Transitioning an acquisition into a business is never a simple thing to do. You have acquired a new business or new type of business, with maybe different cultures, processes and systems. What could possibly go wrong? It will all merge together perfectly, won’t it? Well quite a lot could actually go wrong! There are so many opportunities for failures when it comes to acquisitions that without careful transition planning serious mistakes can be made that can affect cost and performance for both organizations.
There are real dangers when it comes to transitioning an acquisition businesses should not fool themselves in assuming that everything will be ok and that structured project management is not required.
Transition team
Many organizations will appoint a transition team who’s role is to transition the new organization into that making the acquisition. They will assess the various functions of the new organization and develop strategies that will include
• Will the new business be a stand-alone Business unit or incorporated into an existing one
• What organization/personnel issues exist
• IT Systems
• What back office functions need to be merged
• Commercial/contract issues
• Supply Chain planning
• Customer management
• etc
Organizations must ensure that the transition team has appropriate resources, authority and capacity to manage and deliver effectively. Managers are often left to ‘manage’ the transition process when an acquisition takes place – leaving key personnel juggling multiple roles. For acquisition transitions to work well a significant level of support is required some of which may require dedicated resource.
Compatibility issues are common but rather than ensuring that the new company should simply ‘fit in’ with how things are done – best practice should be sought out. This can often be quite a challenge for personnel within the acquired company. They will have had their own way of working and some people will find it very difficult to adopt new working practices. Looking for synergies between organizations to understand how the new organization will function can be perhaps the most complex task often hampered by key stakeholders being protective of their own resources, processes and systems.
Change management principles are key to transitioning the new organization – Within any organization there are people who really dislike change. In addition, there is a strong probability that personnel within the acquired company may well be harboring resentment at having been ‘acquired’ but instead of openly expressing this resentment it can be expressed in a variety ways. Resentment or lack of trust of the acquiring company really is an issue that cannot be over emphasized.
Only with strategic planning and a robust transition management policy will the transition period be free from disastrous hazards, but you do need to manage these hazards out!