The Organisational Dynamics of Mergers and Acquisitions

According to a new report by accountancy giant, Ernst and Young, over half of UK companies (51%) plan to prospect and actively pursue merger and acquisition deals in the next 12 months as companies prepare for life outside the European Union. Whilst organic growth is expected to fall by 11% there is an increasing emphasis on mergers and acquisitions, including joint ventures and alliances. EY’s Steve Ivermee, said ‘strategic deals that help business access new markets, new geographies, and new technologies look likely to remain high on the boardroom list of priorities’.   

With this in mind, most organisations are likely to be considering, if not actively pursuing, a merger and acquisition strategy. Based on our experience organisations who are the most successful in integrating new acquisitions into a group structure carry out parallel organisational development planning as they move towards and complete the M and A deal. This involves an understanding and risk assessment of the potential partner in terms of leadership capability, employee skills and culture as well as the more transactional and technical issues of market integration, governance and contracts. Such a holistic approach will ensure plans can be developed ready for execution from day-zero plus 1 of the new corporate entity. This is no easy challenge in the VUCA (volatile, uncertain, complex and ambiguous) environments surrounding mergers and acquisitions.

By understanding the different cultural dynamics of the merging organisations and/or the new acquisition, leaders can identify the key facilitating levers of change and ensure successful and profitable implementation of the M and A strategy. In such a changing and pressured situation it’s necessary to adopt a proven, pragmatic and practical approach, with a dual focus on quantitative forensic data interpreted by qualitative consultative expertise.  

At Collingwood, we apply this quantitative and qualitative dual focus to assess the existing state ‘as is’ of the new merging partnership, help our clients develop the desired future state ‘to be’ and facilitate the creation and implementation of an organisational dynamics plan designed to optimise the performance of the new corporate entity. If you’re considering or pursuing an M and A strategy then it’s never too soon to plan for the post-merger period.