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Finding the right speed of M&A integration: why the first 100 days are crucial for success

Written by Charlotte Van de Vyver

Mergers and acquisitions can act like accelerators, helping companies to grow faster and to explore new horizons. However, not every integration goes smoothly. Challenges such as cultural differences, employee resistance and operational issues may complicate the realization of intended synergies.

Out of our experience we’ve seen one factor to be critical for PMI success: the speed at which the merged organizations implement changes and harmonize operations. This article explores why finding the right speed is not just useful, but also a fundamental requirement in navigating the complexities of a PMI. The right speed will ensure a smoother journey towards the intended synergies and sustained growth.

1. Why is speed a crucial factor?

If you look at M&A research, opinions differ on whether rapid or gradual integration leads to more favorable outcomes. Some experts argue for a more gradual approach, allowing sufficient time for change adaptation, while others suggest that the initial period post-merger is optimal for change acceptance. The commonly cited 'first 100 days' are considered pivotal for post-deal success.

If organizational conditions permit, rapid PMI’s can yield specific benefits, including:

  • Capturing synergies quickly and realizing cost savings, operational efficiencies and value capturing from the outset.

  • Mitigating uncertainties by providing clarity on the new organizational structure, reducing uncertainties among employees, customers and stakeholders.

  • Maintaining momentum for sustained employee morale and stakeholder confidence.

  • Retaining talent because of more clarity on the new structure and perspectives for everyone involved.

  • Maintaining customer confidence by addressing concerns and providing uninterrupted support.

While speed in PMI can offer various advantages, it also entails certain risks such as cultural clashes, operational disruption, employee resistance or even burnout. Accordingly, striking a balance between offering employee support, careful planning and communication is crucial. Effective communication helps to address concerns, mitigate resistance, and ensure a shared understanding of the integration process.

2. How to determine the appropriate speed?

Navigating the ideal speed of a Merger integration is no one-size-fits-all journey. A case-by-case approach is essential, understanding the context, merging parties, and key success factors. Determining the ideal pace involves identifying the optimal point on an inverted U-curve, where the most favorable results are achieved.

Consider these four crucial factors when figuring out how fast the PMI process should proceed:

  • How are the cooperative relationships between the two entities? Cooperative relationships during the PMI accelerate integration by fostering effective communication, resource sharing, collaboration, goal alignment, and cultural and IT systems integration. This collaborative approach ensures a swifter and more effective execution.

  • Are there big cultural differences? Cultural differences may slow down integration, especially cross-border, however understanding, appreciating, and strategically addressing them ensures a more successful and sustainable merger. Balancing speed with effective cultural integration strategies is crucial.

  • Do you have a great integration team? The Champion Team, crafted by leveraging the right internal individuals, is a dedicated team responsible for leading the transition. This team takes charge of change dynamics, cultivates goal congruence, and steers everyone towards a common objective. Their proactive approach streamlines the entire post-merger integration process.

3. Make room to measure and to reiterate

Effective tracking and monitoring throughout the integration process are crucial for gauging employee engagement and assessing whether the pace is perceived as too rapid or too slow. A company does not always have a clear view of whether an integration is progressing at an optimal speed. To address this, it is important to check in effectively with employees, utilizing both qualitative insights from interviews and quantitative data. This holistic approach allows for a nuanced evaluation, facilitating adjustments in pace that are better aligned with the needs and experiences of the workforce.

In summary, achieving optimal speed involves a nuanced approach considering various relationships, cultural dynamics, past experiences, and internal/external relatedness. Current insights emphasize a process perspective, moving beyond the simplistic views of speed as a standalone determinant.

Need help setting up your M&A for success? BrightWolves offers consulting services along the full M&A spectrum: ranging from helping to define your M&A strategy, to target screening & selection, commercial due diligence, deal closing and post-merger integration. Do not hesitate to reach out to our expert, Joris Vanthienen and Miguel Vandamme.


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