How to prepare for a business acquisition or merger – it’s all about change management and scenario planning

In today’s complex business landscape, business acquisitions and mergers are a common occurrence. While these can be an exciting time of growth and opportunity for a business, we have seen that they also bring a number of risks and challenges. In this blog, we explore how organizations can prepare for a business acquisition or merger successfully.

Preparing for change

Organizations that are not prepared for the challenges that can arise during a merger can end up rapidly “burning” customer and employee goodwill with short and medium term impact on financial performance. When getting ready for a business merger or acquisition, it’s important to be prepared to deal with significant changes - some known and some unknown. You need to be ready for the challenges that undoubtedly come with merging separate companies, which have their own strategic goals, operational processes, and work culture. Establishing alignment in key areas is essential to ensuring a smooth transition and enabling the future success of the business. Cultural differences, for example, can impede progress and quickly erase employee trust and collaboration.

The importance of having a Plan B

While most companies will take time to consider the implications of a merger or acquisition on their sales and operations, many neglect to think about the risks associated with other areas of the business. Organizations need to consider questions such as, how much of leadership’s time will be taken up managing the merger? And what impact will this have on the business? Asking “what if?” and “so what?” is a useful tactic for identifying what could go wrong and prompting actions to be put in place to prevent any downside.

With any shift as significant as a business merger, there are likely to be employees who will be resistant to change, and some may even choose to leave the company. Organizations need to consider how many employees they are at risk of losing during an acquisition and put measures in place to either retain or replace staff to avoid a negative impact on their operations.

Navigating a business acquisition with IBP

In our 50 years as business transformation experts, Oliver Wight has seen the benefits of having a robust business planning process, such as Integrated Business Planning (IBP), in place when navigating a business merger or acquisition.

IBP provides a structured framework?to manage your entire organization, ensuring alignment of strategic and tactical plans every month. As part of the process, risks and opportunities are formally considered, with contingency plans developed for different scenarios, enabling your organization to respond quickly and effectively to internal and external changes.

A well-designed IBP process, which is actively owned and deployed by the executive team, will allow your company to manage this significant change to the business environment in a controlled and deliberate manner, providing clear direction to the whole business on the way forward.

Planning for the future

Navigating the uncertainties that occur during a business acquisition is a significant challenge for leadership. Although it’s impossible to anticipate the impact of every change, businesses that employ Integrated Business Planning take time to regularly understand the potential risks and develop contingency plans to mitigate them. This ensures they’re better equipped to pivot when changes occur, allowing leadership to make the right decisions quickly and seize opportunities for growth that may also arise during the process. By using IBP to become more agile, businesses are not just equipped to successfully navigate an acquisition but also prepared to successfully navigate any other changes the future has in store.

Is your organisation facing a merger or upcoming acquisition? Contact us if you would like to understand how we can help it go smoothly and realize the intended benefits.

Read more on how Integrated Business Planning can help you plan for uncertainty in our white paper: Is Your IBP Process Fit For The Future?

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