Integration Success- Beyond the Numbers

A wise man once said that all business problems are people problems.  Never has that been more apparent than when we look at post-merger integrations, 75% of which fail due to people problems (Deloitte.)

 

We have a client with an aggressive growth plan over the next several years, one that includes many acquisitions along the way in order to be successful and hit their goals.  Plans are often drawn up with beautiful anticipated growth lines going upwards and to the right.  But, it’s rarely the WHAT that becomes an obstacle to success, it’s almost always the HOW… and that’s where people come into play- the How, the Execution of the plan, etc…

 

We’ve worked with other clients in the Private Equity space that have integrations down to a science.  They can do everything correctly in their process: due diligence with all the numbers, communication, clarity, transparency, inclusion, and yet still experience integration failure.  Why?  People– it has to do with fit, culture differences, job match, undeveloped potential, or the lack of discretionary effort.

 

But one integration failure could prove devastating to our client with the aggressive growth plan.  So how do we take the guesswork out of creating integration success?  We need to decode the human, create a common language, and create actionable awareness.

 

Workforce analytics (specifically The Predictive Index) can create the necessary awareness, along with an action plan and guide for how to leverage the existing workforce and match it to optimal job performance.  Our client has created benchmarks for what comprises an ideal leadership team of the entities it acquires down to the level of what drives the individual in a given role to how quickly they learn and adapt to change in a complex environment.

 

Not only does this expand communication during the integration, it enhances the selection criteria, and provides the objective data required to coach the gap/fit, which increases retention, saves time and money, and improves the overall success of the integration.

 

Integration failure costs millions of dollars, decimates businesses, and displaces thousands of employees.  Analytics create awareness.  Utilizing workforce analytics informs every step in the integration process with objective actionable data.  Without data on the workforce, companies are flying blind and relying on the WHAT of an integration plan, knowing full well that it’s the HOW/workforce that derails integration plans, no matter how much due diligence has been done on paper.

 

To review, The Predictive Index can be utilized in Merger and Acquisition Integrations to help the Buy Side with:

 

  1. Establishing benchmarks for key leadership positions for success during and after the integration.
  2. Measuring what drives the individuals in those leadership roles to coach the gap/fit to optimal job performance.
  3. Obtaining data on how quickly team members learn and adapt to change in complex environments.

 

As valuation expert Dave Bookbinder of EisnerAmper says in the #1 Best-Seller, The New ROI: Return on Individuals, “the value of a business is a function of how well the financial capital and intellectual capital are managed by the human capitalso you’d better get the human capital part right.”