Post Merger Integration (PMI)
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A large pitfall in PMI can also be over-engineered earn-out schedules and complicated option plans for majority investments. These hinder the effective integration work after the deal and build new silos within the company.
A lack of sociocultural (employee-centric) approach can be a huge pitfall during post-merger integration.
Since this dimension tends to be overlooked by most companies (compared to the strategic & financial ones), it can delay or even derail the transaction’s successful execution. So it’s important for business leaders to proactively plan for the ’employee-centric’ aspect of an M&A – including gathering insights from impacted staff, deploying strategic messaging from leaders, and making active attempts to introduce & integrated acquired staff into the acquiring company.
Thanks for posting!
Agree with the above points,in particular with regard to integrating the different ERP/IT systems of the merged companies. Too often it seems that vague TSAs are prepared quickly without a really clear plan of action on how to integrate systems in the short term, which is a major source of value leakage.
People and culture issues are the biggest ones in my book. Constantly overlooked and always ends up being an issue down the line.
I would say the lack of collaboration among teams, insufficient knowledge sharing as it could be difficult after merger date to book everyone’s time due to the operational need for operational continuity. The lack of commitment by leadership could also be one of the major pitfall.
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