Encourage collaboration and grow your business with these five tips.
Mergers and acquisitions can certainly lead to a more profitable company, and while the process can be an exciting adventure, the transition period is challenging as it may generate uncertainty and questions among employees, customers and other stakeholders. How leaders handle changes during this period is important. In fact, according to findings by KPMG, 80 percent of mergers and acquisitions that fail do so as a result of improper change management.
I was an integral part of the acquisitions that brought Minnesota Thermal Science and Cool Logistics together as Pelican BioThermal and Peli BioThermal under the BioThermal division of Pelican Products, Inc. Through my experience, I learned that proper planning and execution is essential, and there are ways to encourage collaboration and draw from expertise in both companies during the transition period – regardless of who leads the merger or acquisition. Although both companies were acquired, we retained valuable talent, including some of the senior leadership that remains with the company today, and, ultimately, we're growing the business. The success we experienced can be attributed to a solid plan and careful execution.
Below are my five tips for encouraging collaboration and growing your business during a merger or acquisition transition period.
Tip No. 1: Put a firm plan in place.
One of the biggest issues following a merger or acquisition is balancing integration activities with day-to-day business. For many who are accustomed to the day-to-day operations of a business, it's tempting to immediately start making changes, however, it's important to resist that urge, and to instead, have a firm plan in place.
Quickly following the merger or acquisition, hold an off-site meeting with both management teams. Set up project teams to map out specific plans and then vet those plans with the appropriate people. Make sure to look at every area of the business and agree on a plan that addresses the overall direction of the business.
Tip No. 2: Communicate the acquisition to employees.
Communication is key during the transition period following a merger or acquisition, especially communication with those who are part of the entity being acquired. Employees will likely feel anxious and uncertain about their path moving forward.
In the process of building a collaborative team, it's important to reassure employees from the beginning. Explain why you've brought the companies together and why their company – and its employees – are important to the overall business. To ease the transition, we always prioritize having someone from senior management meet with all the employees of an acquired entity in a group session for questions and dialogue.
If locations vary, it might also make sense to embed someone from your company's HR team on-site. Having a local and constantly accessible HR staffer not only provides a resource for employees but also allows you to better understand and monitor concerns from employees that may arise following the announcement.
Outside of face-to-face interactions, consider putting together an FAQ document. Ours typically includes 20 or so questions and answers from leadership. We found it to be a successful way to further emphasize important information and keep the lines of communication open.
Tip No. 3: Quickly align messaging for the sales team.
There is only one planning piece to be rushed after a merger or acquisition, and that's the sales communication plan. With "entering new lines of business" cited as a leading reason for initiating acquisitions, according to data from KPMG, there are often lots of moving parts to consider. The sales team should not be delivering mixed messages, so be sure to involve all parties in the planning process and move quickly.
Often when bringing two companies together, leadership skips the sales plan or creates a half-measure solution by keeping sales teams divided and selling only products from one company or the other. They may provide general messaging about the company as a whole, but don't fully align overall messaging. This is a missed opportunity to bring relevant solutions to existing sales prospects, with whom the sales team members have already cultivated relationships. Allowing both sales teams access to the full line of products can help to accelerate growth.
Tip No. 4: Talk to customers.
Don't neglect the important stakeholders involved in your merger or acquisition – your customers. Not only is it important to reassure customers about the direction of the company, but these individuals are also a great asset to have when it comes to shaping that direction and may have constructive feedback on everything from product to customer experience.
For example, at one point, Pelican acquired a competitor with competing product lines. The first thought was to scrap the competing product line, but after talking with customers we did a 180-degree reversal. Based on customer feedback, we actually ended up growing the competing product line as an alternative, and it was very successful. Without talking to customers, we may have missed a revenue opportunity.
Tip No. 5: Prove that you're better together.
Your choice to merge with or acquire another company likely wasn't just a public relations push. Ultimately, these decisions should positively impact your business, which then will positively impact your customers. Look for opportunities to showcase how customers can benefit from the merger or acquisition.
After the acquisition of Cool Logistics, our European team at Peli BioThermal quickly launched new higher performance single-use products. Some of the technology already being used in our current product lines was applied to the recently acquired lines. This was a huge benefit to our customers and something our sales team could tout as a benefit of the two brands coming together.
The transition period of a merger or acquisition, no matter the company size, is tricky and can prove to be a challenging endeavor. I learned my approach through practice and am pleased to share my successful experience in the hopes others will find similar results. With a proper plan, teamwork and consistent execution, the combined entity will grow to be stronger than the separate organizations could have achieved on their own.