5 Mistakes that Could Sink Your Business Acquisition

Depending on which study you read, somewhere between 50-90% of acquisitions fail to meet theirobjectives. According to Bain & Company, “many acquirers - perhaps most - leave huge amounts of value on the table in every deal.” They fail to successfully integrate the acquisition in three main areas: missed targets, loss of key people, and poor performance in the base business.

Failure to successfully integrate the deal you just spent months negotiating can impact more than your bottom line; the productivity, retention, and engagement costs can be significant to your company as well.

Here are 5 Integration Mistakes that Could Sink Your Acquisition: 

1. Lack of Communication - According to Workforce, "This is a stressful time and people often need to receive information several times and by several different means before they truly ‘hear' it.” Over-communicating with employees during an acquisition is better than under-communicating.
2. Failure to Set Expectations - People can’t focus on the work until they know, “What about me?” If people know where they stand, they can get back to performing at their best. You need to have expectations meetings with your leaders, and you need to provide role and goal clarity through Job Scorecards and clear KPIs for all employees.
   
   
3. Inability to Tame Cultural Chaos - Integrating cultures is a huge challenge, but also a key to success. According to McKinsey, "If not properly addressed, challenges in cultural integration can and often do lead to frustration among employees, reducing productivity and increasing the risk that key talent will depart, hampering the success of the integration.” Unify under the same name, and bring your Core Purpose and Core Values to life. Culture is not just theoretical; according to Bain & Company, "executives from the CEO on down ... need to manage the culture actively."
4. Forgetting the Customer - There are a lot of people to consider when integrating an acquisition - you may have shareholders, leaders in both companies, and employees to consider, but don’t neglect the person who ultimately pays your bills, your customer. Bain & Company advises, "Take particular care to make customer needs a priority and to bundle customer and stakeholder communications, especially when systems change and customers may be confused about who to deal with."
5. Neglecting the Core Business - Don’t lose sight of what made both companies successful to begin with in attempting to integrate the newly acquired company. According to Bain & Company, "if management allows itself and the organization to get distracted, the base business of both companies will suffer. If everybody's trying to manage both the ongoing business and the integration, nobody will do either job well.” Keep focused on your Leading Indicators to monitor whether your existing business is staying on track.