this advice is dismissed because those who formulate the recommendations (typically consulting practices
and large accounting firms) are also the potential providers of such resources, and consequently their projections are all too often
perceived as overinflated in an attempt to maximise billings. At the other end of the spectrum, this leads a number of companies to
believe they can manage their integration by themselves, and decide they will only call in additional resources if and when they begin
to struggle. This is a recipe for a double failure, because by then the company’s commercial performance will have begun to slip below
target, and reviving the business transformation programme will greatly extend the integration’s time-line as well as its cost.
Call
in the experts
Complex PMIs call for the input of functional experts in a number of areas such as organisation design, pensions,
technical infrastructure, manufacturing footprint, logistics etc. Whilst external consultants can define the “what” and the “how”,
the accountability for delivery and a successful outcome rests with the company’s management and employees. We all know that change
must be driven from within, by individuals who belong to the company or who act as such. So what’s the solution? Interims managers
and executives ideally close the gap in internal resources, either by injecting expert functional knowledge within the company,
providing the benefit of repeated PMI experience which most companies lack, or by backfilling the positions of managers who are seconded
to the integration programme. The latter is crucially important as it allows the company to retain valuable knowledge when their managers
return to daily business after completing the integration.
PMIs require a great deal of cross-functional work: this is an excellent
and rather unique development opportunity, giving the individuals who take part in the integration programme a sound understanding
of their entire business, well beyond the confines of their respective functional areas, thereby allowing them to provide a valuable
contribution to the company in the future.
A number of studies over the past 30 years have shown that a majority of mergers and integrations
fail to deliver the benefits the shareholders had been promised. And yet, if executed correctly with the right resources, a post merger
integration can indeed result in a better business, better people and much less need for those 18 hour days!