That’s right, it’s not about money, buildings, equipment, recipes, or products- it’s all about people in a merger or acquisition.
People run all of those processes. Without people, and understanding the social and psychological issues within both the acquired and acquiring companies, the merger WILL likely fail.
Failure to recognize that a human pushes the button on the process that you’re acquiring WILL likely create bad feelings, could lead to sabatoge, and may even become an incurable cancer within the new business.
So what do you do if you are either the buyer or seller in an M&A deal?
1. Be sure all processes in finance, operations, and sales are completely documented.
2. Align both organizations side-by-side and get to know the staff in each company responsible for key processes, including overlapping roles, vacant.roles, and/or people doing “double duty”.
3. Understand the accountability chart in each organization and how everyone reports to leaders.
4. Develop a clear plan to transfer knowledge from the acquired company to the purchasing company.
5. Create a project team to clearly communicate with team members of each organization as each step of the merger is completed.
6. Align core people related processes- like HR handbooks, benefits, compensation, and reviews to be sure the new team is welcomed and acclimated.
The more information the better, and transparency is key. You’re buying a company because of the processes leading to additional growth for your current business. Don’t be cut off at the knees because you didn’t think about the people!
Vend Advisors LLC and our sister company SharpCFO strive to deliver the most support when we are involved in a merger of any size. We get people, processes, and product- and our finance and operations brains are wired differently- in your favor.
If you or someone you know is thinking about buying an existing business, please contact us. We have actual experience working in companies which were part of deals- and we know how to help your people.