Wexxa’s Acquisition Services
Post-Merger Integration / People Due Diligence
Cultural clash and key people leaving the minute you acquire a company, are reasons why many fail on mergers and acquisitions. We put numbers and visualisations on the hidden core of a company – how people act and collaborate to perform. We identify key performers in the network, and how you can involve them for a swifter and profitable transition.
Case by Wexxa
6 months after the acquisition, the integration process was finished. Had they been successful?
Yes, acquisitions are hard work! The pressure is on the minute you enter due diligence, and it lasts throughout the integration process until you (hopefully) get return on investments.
Wexxa met with a large multinational tech. corporation just after they had finished an integration process. The process itself had gone according to plan, but they still lacked the synergy effects of combined offers and shared sales channels that they had hoped for. They felt like the people perspective had not been addressed. Several questions were asked; “Do people from affiliated firms connect across to realise synergies?” and “who are the key people to retain and involve for a swifter integration?”.
These questions are somewhat fluffy, yet very important to ask. Wexxa’s fact-based people analysis revealed otherwise hidden insights of who connects to whom in the two firms. Statistics and visualizations enabled a people perspective to make the right adjustments.
The two affiliated firms, identifiable as light blue and dark blue in the image above, were not very well integrated. People did not connect across to realise synergies. Only 2% in comparison to the benchmark of 40%. Moreover, we found that only people within management roles were connecting across – a heavy burden which created bottlenecks and slow progress. Transition from bottlenecks to directly established connections between the clusters were recommended to realise synergies.
Retaining and involving the right key people for a swifter transformation was another concern of the tech. corporation. Wexxa found, that only 2 of 10 people initially chosen as key integrators, were good choices. They only reached a small portion (~10%) of the organisation, which clearly had an impact on the transformation. Wexxa identified hidden key people – influencers that other employees turned to informally. We suggested a strategic approach of involving them, both for a swifter transformation, and to minimise the risk of key people leaving.
So, what’s the key take-away?