Few would disagree that Mergers & Acquisitions require a certain degree of optimism and ambition. But many companies, caught up in the enthusiasm for growth or strategic planning or … etc., focus on the upside and neglect to explore the potential for serious issues which can make an acquisition sub-optimal, if not an outright catastrophe.   

A good presentation goes a long way, and there’s no shortage of company founders that have Hollywood potential when the spotlight is on.  It’s even highly desirable to find companies with a talent for presenting well.  However, any potential acquisition – or sale – needs to look beyond the superficial to make sure the reality lives up to the appearance. 

M&A starts by measuring the easy stuff.

Acquirers often place great emphasis on exploring revenues, talent and market strength.  Those are all good things, but really just the minimum requirements for consideration. The analysis should not only include strategic fit and financial analysis, but an assessment of legal and liability issues, and potential conflicts between client bases as well.  But perhaps the most neglected important element is the cultural fit between the organizations.

But, can you really see yourself working with these people?

Developing an integration plan is a complicated process, and there are likely to be parts of companies that don’t align perfectly with your organizational structure.  What you absolutely don’t want to happen is for irreconcilable cultural differences or – even worse – personality conflicts to be discovered after you are three months into the post-deal integration process.

Most of us have gone on dates and realized, halfway through dinner, nope this is not going to work out.  Some don’t find this out until much later, having been blinded by the lovely, charming prospective partner while missing telltale clues of potential trouble – like the stack of unpaid bills on the table, the dented-up car or the house filled with cats.

There is no substitute for basic relationship-building. 

Spending some time with your future partner and their staff, interacting with them at a more personal level than “meet & greet dinner” can help to identify a seemingly attractive candidate who you ultimately would not want to be in the trenches with.  And that’s the key.  Relationships are easy when it’s all rainbows and sunshine.  But how does it work when deadlines are looming, clients are yelling, and you haven’t seen the kids in a week?

I had one client whose policy was to take project managers and higher job candidates out to dinner at a restaurant where he knew they would be treated poorly.  Not because he was training them for challenging life in the company, but to see how they responded to stressful circumstances.  We would never recommend spilling hot soup on a prospective acquisition candidate, but it’s always a good idea to know who your future partners will be after the honeymoon is over.

Looking for more tips on branch office integration or on successful acquisition integration?  Don’t miss out on these upcoming two-day Roundtables designed specifically for A/E/C firm leaders:

Mergers & Acquisitions Roundtable 

Branch Office Optimization Strategies Roundtable 

Space is very limited at these programs.  Register today!