And You Expected Synergy?

By guest author Ed Rigsbee, CSP

Seems like every time you pick up The Wall Street Journal, your own industry’s publications or your daily newspaper—there you see it. You read about another merger or acquisition. Why are they doing this you question? The usual answer is synergy. If you are looking at a possible merger or acquisition, decide early on your synergistic expectations.

Be clear on what you seek, resulting from your merger or acquisition. What end-results do you believe are possible? How do you intend to create the axiomatic equation of one plus one equals three? To help you improve your chances of successfully blending organizations, I have listed are several areas that you should explore.

  • Economies of scale for cost savings in procurement, management, manufacturing and distribution.
  • Do you want to encourage entrepreneurship, initiative and risk taking on a local, regional, national or global level? Do you want collaboration among the units? Or do you want a traditionally hierarchical organization?
  • How do you intend to create and deliver innovative value-added services?
  • Will you take a broad marketing approach or focus on markets requiring distinctive competencies?
  • How will you achieve continuous improvement?
  • Will your new size and strength encourage you to pursue additional strategic acquisitions?
  • What about staff considerations? How do you keep the employees that possess the intellectual knowledge and skills critical to success? Employees from both companies will be concerned about job security. Additional considerations will be to help surviving employees understand why they were selected to remain. Some of these surviving employees will have guilt issues to deal with. They could have issues with why certain employees were not kept on that they thought were doing a good job. Communication is important here as executive search headhunters firms could be contacting your remaining employees. If they do not have an understanding of their value, they could be seduced into a new position elsewhere; leaving the merged company empty handed in some areas.
  • What incentives and rewards will be put into place as motivation for retained employees?
  • Even the name of your new merged organization is important. This will identify your marketplace position and inform all of your new identify. Create your new early in the process.

Copyright © 2010 Ed Rigsbee

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Ed Rigsbee, Certified Speaking Professional, travels internationally to deliver keynote presentations and workshops on effective and profitable alliance and partnering relationships. In addition to serving as the president of Rigsbee Research Consulting Group, Ed also serves as the CEO and Executive Director of a (501 c 3) public, non-profit charity. Ed has authored three books and over 1,500 articles to help organizations to take full advantage of their potential. While Ed has been fumbling, bumbling, and stumbling his way through the organizational mazes of for-profits and non-profits for over four decades, he has been an observer, researcher, and teacher; helping organizations of all sizes to build successful internal and external collaborative relationships. Contact Ed, get additional (no charge) resources, sign up for his complimentary weekly Effective Executive eLetter, or to view Ed’s videos, please visit www.Rigsbee.com


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