Post-merger integration can be tougher than hammering out the deal itself – in more than half of  M&A transactions, organisations fail to boost shareholder value or deliver the business case (¹). Often, anticipated cost savings and synergies don’t happen, the best staff leave, and customer focus is lost.

So, here at Clarasys, we apply five PMI principles with laser-like focus, to significantly increase the chance of success. These have been distilled from our experience working across highly complex programmes of work in unstable environments.

1) Focus on the customer

Put simply, don’t neglect your existing customers and make sure they go on the journey with you. Organisations frequently end up focusing so much on their integration activities – building the new organisation and driving for synergy benefits –  the base business gets neglected, leading to a fall in sales.

2) Reduce risk

It’s no good worrying about how the businesses will be brought together after deal day. Planning early allows you to start mitigating risks and validating critical business case assumptions.

Look for misaligned processes which can cause inefficiencies and waste when two organisations are merged.

Good communication is the key to allaying workforce uncertainty. Companies need their best staff onside, not tidying up their CVs and looking elsewhere for a new role.

3) Prioritisation

Do not try to boil the ocean, focus on the things that matter. Concentrate on the things which will deliver your business case and do them well. Allocate resources to opportunities which are going to deliver the fastest, because this helps create momentum. The important thing when you’re setting priorities is you set them rigorously and transparently with representatives from both the purchasing and acquired companies. Make sure the entire organisation knows what your priorities are, so everyone can pull in the same direction.

4) Agile delivery

Agile works well in environments with lots of uncertainty, making it particularly suitable to post-merger integration where there are lots of unknowns. Divide your integration opportunities into coherent ‘slices’ containing self-contained customer or employee journeys. Prioritise each slice by business value and begin with your highest value slice, delivering it end-to-end. This approach reduces risk by delivering in iterative releases. It delivers working customer and employee journeys more quickly and accommodates uncertainty and change. It also reduces wasted effort by prioritising your highest value changes.

5) Preparing the organisation

Change management is how we prepare an organisation for change. It’s not just about communication and training, but also about developing capabilities, how we bring two cultures together and how we get people on board. If this is done well, it generates engagement across the organisation and gives support to people as they move to new ways of working.

Using these five principles builds momentum, reduces risk and delivers the business case early.

This, in turn, helps convince your stakeholders there are visible signs of progress and that’s part of the battle won.

(¹) HBR March 2011 ‘The big idea: The new M&A playbook’

Find out more about how we help clients with their post-merger integration here.