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The Challenge of
Integration
One of the largest challenges facing
CEOs when an acquisition is made or joint venture is formed is the challenge of integration.
Not only do critical systems require alignment, but people must be able to work together
well and with a desire to "win". Developing a common vision and enthusiasm
for achieving it is a daunting task. It requires the skill and experience of The
Zeika Group.
Most mergers and acquisitions are born from a desire to achieve synergy . . . in
the marketplace, in technology, in economies of scale. Most die from a lack of attention
to the very people who have to make it happen. The challenge is to give new life
to the people and the new organization.
The reality of integrating organizations is far more difficult than most people expect.
Mergers and acquisitions have been a growth strategy for major corporations for over
three decades now and hundreds of articles have been written about the lessons learned
from their experiences. The conclusions are that the majority of these integrations
fall far short of hoped for results, costs run much higher than expected, time required
to complete the integration is much longer than expected, and often critical talent
is lost in the process.
Many reasons are cited for these difficulties, but there are common themes . . .
overly optimistic expectations, poor or limited due diligence, high demands for investment,
major strains on the parent company, and poor integration after the acquisition or
merger is made. One of the major reasons cited for an unsuccessful post-merger
integration is failure to integrate the cultures and systems of the two companies
involved which create major energy and financial drains on the new entity and the
parent. This difficulty is heightened when the integration is an international one. |
