There’s no luck involved in having a successful and seamless merge −all you need is a well-defined “why,” a strong and detailed strategy and a solid employee/customer communications plan.
As the CEO of Bioplan Mappel, I was tasked with navigating the Arcade Beauty merger. I began mapping out the steps we would need to take to make the merger of our facilities and teams successful and realized there were commonalities among the best M&A deals.
Define Your “Why”
The very first question, before entering the process of looking for a company to purchase and merge with, is why? Seeking growth doesn’t mean much unless you have a clear view of what you want to achieve and why you think you need to acquire a complementary business.
Why should this merger unfold? Do you want to merge companies to acquire new technologies? Do you want to reduce competition and enlarge your market shares? Do you want to increase your portfolio and leverage negotiation with distributors? Or do you want to create a new market in different countries? Knowing your “why” is critical.
Plan, Plan, Plan
Once the details of the deal are being ironed out, it’s time to develop plans. Be sure to take almost every aspect into account. Develop:
• A strong and detailed plan with KPIs and milestones to follow up on. Keep in mind that the plan must be flexible enough to allow changes and adaptation to unexpected situations or events that always arise in this type of process.
• An analysis of the risks and opportunities regarding your people, savings, costs, customers, suppliers and key partners.
• A well-qualified HR structure that identifies high skilled and key people in both companies and works on the cultural difference to implement a new vision and mission for the new company.
• An IT team to implement common enterprise resource planning (ERP) and management tools to create unity.
In general, your merger plan should gather the best practices of both companies because even when companies belong to the same market, it’s important to note that all businesses have their own culture, and few will accept to lose what makes them different or successful.
Employee Communication is Key
A major pitfall that I’ve seen in unsuccessful merges is a lack of communication toward the employees. While I understand that the communication must be done at the right time and must respect some confidential aspects of the deal, it is important that managers of both entities are aware of the plan, its goals, risks and its opportunities.
Without a sound employee communications plan, there is a high risk of losing key people who may feel they are not part of the plan and fear for their job and position. And worst, those who will not leave, but are resistant to change, might behave in a manner that forces the process to fail or turn into a nightmare.
In addition to your employees, you have to keep your customers in the loop. When two companies merge, customers may grow uncertain, so it is important that they are informed about what is going on. What is the plan? How are they going to benefit from the merger?
Like any other change in life and business, all you need is a reason, a strategy and a way to share the news. Merging companies follow the same rules.
About the Author
Maxime D’Haussy i has more than 25 years’ experience in the cosmetics industry, an expansive familiarity with the market particularities in different countries, and a wide knowledge of business management. As CEO of Latin American operations, Arcade Beauty, he was integral to the Bioplan Mappel and Arcade Beauty successful merger and turned around the companies sampling business.