Mergers & Acquisitions Integrate or Wait? That Is the Question (Part II)

Puzzle pieces

In part two we outline the four risks to be aware of.

In part one Mergers & Acquisitions Integrate or Wait? That Is the Question (Part I) of this two part series looked at the overall M&A environment and the challenges of achieving success with deals once they have closed, particularly in light of the intricacies of integrating two disparate organizations. 

With that in mind, it is not difficult to imagine the risk of remote integrations. Post-closing operational and cultural challenges are even more difficult to assess remotely, and the temptation to just do enough to “tick the box” can become irresistible to those who have little operational experience, and for whom culture is usually not a top priority in the first place.

Moreover, the connective tissue between the organizations is created through the integration journey when personnel from each company start to establish relationships based on perceived, shared collective interests. Much of that interpersonal rapport occurs outside of formal, structured meetings. And despite the technological advances in video conferencing, people still cannot have an impromptu stop at a colleague’s office for a chat, or have an informal side-bar conversation in the middle of a meeting via videoconference. And it is during these unplanned moments that real issues are uncovered, and rapport is built.

Beyond this, remote collaboration tools – while much improved – still do not adequately allow people across multiple geographies to co-create effectively. There is no substitute for being in a physical room in a creative workshop with multiple working groups to address and resolve challenges while ensuring everyone is heard. Add to this the fact that most people have long ago crossed the threshold of Zoom fatigue, leading to lower than needed engagement to deal with some of the most vexing issues of an integration.

This will significantly increase the temptation to rely on integration “playbooks,” and except in cases with the most basic of integrations, formulaic approaches that are not tailored to the individual companies ultimately do not work. While it may appear that issues are being checked off the to-do list, there is a real risk that it is being done superficially. Confirmation bias can lead to a false sense of progress that minimizes problems that can lay dormant and then emerge as major stumbling blocks later on when it is far more difficult to correct them. Stated differently, getting things done via Zoom has worked because it has had to – faced with no other option companies and employees have adapted. But there is a huge difference between maintaining business continuity for teams that know each other and are working with operating processes they are familiar with, and integrating two completely different entities via video conference platforms.

What to do, what to do:

With all of these dynamics at play, the decision of whether or not to undertake the amplified risk of remote integration should be taken based on an objective dissection of the risks involved.

Here are four risks to be ware of:

  1. Is the integration simple, with no nuance? Is one company being asked to follow the other’s operating environment as is – “our way or the highway” – or are they trying to preserve elements of both companies and actually integrate into an improved new entity (e.g., “secret sauce” integration)?
  2. Is there significant similarity between both companies operationally? This should not be based on how much overlap there is in vision, target customers or geographical footprint, but on a determination of the similarities in operating processes. This will help reveal potential flashpoints before embarking on an integration.
  3.  Are the cultures of both organizations complementary, and do employees behave the same way? This should not be based on observation, but should on the use of analytical tools that can define both cultures and identify differences in how the operating staff behave day-to-day, not how they feel or what they said during due diligence.
  4. Weighing the above, is the integration really urgent? Ask yourself: what are the consequences if it doesn’t happen right now?

Most integrations will be – by their very nature – complex. If leaders determine that their integration is an exception – simple, without nuance and with operations and cultures that are so similar that only minor tweaks are needed – then conducting a remote integration may be feasible if managed well. Similarly, if it is determined that integrating is absolutely urgent, then executives have no choice but to proceed with remote integration and take steps to mitigate risks to the extent possible. But in both above cases, proceed with caution and be fully alert to the pitfalls.

If the answer to any of the questions above is no, then defer integration until it can be done properly – which at this point is months, not years from now. The correlation between failed integrations and failed deals is too high to brush aside, especially given how difficult it is to objectively answer the above questions with confirmation bias and personal incentives in play.

CEOs and their executive teams who are pursuing M&A during this period when employees remain remote or at best in hybrid work mode will need to apply even greater discipline in making decisions about integration, and do so without many relevant historical paradigms from which to draw insights. Many traditional management consulting firms will counsel that remote integrations are being done effectively during this unprecedented period, but not enough time has elapsed to substantiate this belief and history has shown us that the stakes are too great to proceed based on wishful thinking. Look before you leap.

Related content:

Mergers & Acquisitions Integrate or Wait? That Is the Question (Part I)

Grow Your Business Through the M&A Pipeline

Can Your Business Benefit from COVID 19?

Understanding Your Business Investments




4 Components of Small Business Agility in a Diverse Market

4 Components of Small Business Agility in a Diverse Market

Small business leaders need to understand diversity in order to be connected and create opportunities for success   The model of how to effectively navigate business leadership is changing. For decades stability and homogeneity were hallmarks of business across...

Top 7 Ways to Show Your Customers You Care

Top 7 Ways to Show Your Customers You Care

Even a small gesture can go a long way with a client and will be appreciated.   Nowadays, having a good product or service isn’t enough. Relationships are the differentiator. Today many companies are making investments in customer advocacy and loyalty programs...

Three Keys to Obtaining Funding

Three Keys to Obtaining Funding

To secure funding it's essential to instill confidence with a professional and accurate financial summary Securing a loan or other private funding is all about the business owner. Can you accurately represent your financial past and convey an exciting but credible...

Video Gallery

Modern version of Stoic philosopher Epictetus
A professional leads a cybersecurity training session for employees, emphasizing best practices. The photography captures the engagement of participants, showcasing the educational aspect of safeguard
Hispanic bearded male businessman trainer teaching coaching new recruitment African American female businesswoman employee in formal suit sitting studying learning company graph chart strategy
The presence of a robot using a computer. Office keyboard being typed on by machine. future IT group,.
Latino Streetwear Entrepreneur Latin Biz Today
Chef Lorena Garcia cooking with a wok
Latina Chef Loren Garcia
Latin Biz Today partner Johanna at the San Sebastián Festival


Which item currently represents the greatest hurdle in the growth of your business?(Required)

Sign Up for the Latin Biz Today Newsletter

PR Newswire

Featured Authors

avatar for Art AmlerArt Amler

Art Amler, executive HR consultant & fou...

“I Don’t Like My Increase!”

Innovation & Strategy


Four Basic Principles for Raising Capital

Four Basic Principles for Raising Capital

Outside investors want to understand a business' strategy as well as its financial statements.   The need to raise capital from outside investors requires a great deal of preparation across multiple dimensions. Among many things, investors look to understand...









Work & Life


Health & Fitness

Travel & Destinations

Personal Blogs

Pin It on Pinterest