Beyond the M&A Deal: From Transaction to Transformation

Two years ago, a global professional services company acquired a niche player in one of its largest markets. A four-person team made the deal happen. Three individuals from the selling company’s senior management team and one from the acquiring company.

The acquisition had two main value drivers:

Integrate the highly specialized and knowledge-intensive services of the niche player with the multi-billion-dollar projects and contracts in the global company.
Expand their presence in a market with high growth potential.

Once the ink dried and the deal was sealed, the triumphant news echoed through the corporate corridors.

There were all smiles and happy faces – not only from the deal team but also in headquarters 8000 miles (equals 5000 kilometers) from where the deal was made.

Illustrative image what was shared in the real announcement about the deal team

Two years after this deal or acquisition, Innovisor was asked by this client to check the realization of the value drivers as part of an overall organizational network analysis of the global organization.

A red flag was revealed.

Two years after, there was still limited connectivity between the two companies. This was a red flag. Combining their skills and capabilities was crucial to win in the market.

Despite the deal team’s initial happiness, collaborative connections were still limited.

The three people in the deal team from the selling company were highly connected internally and with people from their legacy company but lacked connectivity with the acquiring company.

Visual: How the acquired senior management teams were integrated two years after the deal

The reality exposed by the organizational network diagnostic hit hard, highlighting a complete oversight of integrating it into the larger corporate family.

Aftermath…

The challenges faced by this acquisition generated valuable learning. A successful merger must move beyond a signature and transform entities into one cohesive unit. The global professional services organization realized it needed to change its Standard operating model from solely focusing on systems, processes, and procedures to also prioritizing people and relationships.

Firstly, leaders must embody the change they wish to see in the organization. Acting as role models, they need to extend their influence beyond the boundaries of legacy structures and embrace the new paradigms of collaboration.

Secondly, achievement in any endeavor, particularly within the complex landscape of mergers and acquisitions, depends on fostering the perfect environment for individuals to establish significant connections.

The organizational network diagnostic brought to light the importance of nurturing relationships and trust. As a result, the company has now incorporated organizational network diagnostics into all its future post-merger integration activities. As a result, they are transforming a transaction into a true transformation that goes beyond the celebratory handshake, recognizing that success is measured not only in financial gains but in the strength of disciplined connectivity!