9 Fatal Operational Pitfalls During Post Merger Integrations (and how to avoid them)

A post-merger integration (PMI) presents a complex challenge: How can you successfully integrate systems and product suites, migrate and configure data, meet aggressive timelines, and exceed demanding expectations — while managing possible culture clashes, egos, and critical relationships?

Let’s ask the experts.

During a recent OpFocus Advanced RevOps event, seasoned PMI leaders, Susan Whittemore, Head of Revenue Operations at TeamPay, and Jim Parker, Senior Growth Advisor at OpFocus, shared examples of post-merger integration pitfalls and how to navigate them successfully.

In this takeaway post, you’ll get all the critical insights from their discussion in 7 short minutes and walk away with a clearer understanding of how to combine tech stacks, data, products, and processes to achieve your larger M&A goals.

Let’s dive in.

Post-Merger Acquisition Pitfall #1:

Underestimating the human factors involved in an acquisition

Post-merger integrations are exciting, but the immense challenge and uncertainty can also be stressful and anxiety-inducing for individual team members. There are also established relationship dynamics, biases, and cultural differences at play.

These human factors can be a huge source of costly friction at the beginning of a post-merger integration.

Remember, when leading a post-merger integration, it’s essential to keep everyone engaged and rowing in the same direction. You need productive collaboration to effectively identify pitfalls and opportunities — in systems or manual processes.

“Change all starts with emotion.”

Susan Whittemore, Head of Revenue Operations at TeamPay

So, be human. Work to understand people’s situations and how they feel. Show kindness, appreciation, and empathy. Find common ground and build meaningful relationships. 

Set yourself up for success by finding ways to reduce friction and increase engagement — it’ll pay off in spades.

Post-Merger Acquisition Pitfall #2:

A lack of shared clarity across the entire organization around the intentions of the acquisition

The purpose of the merger should set the direction of the integration and underpin every critical decision during the process — including decisions about strategy, people, processes, and technology. 

As a result, everyone involved in making the post-merger integration plan a success must have a crystal clear understanding of the overall purpose and direction of the merger. But if leaders don’t define this purpose and communicate it often, team members will develop their view of what’s important.

So, what are the reasons underpinning your post-acquisition strategy? 

• Are you trying to increase market share?
• Do you want to broaden your product portfolio?
• Are you aiming to cross-sell to acquire additional customers?
• Are you trying to realize economies of scale?
• Do you want to incorporate a new licensing model?

Whatever it is, communicate it.

“Communicate and keep communicating. Make sure everybody on the team understands the purposes of the merger. Be very transparent — as much as you possibly can.”

Jim Parker, Senior Growth Advisor at OpFocus

It’s also a good idea to create a documented charter of the integration’s reasons, goals, and purposes that serves as a unifying north star and that everyone can refer back to frequently. This type of document is especially useful during key decision-making moments to ensure priorities and trade-offs are navigated in alignment with the original intentions behind the integration.

Bottom line, clarity reduces friction and paves the way for a successful post-merger integration.

Post-Merger Acquisition Pitfall #3:

Lack of adequate discovery (beyond financial/legal due diligence)

Post-transaction, there’s often a lack of adequate discovery around what’s required to bring two or more companies together.

What’s more, thoughts may creep in and undermine the drive to plan thoroughly — thoughts like, “This should be easy because our businesses are very similar,” or “The business that we’re acquiring is pretty small, anyway.”

Don’t let your guard down.

“Particularly from a leadership standpoint, it’s easy to underestimate the amount of work required to bring two companies together.”

Jim Parker, Senior Growth Advisor at OpFocus

Instead, dig deep and make sure you thoroughly understand how much work is involved. Take the time to find out:

• What is the impact of the merger on existing customers, renewals, contracts, revenue reporting, systems, processes, people, etc.?
• How do the business’s go-to-market models differ?
• What can you do to merge two potentially disparate business processes across go-to-market and financial processes?
• What parts of each organization’s tech stack will you keep, combine, and discontinue?
• How are you going to move and combine each organization’s data sets?
• What changes and improvements do you want to make as you bring the companies together?
• How might you enable the sales teams to sell each other’s product catalogs (if that’s part of the plan)?

