Three Ways Mergers and Acquisitions Could Potentially Disrupt Efficiency

April 15, 2022

Mergers and acquisitions are notoriously disruptive. It’s nearly impossible for the average company to anticipate, on its own, all the possible problems that could arise. According to the Harvard Business Review, somewhere between 70% and 90% of all M&As fail, and the fact that some of the biggest failures of all time were between powerful, successful companies (like the Bank of American/Countrywide failure in 2008 or the Google/Motorola failure of 2012) indicates that nearly every company needs outside help to preserve project efficiency.

Three Ways Mergers and Acquisitions Could Potentially Disrupt Efficiency

Through Lost Trust

Your human capital is your most important investment, but it’s all too easy to forget about the people during an M&A. While upper management might be thrilled about the change, this doesn’t mean that stakeholders and staff closer to the bottom are very excited.

If you lose the trust of the people at the top, or at the bottom, you’ve just tanked your efficiency. People who don’t understand their place in what’s happening or how it will benefit them are not inclined to work hard. People who are worried about their jobs are inefficient, and their focus is drawn away from tasks and projects.

Through Lack of Due Diligence

You must follow through on certain things to ensure a successful M&A, but it’s hard for us, as humans, not to take a shortcut. All mammals instinctively avoid expending energy whenever possible to preserve it for future needs. As humans, our enormous brains both allow us to understand the dangers of shortcuts and, ironically, use up more of our energy than any other single bodily function, making us ultimately more prone to taking a shortcut if we think it will allow us to expend less mental energy.

Even those who know they shouldn’t be taking shortcuts are still tempted to do so, making it one of the biggest issues for M&As out there. Make sure your people understand that efficiency isn’t the same thing as cutting a corner and that cutting corners actually causes more problems in the long run. Leverage your management consulting partner to keep an eye on the process and ensure things stay on track.

Through Failure to Think Through Integration

Your team needs to be thinking through smooth integration at every step in the M&A process. Failure to properly integrate, and thus inadvertently create an inefficient work environment, is perhaps the most famous of all M&A failure culprits. Integration is something you need to plan out in detail before, during, and after the M&A.

There’s too much that goes into this process to list it all here, but at the least, you need to think about short and long-term needs, benefits, and processes when it comes to hiring, look at redundancies and plan out layoffs and severance, evaluate what technology you’ll need for merging systems and organizing things, and develop a training plan and new review procedures.

Keep Project Efficiency on Track

A lot can go wrong in an M&A, but when things go right, your business will thrive. Talk to us at Project Genetics about how we can help: we’re a proven leader in project management solutions, and we can keep yours on track.

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