7 insider’s tips for managing a successful merger
After 11 years in business Samantha Sida merged her company with another. Here, she gives the inside track on how to deal with the process
There’s no doubt about it; every business merger is different and each one has its own set of challenges.
I co-founded outdoor advertising company Limited Space 12 years ago and last year merged the business with Integrated Signage Solutions (ISS), which supplies the retail and outdoor space with digital screen technology, to form Limited Space Media Group.
One year on, these are my top tips from inside a merger – and how to manage the process as an art, rather than a science.
1. Examine your motives for merging your business
Be honest with yourself about it being the right time to look at a merger. Many company owners, especially if they have nurtured a business from the start, may see the potential for the business but may overlook how their role in the new organisation will change.
Be clear with yourself about why you want to merge and what you expect (and need) to get out of the union. It is essential to understand the sensitivity of converting what you originally created into a whole new entity.
2. Learn how to let go of the ‘old’ company
This can be especially difficult for small businesses. You will no longer be the sole owner, so giving up full automony over decision-making can be a wrench, especially if you’ve captained your ship for a long time. Do the following:
- Define your new role – as well as the executive team’s – early so everyone is clear what needs to be done. It will mitigate any teething problems.
- Clearly delineate responsibilities and the new command structure. Develop an internal working team made up of representatives from finance, sales and marketing, and operations to facilitate the integration of the two entities. There must be cohesive thinking and constant communication among team members to ensure that ‘business as usual’ is upheld as much as possible.
- Consider responses. It’s also necessary to bear in mind that decisions will likely now take more time as there will be a committee involved for major moves – so you need to have your reasons to hand to be able to explain why you consider a course of action to be right or wrong.
3. Set realistic expectations
Successful integration needs to be at the centre of the merger. Many deals are set up to fail where individuals are motivated by the completion date and hefty bonuses rather than careful integration of two businesses from the ground up.
While the organisational logistics are being ironed out, it’s easy to fall into the pitfalls of managing that process, rather than looking at the business at the same time.
For example, remember to set the expectations of staff about the process, with insights and as much clarity as you can about when decisions affecting their lives will be made, as well as why some questions must remain unanswered for a time.
4. Prepare your employees for change
Don’t forget that long-standing staff will have followed your organisation on its journey and helped to grow the business into what it is. Their loyalty cannot be underestimated, and has to be respected. Continue to share this journey with them. Be mindful that many mergers fail due to the inability of the two organisations to integrate at a cultural level.
People bring their own organisation’s cultures to the negotiating table and expect others to automatically share their point of view, not recognising that the other party will have different beliefs and norms, and ways of doing things which may even be better.
Timely and honest communication allows the involved organisations to continue functioning during the transition. In the event that talent is lost, acknowledging this is key, as is incorporating the new culture into an old practice.
5. Set common goals
Everyone has to be on the same page and share similar business objectives. When everyone knows what needs to be accomplished, it is much easier to achieve these successes fully.
Milestones and success metrics then help to manage some of the emotion often associated with transactions. Communicate that the ultimate achievement comes only when the integration itself is complete.
6. ‘Pre-mortem’ your deal
Plan ahead for what may go wrong by brainstorming all the ways that could result in the deal not working out as planned. Take these scenarios and aggressively manage those risks upfront. That way there is less chance of you stumbling over a nasty surprise.
Not being prepared for failure is failing to properly prepare – and when those bumps on the road do come along, they can prove to be more major than they would be, if a plan is already to hand.
7. Focus on ‘best in class’
Just because a business has the capital and the interest, doesn’t mean your business is perfect. A company can always learn from new approaches and ways of working from the new partner.
You and your staff can learn from the ‘best in class’ processes and systems of the other party, and vice versa. In a merger, two cultures must learn from each other.
No matter how far reaching a leader’s vision, or how brilliant their strategy might be, success will not be realised unless talent from both organisations is championed.
Samantha Sida co-founded mall advertising specialist Limited Space with Matt Gordon. The business merged with Integrated Signage Solutions (ISS) to form Limited Space Media Group in 2013.