Spend time learning about the other company’s way of doing business before finalizing a post-merger integration plan. For example, it can help to compare contracts from each business or compare ‘a day in the life’ of each company’s salespeople.

Ultimately, if you fully understand the work required, you’re empowered to create a robust post-merger integration plan.

Post-Merger Acquisition Pitfall #4:

Not creating a detailed post-merger integration plan

Once you understand the work required to integrate the companies successfully, it’s essential to create a detailed post-merger integration plan.

Remember, a post-merger integration is a demanding project like any other, requiring proper scoping, planning, and managing. Ideally, you should also have a dedicated project manager who will own the post-transaction integration activities, manage structured timelines, and ensure deadlines are met.

Start with existing deadlines — I.e., What has the board or management team committed to delivering? You can use these deadlines to reverse engineer the initiatives required to hit them.

Once you’ve defined what you need to do, define realistic timelines for each initiative. At this point, it can help to be conservative in your approach — remember, most team members have to keep up with their day job while contributing to integration activities.

Ultimately, a clear and detailed post-merger integration plan should unite everyone’s efforts around common goals and facilitate efficiency. It should also ensure that teams always contribute to the overarching strategy, even when focused on the minutiae.

Post-Merger Acquisition Pitfall #5:

Not harnessing the power of playbooks

Most companies have playbooks — perhaps there’s a playbook documenting the company’s sales motion, their go-to-market motion, or their ICP. Although these living documents might be half-finished, they likely still contain invaluable insights into what each team has learned.

So, work to understand existing playbooks thoroughly. And then use them as a starting point for developing new playbooks that incorporate the best aspects of each company.

Playbooks also provide an effective way to define, document, and develop a shared understanding of the company’s frameworks and methodologies. You can also use them to normalize company language and definitions. Plus, they can improve team confidence and operational efficiencies.

“Playbooks allow us to make better and quicker decisions on what we’re going to give, merge, buy, or ultimately, rip out of the org.”

Susan Whittemore, Head of Revenue Operations at TeamPay

Additionally, playbooks are particularly helpful if growth through acquisition is part of your company strategy, as they prevent you from reinventing the wheel. You can use them to develop robust frameworks that you constantly update and improve.

“If you don’t have a change management framework, get one — or hire someone that can help you with it.”

Susan Whittemore, Head of Revenue Operations at TeamPay

Post-Merger Acquisition Pitfall #6:

Failing to integrate business processes, policies, data, and tools effectively

Ultimately, the purpose of the merger and acquisition integration process is to realize new value — as Jim puts it, “To get to ‘one plus one equals three.'” Of course, this is far easier said than done.

Sometimes business processes and systems are slammed together in an ad-hoc way. This can result in countless issues with customer communications, integrations, and bloated tech stacks. What’s more, when this happens, manual processes can begin to creep in, which amplify problems further as time goes on.

The lesson? Be the tortoise, not the hare.

Although speed is necessary, avoid the temptation to move fast at the expense of proper planning, management, and documentation. You don’t want to allow confusion to impede your progress — and you certainly don’t want to come back and rework things in the future.

Instead, identify every available opportunity and the specific business challenges you’re facing, and then map your moves confidently.

“Take the time to thoughtfully bring the two company’s business processes and technologies together in a way that produces new value.”

Jim Parker, Senior Growth Advisor at OpFocus

When it comes to integrating tech stacks, it can help to bring in experts who’ve done it countless times before to guide and implement the nitty-gritty aspect of the process. 

A post-merger integration consulting firm like OpFocus can not only help you realize more value from your merger, but we can also ensure that you avoid countless costly and time-consuming mistakes.

Post-Merger Acquisition Pitfall #7:

Taking shortcuts with data

During post-merger integrations, there’s always a temptation to say, “We’ve got to move fast,” “We need people to start cross-selling immediately, so let’s share customer lists,” or “Let’s just put the data in the system and come back to clean it up later.”

Don’t.

