#Asia Preparing for a merger or acquisition? Here is what you can not afford to ignore


While it is essential to put forth a solid timeline and communication plan; at the end of the day it boils down to leadership


For a lucky and successful Founder, their company may have reached a mature-state stage — giving optimum performance with a positive company culture. The current success might seem like a far cry from the early startup days, when the company had very little resources.

The business is now catching the eye of other organisations interested in merging or acquiring the startup. While the advantages from a successful mergers and acquisitions are many, a lot can also go wrong during the cumbersome process.

Usually, the two main stumbling blocks for an unsuccessful M&A are accepted to be poor culture and human capital issues.


Human resources play a vital role in ensuring the fluent transition of your business during the process.

A well oiled human resources team will ensure a success cultural integration, effective communication and easy change of management. It is all too easy to be flippant about, or actually undermine, the value of human resources in the process of M&A.

Leverage the HR skillset, and while doing so, ask the following questions.

Is Your Partner Firm a Good Cultural Fit?

It has been found that a key to a successful merger is when the culture is similar. It goes to show that like-minded people get along well and have a better chance of prospering together.

Finding a company with a similar culture as yours will definitely benefit you in the transition phase and the distant future as well.

So make sure that the company you are going to merge with is a good match, and if not, are they willing to make a few changes to on board your community?

sign the deal FINAL

So how could it be ascertained whether the two entities that are coming together will be a good cultural fit? Either company could conduct surveys among each other’s employees, where such questions as how they like the work in the company, what kind of environment they prefer working in and their suggestions for the betterment of the organisation, could be asked for.

Other than this, there could be leadership interview or focus groups to understand the interests and cultural mindset of the concerned companies.

Also Read: How to make the most of a weekly team roundup

Cultural alignment isn’t something that could be taken for granted. This is a step you want to pay utmost attention to because if you get it wrong, it could spell disaster for your organisation. Therefore, it’s best to sort out beforehand. whether the two cultures will sync well with each other.

Communication plan

Secretary FINAL

In a merger process, a communication plan is just as important as the need to check for a cultural fit.

Founders will need a coherent and sound communication plan to ease the concerns, distrust, and assuage the fears of employees as the company changes.

Some employees might be totally unaware as to what will be expected of them in the new merged organisation, so briefing them on what might come next is important.

In fact, have your entire HR team come to the table, and explain the future course of action to the team. Present a timeline and describe the responsibilities of everyone.

But, some confidential information must be privy only to a selected staff, and not break it out to everyone until the time is right.

Some of the key points to keep in mind

  • Who should know about the merger?
  • Who and what will be affected and to what extent? This may include everything from processes and deadlines to rescheduling of job assignments.
  • What will be the form of communication? Print, email, general announcement, formal letters, website, press release or social media? This will depend on the type of audience, and how formal your wish to be in your announcement.
  • For some critical information to be circulated, the Founder will need the help of attorneys — to ensure that every detail is correct and accurate, aligning perfectly with the merger agreement.
  • In addition to this, it is important to describe the milestones to be completed, along with their deadlines.

Preparing a communication plan and a timeline helps see off the transition phase without much discomfort. It gives clarity and vision to leadership and employees feel reassured that the company is taking note of issues that concern them most.

Focus on the management team leading the change

How managers interact with your employees and manage the change process can prove to be the difference between the success and failure during an M&A.

Also Read: Three years on, how has Uber impacted Singapore?

However, there is no definite way of preparing a timeline, it is dictated by the needs of the M&A, which could be as follows:

  • How will the organisation chart of the merged organisations look? Ascertain the job titles and the reporting hierarchy.
  • Are there right people at the right job? Will the necessary managers understand their key roles?
  • Is there a need for reorganisation? Are there any positions that are overlapping?
  • The compensation philosophy of each company; and if you’ll be adopting the benefits and payroll systems of the acquiring company, this will be essential to communicate with the employees.
  • What will be the performance evaluation and reward system? Is there a need to perform a skill inventory or audit of your current staff?
  • To introduce employees to the new company  brief them on such topics as its history, culture and processes. To further allow for blending of cultures, there could be a welcome-breakfast sponsored by the acquiring company.

In the end, everything comes down to leadership

Even with meticulous planning to prevent against an unforeseen hiccup, the success and the failure of the M&A could largely hinge on the Founder’s leadership.

While clearly the financial and legal details will be time-consuming, leaders always need the backing of a strong human capital guidance system.

Try to be thoroughly accomplished in preparing the communication plan, timeline and the transition plan. And make extra care to ensure it does not forget to include your workforce.

This may seem like a monumental task at first, but it’ll be worth it in the end to ensure the success of the deal!

The post Preparing for a merger or acquisition? Here is what you can not afford to ignore appeared first on e27.

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