New mergers and acquisitions can be an exciting, but also stressful time for both employees and stakeholders alike. While some individuals may look forward to the unique opportunities brought about by organizational change, others may be uncertain of what the future holds.
Regardless, major acquisitions, when executed effectively, can bring about positive change for an organization, especially when company leaders work together to make the right transformational decisions.
The Key Benefits of Mergers and Acquisitions
While every merger or acquisition comes with it its own variable of risk, there are many benefits that M&As can bring to an organization.
Scalability is a major deciding factor for company stakeholders when considering the acquisition of another organization. It could take years for some companies to grow organically to the level they want to achieve. M&As help them fast track this process and double or even triple their capabilities overnight.
Economical synergy is another benefit of M&As. Since both companies often combine their internal resources M&As give organizations more possibilities to achieve higher outputs while dominating their applicable sector. Competitive advantages are a powerful motivator for acquisitions, and organizations who execute them successfully can often attract a more diverse portfolio of assets and clientele.
The Importance of Business Transformation
As beneficial an acquisition may be, without a transformational shift and a catalyst for positive change, it is nearly impossible to achieve synergy between both organizations.
Post-merger integration (PMI), is an important part of the M&A process. When combining two organizations into one, there are a variety of factors involved, including resources, assets, staff, and business technology solutions. Getting all of these to work together cohesively is a challenging, but essential part of the process.
To adequately infuse transformational integration, it also requires a combined effort of everyone in the organization. Every member of both organizations plays a pivotal role in achieving adequate synergy levels and operational advancement. Having the right mindset towards each step in the process is essential, especially when considering both strategic implementations and business continuity.
Timing is another important consideration when driving positive change after an acquisition. There is a small window of opportunity before and after M&As where stakeholders are more accepting to change. It's imperative that at this stage, companies plan the necessary steps for transformational integration and paint a roadmap for success.
Major acquisitions can bring about positive change for both parties involved but require due diligence before and after the process. By understanding the benefits and challenges of transformational integration, companies can create powerful synergies that position themselves competitively in their industry and create a more sustainable organization down the road.