Bringing together what is to become a new whole

Dr. Markus Braun, Head of Business Development and lecturer at the ZHAW School of Management in Winterthur, who is familiar with this problem in both practical and theoretical terms, identifies some critical points of integration management.

Dr. Braun, whether it's a merger or an acquisition, you say the first steps on the way to a merger are crucial steps. What is the focus of attention?
Markus Braun: On the integration design and information design. The integration process should be carefully mapped out before the contract is signed. This is a fundamental process that must be given critical priority. The information design must aim to make the vision and the expected added value of the merger clear, credible and comprehensible to the workforce, customers and suppliers. Rapidly creating transparency on all sides is the order of the day here. The basis for this is the prepared plan of how the integration project is to be set up and how the responsible persons in the operative key positions are to be determined. In the case of a merger or takeover, the immediate and delay-free transition from an acquisition project, which is usually highly confidential and driven by a small team, to the integration phase, which requires broad support, is particularly demanding. The confidentiality phases must transition seamlessly into a disclosing, carefully and consistently executed information project. In the matter as well as in the communicative behavior

What is the preferred focus of attention?
The decisive keyword here is personnel. Usually, in the phase just described, decisions are already made in quick succession in the merged new corporate entity, right down to low operational levels. This means that at the time of the due diligence, the audit, i.e. before the time of the merger, the personnel aspect must be examined in detail. Experience has shown that key operational personnel must be seconded to both companies in order to build trust and bridges between what are normally different corporate cultures. Internally, it is indispensable that a member of the management board with an appropriate steering committee behind him bears responsibility for the integration. Responsibility for integration must therefore be anchored "at the very top" in order to prevent, as far as humanly possible, aberrations in abrasive trench warfare.

Your experience teaches you that mistakes made at the beginning of integration management are particularly difficult to correct in retrospect. Are there any mistakes that are particularly significant?
I refer to what has just been said. The beginning is half of the whole. Thoughtful care in consistent steps does not prevent things from going wrong, but it does reduce the likelihood of them. If companies are satisfied with simply "throwing them together", if an integration is not carefully and consistently oriented towards the new corporate strategy from the outset, experience shows that it will be difficult, if not completely improbable, to achieve the desired merger synergies. The moment of change is, according to the ancient Greek concept of Kairos, the key moment. If it is not used immediately, thoughtfully and purposefully, it will have a detrimental effect on the entire project. In order to ensure this, it is crucial to manage an integration project with the most capable and loyal people and, as already mentioned, to locate the responsibility for integration "at the top

Integration management is a development process in the making. Which "adjusting screws" must be kept particularly in mind?
The adjusting screw "vision", the question: What do we want and how do we want what? More precisely: Which goals should we aim for? What competitive position should be achieved? We should also consider: In which new markets do we want to establish ourselves? The adjusting screw "selection process of the personnel for the key positions". The fair and rapid establishment of this group of people ensures that the understandable unrest in the workforce is kept in check. One consideration in this context should also be to use integration management for performance transformation in the new company by appointing junior managers to key positions. An overarching set screw, so to speak, is precise integration monitoring to keep things on track. A frequently overlooked adjustment screw for the successful integration process is the respectful treatment of the inevitable winners and losers of the reorganization. One thing is certain, only internally convinced employees will lead "the thing" to the desired success. As is ultimately the case with everything that has to do with management, wise leadership is the oil in the gearbox that can most effectively prevent wear and tear in every respect and thus make the efficiency of the new corporate unit most likely.

As is well known, the devil is in the details and ensures that things suddenly develop completely differently than thought and planned. Are there forward-looking control measures that protect against this?
A merger is, excuse me, a damn complex undertaking, accompanied by all kinds of imponderables. Surprises of all shades are simply part of it. So being naïve and saying "everything will be fine" has the quality of a nail in the coffin. In other words: The indispensable control measure is professional, but not dogged project management. Even detours lead to the goal, as long as the goal is clear. The much-vaunted flexibility according to the old Latin motto "Fortiter in re, suaviter in modo" = "Strong in the matter, mild in the manner" is not a bad motto in this respect. So: define project phases, set interim goals and be prepared to adapt, but at the same time proceed quickly in the matter at hand. And integration monitoring, keeping a careful eye on the process.

Where something should and must change, rumors flourish. The hottest place in the merger process is always the rumor mill. This raises the questions: How to deal with it?
Offensive! Rumours are simply part and parcel of an integration process! BUT: They can be kept in check by providing decent information and recognizably deliberate and speedy decisions. Opacity and fickleness are the best rumour fodder. Nevertheless, with every effort to please everyone, this desire is also an impossibility here. The important thing is awareness: Workforces are unsettled in a merger process, and this must be taken into account. This must be taken into account, for example, by appointing credible decision-makers with a proven track record to key positions; by making and justifying decisions that are coherent and comprehensible rather than half-hearted. Coherence and credibility, both personal and factual, and communication "at eye level" should be the guiding principles in dealing with rumours. For me, the magic word in this regard is: Take it with you! It is forbidden to take people by surprise, to mislead them, to leave them in the dark!

A very hard sticking point in the integration process are the double positions with the question behind them: Who goes, who stays? Which criteria apply here?
With regard to the management positions in the merged company, as already indicated, the criteria are professional ability, integrative skills and human loyalty. These are the three decisive yardsticks for the new managers in the merged company. The well-known "loudspeakers" should be viewed with caution. Being able to play to the fore is not necessarily a mark of quality. Analytical skills, farsightedness, creative power, the willingness to listen and to seek advice are the personal qualities of managers that are needed in the highly complex events of a merger. We strongly advise against a selection procedure with double appointments in key positions, i.e. an "on-the-job" elimination race. Experience has shown that such a "duel" does not so much identify the really best as the best self-promoters. A direct competitive situation among executives in the same organizational box promotes individual positional bias much more than effective and integrative action on behalf of the merged company. And if anything is needed in today's workload and competitive environment, it's experts at skills, not experts at frothing at the mouth.

For further reading:
Stephan Bergamin/Markus Braun: M&A: Erfolg dank Integrationsmanagement. Verlag Neue Zürcher Zeitung (NZZ Libro), Zurich 2015, 135 pages, CHF 51.