When it comes to data, there’s no such thing as a shortcut — and trying to create shortcuts will inevitably come back to bite you in the future. Plus, it could take forever and a day to get around to processing the data properly, and in the meantime, any shortcuts taken will likely:

• Create data issues that plague customers, employees, partners, etc.
• Put growth with new customers and expansion with existing customers at risk
• Severely limit revenue reporting abilities
• Undermine the goals of the merger in a myriad of ways

Here’s what to do instead:

“Analyze, dedupe, merge, and enrich your customer and prospect data before combining it. This is one of the most undervalued parts of the integration process.” 

Jim Parker, Senior Growth Advisor at OpFocus

Here’s the thing: With some automation tools and a little help from experts who’ve done this numerous times before, it’s relatively quick and easy to thoroughly analyze data sets to look for things like duplicate customers or contacts.

Remember, this is an incredible opportunity. Post-merger integrations are the perfect time to enrich and combine data sets creatively to produce a more impactful and complete data set.

“When all is said and done, get the data right. And if you don’t have the bandwidth to do it, hire someone to do it in tandem while you’re working on everything else.”

Susan Whittemore, Head of Revenue Operations at TeamPay

Post-Merger Acquisition Pitfall #8:

Not preparing or training end-users for process and system changes

Training and development are at the core of change management. 

Without adequate training, it doesn’t matter how great your system integrations are — users won’t be empowered to harness the potential available.

So, include training and support in your post-merger integration plan.

Remember, people are busy and have countless distractions and tasks on the go, so make training programs consumable and informal — make it easy for users to adapt and learn.

To do this, try to understand how people prefer to learn and build training programs that cater to their preferences. For example:

• Are they extroverted? If so, perhaps they would enjoy group sessions.
• If they’re more introverted, would they prefer more one-on-one time?
• Are they self-starters that prefer to lead their own development?

Top tip: People who already have the hearts and minds of others in the company are uniquely positioned to promote change. So, find these internal promoters and set them up to train their team.

“I have never seen enablement be adopted as fast as putting a user in that role to educate their team. There’s an appreciation when we have like-minded individuals showing us something new.”

— Susan Whittemore, Head of Revenue Operations at TeamPay

Lastly, no training program is perfect out of the gate, so be ready to iterate as users provide feedback and criticism. 

Post-Merger Acquisition Pitfall #9:

Expecting praise

This pitfall may be a little tongue-in-cheek, but it can be very helpful advice for those in operations, I.T., finance, or anyone else on the front line of post-merger integration activities.

Because let’s face it: Post-merger integrations can be arduous, challenging, and downright stressful at times. And sometimes, post-merger integration activities are thankless tasks. But never forget:

“You and your team are heroes — whether or not anybody sees and recognizes the work that you’re doing.”

Jim Parker, Senior Growth Advisor at OpFocus

Of course, if you’re in a leadership position, “Take time to reward, acknowledge, and express appreciation to the teams that are doing the really hard work of an integration — because it is hard work,” says Parker.

Finally, value team members’ opinions and experiences. Always ask for feedback and constantly evaluate the process to identify ways you can improve it next time.

Summary: 10 Essential Post-Merger Integration Tips

Post-merger integrations can be overwhelming, complex, and challenging. But there are common pitfalls that you can avoid with some foresight and planning. 

In summary, here is an 8-point post-merger integration checklist to help set you up for success:

1. Understand the importance of the human factors involved in a merger, and build meaningful relationships to reduce friction.
2. Create a shared clarity around the goals and purpose of the merger, and maintain this shared understanding at all costs.
3. Go beyond legal and financial due diligence — dig deep to understand how much work is involved.
4. Create a detailed post-merger integration plan with realistic timelines for each initiative.
5. Learn from existing playbooks and develop new ones to unite and guide team efforts.
6. Take your time — integrate business processes, policies, data, and tools properly, so you don’t have to come back to rework them later.
7. Analyze, dedupe, merge, and enrich your customer and prospect data before combining it.
8. Adequately prepare and train end-users for process and system changes.
9. Don’t expect praise, but go out of your way to acknowledge and reward others’ work.
10. Avoid reinventing the wheel — get help from experts who’ve done this countless times.

If you’d like support from a seasoned post-merger integration consulting firm, reach out to our tech stack consolidation experts.

At OpFocus, we have a stable of experienced experts — like Jim Parker — who will not only save you from countless pitfalls but also help you identify and manifest the unique opportunities available.