Jan 6, 2012

2012: The Year of Post-Merger Integration?

Posted by in Culture & Change Management, Project & Program Management, Project Failure & Recovery, Project Management Office (PMO), Strategy Execution | 0 Comments

2011 was touted by Forbes Magazine as the “Year of the M&A” and the past year’s business news showed that they were not far off the mark.

If you work for a company that has been in on this trend, congratulations – and now your real work begins! “Post-merger integration” activities include re-evaluating current practices, understanding cultural differences, getting projects that may have been halted back up to speed and integrating methodologies, systems and processes – all while successfully meeting business demands on a consistent basis.

In our work assisting companies with their transformation, there are several key activities that we’ve found to be critical to expedite the transition to a smooth operating environment:

  • Set up a PMO to centralize governance of projects associated with the M&A.  This structure must fit the new culture and train resources on new/existing practices to promote process adoption.
  • Implement portfolio management and prioritize initiatives that are critical to the integration and to maintaining market share.
  • Focus on organizational change management by executing a cohesive communication plan
  • Establish resource management; know who you have available and their capabilities.  Subsidize current staffing levels as required to meet business demands.
  • Plan ahead and take action before projects veer off track.
  • Don’t hesitate to bring in turnaround experts; they are skilled at quickly resuscitating troubled or stalled initiatives.

Mergers, acquisitions or divestitures hold great promise for jump-starting profitability … but there’s a significant risk of failure. In fact, a 2004 study by Bain & Company found that 70% of mergers failed to increase shareholder value. When we study the details of these failures, it’s hard to ignore the role that poor program management plays when these deals go awry.

As an example of how good program management, allied with good organizational change management, can create value, check out this brief case study.

Been through a merger recently? Share your thoughts with us.

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