Beyond the Deal: Why Process Improvement is Key to Post-Merger Success
During the initial stages of post-merger integration, the focus is predominantly on the integration of systems, unification of people, and alignment of financial frameworks. These elements are foundational for merging two companies into a single operational entity. However, as integration moves forward, it becomes apparent that process improvement, often does not receive the necessary attention until challenges and inefficiencies start to emerge. We normally see this phenomena occur around six months after the merger has been completed. This oversight can lead to a range of operational difficulties, underscoring the critical nature of process improvement for the long-term success of the merger. Without a concerted effort to review, refine, and integrate processes from both entities, the organization may face hurdles that impede performance and growth.
Normal Issues When Process Improvement is Ignored
Confusion on Roles & Responsibilities- The absence of standardized processes can lead to operational disruptions, as employees may be unclear about their roles, responsibilities, or how to perform certain tasks. This can affect service delivery, customer satisfaction, and ultimately, the bottom line.
Operational Disruption - Processes are often key to a companies operational success. When a merger occurs, the company has two process in use. If this is not addressed individuals use their best judgment to accomplish their work. Although appreciated, this will lead to decreased efficiency, missed execution, and disruption of service.
Limited Identification of Synergy Opportunities - One of the primary goals of mergers is to achieve cost savings and efficiencies through synergies. However, without harmonized processes, it becomes challenging to consolidate roles, departments, or systems effectively, resulting in missed opportunities for synergy savings.
Lack of Synergy Savings - key objective of mergers, becomes increasingly complex without consistent and streamlined processes. Synergy savings are predicated on the ability to effectively consolidate positions and key systems. However, without a unified process framework, these consolidations can be challenging to implement, leading to inefficiencies and missed opportunities for cost savings.
Change Management Hurdles - Significant change management efforts are required to merge disparate processes effectively. This involves not only communicating changes but also managing the transition at every level of the organization. Without a focus on process improvement, these change management efforts can be more difficult, prolonging the integration period and increasing costs.
Consistent processes are the backbone of a unified, efficient, and productive post-merger entity. They enable the organization to leverage the strengths of both companies, eliminate redundancies, and optimize operations. By focusing on process improvement as a central phase of post-merger integration, companies can ensure that they are positioned to achieve their strategic goals, realize expected synergies, and drive sustained growth. Recognizing and addressing this often-overlooked phase is essential for any company looking to thrive following a merger.
