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If companies want to elevate their business from good to extraordinary, they need to utilize the power of M&A. From strategy to execution, everything must be aligned to get the best out of each transaction. In this article, Yogesh Gupta, President and CEO at Progress Software, shares his experience and best practices for master M&A execution for greater success.
“The success of a deal comes down to the execution post-acquisition and it requires initial analysis, expectation and goal setting, due diligence, and creating a thorough integration and execution plan before the deal closes. It’s a lot of preparation, but the more you do it, the better you get.” – Yogesh Gupta
Set Clear M&A Strategies
A sound M&A strategy starts with a deep understanding of the business’s current state. Leaders need a clear picture of where the company stands, what its strengths and weaknesses are, and which areas hold potential for growth. Only by assessing these factors can leaders chart a feasible growth path that aligns with both shareholder and employee interests.
An effective M&A strategy is built around serving customers better, boosting employee satisfaction, and adding value for shareholders. It’s about identifying and fortifying the core strengths of a business—doubling down on what works and minimizing wasted resources.
Conduct Rigorous Due Diligence
In M&A, diligence goes beyond assessing numbers; it’s about gathering a comprehensive view of the organization. Initial analysis and due diligence should validate assumptions and help create a roadmap for post-acquisition success.
A thorough diligence process should include multiple touchpoints with customers, product teams, and employees. Speaking directly with stakeholders and leadership can help verify initial assumptions, reveal potential blind spots, and ensure the most accurate picture possible.
Create a Robust Integration Plan
A carefully crafted integration plan is a cornerstone of M&A success. This plan should cover all functional areas, such as IT, HR, finance, and others. Integration planning should begin well before the deal closes. It’s important that the roadmap be agreed upon by all relevant teams, from general management to operations.
Post-acquisition success depends on aligning every functional area with the broader goals and ensuring that the team executing the integration knows what to achieve over the following 6, 12, and 18 months.
Ensure Cultural Compatibility
More often than not, M&A is all about people. The right cultural fit between merging entities can have a powerful impact on employee satisfaction, retention, and productivity. Analyzing culture fit early in the process helps identify possible challenges and establish integration strategies tailored to the unique traits of each company. A 1:5 or 1:6 employee ratio, for instance, ensures the culture of the acquiring company prevails, maintaining consistency and alignment with organizational values.
Transparent Communication
Transparency has always been the foundation for trust. The best leaders understand that honesty and openness, even about challenges, keep stakeholders engaged and motivated.
Building trust through transparent communication starts from the first conversation and continues throughout the M&A journey. Setting clear expectations, communicating openly about progress and setbacks, and providing consistent updates make stakeholders feel included in the process and align everyone with the organization’s goals.
In employee communication, transparency eliminates uncertainty and helps alleviate concerns around job security, ensuring employees understand their roles and responsibilities after the acquisition.
Embrace Agility and Adaptability in Integration
In every M&A deal, unexpected challenges arise. What matters most is how these challenges are addressed. Leaders who remain agile and open to new solutions can overcome integration challenges efficiently.
For instance, acquiring companies that serve government sectors or international markets often requires adjustments to governance and regulatory compliance. Agility means being ready to modify processes as necessary, embracing flexibility as integration progresses.
Adaptability also applies to employee management. When challenges with employee retention or cultural integration arise, as they often do, a quick response can make a significant difference. Leaders who are proactive in solving issues as they emerge, and who foster an environment of collaboration and resilience, can successfully navigate even the most complex integrations.
Build Lasting Relationships Through M&A
In the world of M&A, long-term success isn’t just about closing deals; it’s about cultivating relationships. Building trust with potential acquisition targets begins long before the first official conversation. CEO-to-CEO communication is a powerful tool for nurturing relationships and gaining a deep understanding of the goals and aspirations of potential partners.
Through patience and relationship-building, leaders can create meaningful partnerships that pave the way for future M&A success.