Ensuring a Successful Merger or Acquisition

It is estimated that 80% of mergers and acquisitions that occur today fail to meet their initial expectations. This failure rate has been attributed to a lack of concentration on a key aspect of the integration process, cultural integration. Loyalty Factor works with firms undergoing a merger or acquisition to address this critical aspect of the integration process and ensure the growth and prosperity of the new entity.

Situation:

A large New Hampshire-based architectural firm wanted to grow its business by expanding its geographic base to include a fast-growing metropolitan area. The firm decided to acquire a smaller architectural practice located 1,500 miles away in northern Florida. The southern company had been owned and run by a sole proprietor for 32 years and was well respected in the area.

Challenges:

Integration issues were everywhere. Challenges included employee fears of decreased job security, concerns about operations and procedure changes, and vulnerability about their place and importance within the newly combined company. Aging employees worried that new managers would not value their tenure with the company. Younger employees were concerned about changes in their pay scale and benefits packages. Many employees felt uncomfortable and socially out of place with their new colleagues. Customers wondered if the work quality would remain intact and if they would receive the same level of service to which they'd grown accustomed.

Solution:

Loyalty Factor was retained to insure a smooth management transition and the development of a unified corporate mission and culture. Loyalty Factor consultants interviewed all of the managers within both firms and conducted employee focus groups, bringing employee concerns and suggestions for improvement and integration into the forefront. From the information gleaned, Loyalty Factor compiled a detailed summary of each company's strengths and areas for improvement and worked with management teams from both companies to outline a plan to capitalize on the strengths and ensure future growth and prosperity in both locations.

Within the integration process Loyalty Factor consultants provided support for all involved, acting as an objective source of information and working to help employees and managers develop improved policies and procedures while bonding as members of a new, unified team with one solid corporate value system. This process helped employees from both companies understand that the managers and new leadership valued their ideas and roles within the company. As employees saw their suggestions for program integration accepted by executives, they felt secure, regained enthusiasm for their jobs and worked to help the combined entity prosper.

Results:

Loyalty Factor consultants returned for two follow-up visits at the six-month and one-year marks. The results showed a unified, thriving firm that had maintained its most talented architects and managers, increased productivity at all levels of the corporate structure, and was serving a growing and loyal customer base.