Setting the correct speed for post-merger integration

Abstract

Terms: (BYLINE(bragado) AND HLEAD(Setting the correct speed for postmerger integration) and Date(date = 1992)) HIGHLIGHT: Determining the appropriate speed for each step in the integration process is a critical deter-minant of acquisition success. Integration processes after a merger or acquisition are so complex that extracting simple rules or criteria for success runs an obvious risk of oversimplification. Circumstances are diverse, and each case is worth ex-amining individually. Nevertheless, certain patterns that emerge from a recent survey of corporate experi-ence conducted by A.T. Kearney help to bring into focus some critical success factors. One of the most striking results of the survey, in which we interviewed more than 100 top executives throughout Europe, is that setting the appropriate timing or speed for integration seems to be one of the most important --and most frequently mishandled --aspects of the process. Key success factors We asked the CEOs or other key executives in the merger process to rank in order of importance several ground rules for a successful integration. Out of a list of 25, the following four criteria were ranked as the key success factors: 1) Executing a deal that makes strategic sense 2) Making the corporate cultures compatible 3) Having well conceived and executed operational plans 4) Choosing the appropriate integration speed. The first three factors have been extensively discussed in business literature, and it was expected that they would be mentioned in all cases. But the last one, integration speed, emerged as somewhat of a surprise. Moreover, this key factor was considered wrongly evaluated and executed by more companies than any of the other three: a full 60% of the respondents admitted that the timing of their own integration process was flawed (figure 1).