Uncooperative Behavior During Pre-Close Merger Integration Can Slow Process, Trigger Talent Flight, Threaten Performance

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Understanding, Addressing Root Causes is Key to Preventing Escalation, Says Booz & Company’s J. Neely in New Podcast Episode

Opening the lines of communication by stating objectives up front and holding conversations among the merging teams can go a long way toward preventing a lack of cooperation from undermining the integration process.

Not every merger is made in heaven.

Sometimes, one merger partner is simply uncooperative, adding challenges and uncertainty to the pre-close integration process. If left unchecked this situation can escalate, slowing the integration, triggering a flight of key talent, and threatening the long-term performance of the deal itself.

Taking the time to understand and address the root causes of a lack of cooperation are important steps in dealing with this behavior, explains Booz & Company partner J. Neely in Episode 44 of the Mergercast by Booz & Company podcast, titled “Merger Integration With an Uncooperative Partner.”

“Size mismatches can drive a lack of cooperation by putting an uncomfortable strain on the smaller of the two merging businesses. Requests that seem perfectly normal to a large company – for data, reports, meetings or on-site visits, for example – can overwhelm a much smaller partner. Similarly, stressed companies may find themselves stretched dangerously thin simply by the steps required to close a merger deal. Thus they’re unable to focus properly on post-close planning,” says Neely.

He adds, “Other drivers – especially prominent during the first 100 days post-close – include unclear integration objectives, which can lead to frustration by inadvertently directing people’s efforts toward low-priority tasks, uncertainty among employees about their future roles, and incentives that don’t match the merger’s longer-term goals.”

Opening the lines of communication by stating objectives up front and holding conversations among the merging teams can go a long way toward preventing a lack of cooperation from undermining the integration process. Taking the time to make prudent decisions and remaining well-organized and flexible are also important.

“The ability to adjust expectations and timelines or add additional resources to lighten the post-close workload can alleviate tension, often revealing that, in fact, a perceived lack of cooperation was merely a reaction to the strain of facing tough constraints,” Neely explains.

About Mergercast
Mergercast by Booz & Company is a podcast series exploring the world of mergers, acquisitions and restructurings. Episode, No. 44, “Merger Integration With an Uncooperative Partner,” has a run time of 16 minutes and 21 seconds. Listeners can play the podcast on its homepage (http://www.booz.com/mergercast) or subscribe via RSS feed, e-mail or the iTunes store.

About Booz & Company
Booz & Company (booz.com) is a leading global management consulting firm focused on serving and shaping the senior agenda of the world’s leading institutions. Drawing on the talents and insights of more than 3,000 people in 58 offices around the world, we help our clients achieve essential advantage by working with them to identify and build the differentiating capabilities they need to outperform.

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Sharon Bially
MBS Value Partners
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