Perhaps more than any other organizational change, effective change management is crucial to make acquisition a success. The change management team must effectively assess the company culture of the new company and work out how to assimilate it into their own. Asking questions such as how is productivity measured, what does success look like and how are employees rewarded are the first steps in ensuring employee engagement does not take a nosedive.
Technology and data must be reviewed. How will the two IT systems communicate, or will a new system be required to cover the work of two legacy systems. Where will two separate business units become one and where will the two work alongside each other.
The most important aspect of the change process is in the strategy. From deciding which businesses are appropriate acquisition targets to understanding the minutiae of how the acquisition will be managed to finally what will happen once the acquisition is complete. Preparation, research, and careful planning is the only way to avoid the risks and pitfalls involved in an acquisition.
Mitigating the risks of acquisition
As with every business decision, acquisition is not without its risks. However, the application of due diligence in setting out a thorough and detailed roadmap of the acquisition process should ease concerns as companies enter into the acquisition process.
As with any major change, the success rate of acquisition is not guaranteed. There is a chance that the gamble of acquisition may not pay off. The reasons for this include if the acquisition price is too high, the process takes too long or results in the loss of staff or customers
In particular, hostile takeovers can become very expensive. The acquisition project team must set out budgetary constraints from the outset to mitigate as much as possible against unforeseen circumstances in terms of cash flow.
Perhaps the most famous risk to a successful acquisition is the clash of culture that may occur when two businesses collide. Senior leaders play a huge role in managing this major change from the top down. Cultural differences must be identified and planned into a new culture which is communicated to employees via a thorough change program.
Talent management should also be overseen by senior executives, ensuring that productivity and efficiency are not sacrificed, and high-performing individuals are taken care of.
It is not only the staff that can cause friction during organizational change. The infrastructure of the business is at risk of causing acquisition to run aground. From administrative setup to cybersecurity, management teams need to plan for the successful integration of every aspect of the business. Failure to pay staff on time, breaching employee data laws and in the case of international expansion, errors in handling local payroll regulations are all mistakes which could cost a company a successful acquisition.
When the managerial focus of a company shifts to acquisition, it is sometimes the case that other issues and opportunities are missed. Outsourcing crucial infrastructures such as payroll prevent this from happening particularly in expansion on a global level, enlisting dedicated teams to oversee the day to day processes.
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