A merger or internal consolidation should be fact-based and participative, not simply winners absorbing losers.

Challenge

When companies are acquired or merged, and when functions are consolidated, it should not be a matter of "winners" dominating "losers." Synergies and cost savings depend on integrating similar functions and capitalizing on the best of breed regardless of source.

Furthermore, the integration must occur without missing any commitments.

It's not enough to jam together groups with similar sounding titles. The specific deliverables (lines of business) within each group should be culled out and integrated with similar functions.

The only way to achieve this degree of precision is to get all involved leaders -- acquirors and acquirees -- to work together to identify what each organization brings to the table in resources and commitments.

Collaboration must be structured in a process that is methodical and equitable, and leads all participants to a consistent framework that makes the identification of redundancies and synergies apparent.

Solution

A structured integration process engages all participants in the following steps

1. Deconstruct their organizations into component "lines of business" using a consistent framework.

2. Define their organizations' products and services.

3. Define their commitments (projects and SLAs) as "sales" of these products and services.

4. Associate all costs (not just direct costs) with those sales.

5. Calculate rates, and identify best-of-breed by comparing rates across organizations for each line of business.

6. Use the definition of commitments and resources to structurally combine similar lines of business.

With documented frameworks, a well-structured process, and open participation, a merger/consolidation process can attain its promised synergies and savings, build morale, and establish an entrepreneurial culture -- all at the same time.

Comprehensive solution....

Other Resources

White paper: Mergers, Acquisitions, and Consolidations
achieving the synergies through a participative integration process