Where have you seen mergers and acquisitions (M&A) fail when it comes to integrations?


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Senior Executive Advisor in Software, 10,001+ employees
There are some people whose approach to M&A is, "Let's just get them into our fold and then we will absorb them like the Borg." And the assumption is that they will assimilate and it will become a uniform culture. But that never happens. Then there are others who try to approach it from a value stream perspective or a lean perspective, and say, "For each function that generates value within the organization, let’s start combining them and get to a happy meal." They think, "We won’t touch all the systems, the culture will merge itself." That never works because you just have two different fiefdoms running. There is no common understanding and eventually it will become a toxic environment.

But the biggest frustration is when people go through all their M&A project plans and do everything in the waterfall way, and then in the last mile, they don't follow through to complete integration. They’ll say, "I've seen a project report that says the acquisition is going well, so I’ll declare victory and move on." And they never completely integrate. When you have two different active directory systems and you have to log in in two different ways and jump through jump boxes in order to get to a particular server, you're not integrated.
VP, Director of Cyber Incident Response in Finance (non-banking), 10,001+ employees
My team today has jumped servers all over the place; they've got to get from A, to B, to C. Some of it's intentional design, like segregation for security, etc. But some of it is because we didn't fully integrate. And that’s not even the biggest problem now because everybody's in the cloud. How do you merge clouds?
1 Reply
Chief Information Officer in Software, 1,001 - 5,000 employees

Because we're in the cloud, people tend to assume they’ll figure it out at some point and then they forget. But the technical debt and the security risk is so high that we need to really address it.

Chief Information Officer in Software, 1,001 - 5,000 employees
It can be a corporate engineering nightmare in terms of what the focus should be. I think the pre-acquisition focus should be: how do we go to market? Even if you're not going to do all systems migrations and data migrations that happen post-close, that’s fine. We often want to close the program when we have a handshake between the systems owners or business owners saying, "Okay, we agree. This will be our disposition plan. This is our end state. This is our date. These are the owners, and this is our commitment, and then we can call it done.” But that last mile is very critical.
Director in Manufacturing, 1,001 - 5,000 employees
It can be really difficult to understand who really has the knowledge in the IT team you just acquired.  Depending on the complexity and size of the environment, if large and complex, error on the side of retaining people a bit longer than you initially expected.  I was part of "being acquired" IT Team.  I disagreed with whom they decided to let go immediately.  Eventually we were able to overcome the loss of knowledge but it probably put the integration behind by 6 months.  I ended up staying with the parent company that acquired us, so in summary, it did work out, but it didn't need to be as painful as it was.    If you are the Acquiring Company, make sure you can really trust the people making the decisions on who stays and who goes.  It's rare for the most Senior Management making those decisions to truly know who the most valuable people are if they aren't their direct reports.  They just can't know everyone that well.  We were a 200 person IT department.  I know the CIO couldn't name all 200 people.  And the CIO's direct reports probably knew 90% of the names but not truly how valuable they are.  Retention decisions need to be push down in the organization as much as possible to the people who truly know what is going on.
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CTO in Software, 201 - 500 employees
Without a doubt - Technical Debt! It's a ball and chain that creates an ever increasing drag on any organization, stifles innovation, and prevents transformation.
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