MERGER INTEGRATION ROADMAP
Alignment is a complex, multidimensional problem.
And it is exponentially more complicated when trying to merge two organizations.
The twelve components of the Drive One Direction® methodology (which we call “The Twelve Accelerators™) provides a clear roadmap for merger integration.
On the day the merger is announced, you have two of everything: Two companies. Two executive teams. Two cultures. Two visions. Two sets of core values. And more.
The goal is to create ONE of everything ... and truly become One Company.
Each component of the Drive One Direction® methodology starts with the word “One.”
One Team. One Vision. One Strategy.
Systematically working through these twelve components will accelerate the integration process.
ONE COMPANY
Every company has a culture.
After a merger, you have two of them!
And these cultures are rarely in harmony—they’re often a patchwork of silos and divisions, each fiercely protective of their own turf. The challenge is to fuse these into one unified force.
It’s like the motto of The Three Musketeers: “All for one and one for all.” But in a merger, it often feels more like, “All for me, and none for you!”
That’s why the first step in merger integration is building a One-Company culture—a culture that unifies everyone under a shared purpose.
Bain & Company research shows that only 10 percent of companies truly achieve this.
In a merger, culture eats strategy for breakfast, lunch, and dinner. The companies that fail to unite will face constant infighting, while those that embrace the One-Company mindset can unlock the full power of their combined talents and resources.
Has your newly-merged company embraced a One-Company culture?
ONE TEAM
Before the merger, each company has an executive team.
But as soon as the merger is announced, everyone starts jockeying for position.
Post-merger, your new executive team must come together as One Team. They are ultimately responsible for aligning not just the new organization, but the merging of two distinct cultures, strategies, and stakeholder interests.
The executive team must lead by example, embracing alignment as a critical, non-negotiable initiative.
They must align divisions, departments, and geographies from both legacy companies.
They must harmonize the interests of multiple stakeholders—investors, creditors, employees, boards, customers, governments, and communities—all of whom may have competing priorities.
They are responsible for merging strategies, tactics, goals, and initiatives into a coherent One Plan that integrates both companies’ strengths.
Finally, this new executive team sets the tone.
If they can’t align as One Team, the rest of the company will never follow. A misaligned executive team guarantees that the merger will fail.
Is your new executive team committed to truly operating as One Team?
ONE VISION
Before the merger, each company has a vision.
After the merger, you have double vision!
To unite two companies, you must create alignment with One Vision.
Without it, you can’t build a unified organization—especially when every legacy division has its own idea of the future.
There are many ways to craft that vision. It might be “visionary,” “inspiring,” or based on a “company ambition” or a Big Hairy Audacious Goal (BHAG). But whatever it is, you need to make the case for it.
Every executive, not just the CEO, must passionately articulate this new, unified vision and explain why it was chosen. Of all the possible visions, why is this the One that will lead the new company forward?
Does your newly-merged company have One Vision?
ONE MISSION
Many companies struggle with mission creep.
After a merger, it is easy to have mission madness!
If you don’t align these missions, the newly merged entity will drift.
While the concept of a mission statement has been around since 1960, not every company has taken it seriously.
Worse, in a merger, many companies simply bolt two mission statements together without thinking through how to create One unified Mission.
Crafting a shared mission can be a grueling process. But a well-crafted One can serve as the North Star for the new organization, helping align everything from strategy to everyday tactics.
However, it’s not enough to just write a new mission statement after a merger. You must use it to guide both big decisions and daily actions. Everyone—and everything—must align with this mission, and anything that doesn’t must go.
Is your newly-merged company on One Mission?
ONE CODE
Every company has values.
But in most cases, those values are just words on posters.
Of course, if values are to create alignment after a merger, they must be more than just a list of words on posters. The two companies must take a long hard look at each set of values and determine which ones will guide the new entity.
They must become your One Code—one integrated value system that merges the best of both legacy companies.
This One Code must be communicated passionately, lived by executives, and demonstrated at every level. Hiring and firing should reflect these values, and behavior that violates them must not be tolerated.
These values must permeate every process, every decision, and every action. They should guide your company in times of crisis and help leaders navigate tough choices.
Core values may not show up on a balance sheet, but they can be the most valuable asset in a merger—if they aren’t just words on posters.
Does your newly-merged company have One Code of conduct?
ONE STRATEGY
Before the merger, each company has a corporate strategy.
But most people don’t understand either one.
In a Strategy& survey, 80 percent of executives admitted their strategy wasn’t well understood within their own company. Obviously, this problem increases exponentially after the merger.
To simplify the strategy integration process, SHIFTPOINTS focuses on five critical questions that must be answered to bring clarity:
- Which market segments should you target?
- What products and/or services should you sell?
- Where should you compete?
- How much should you charge?
- What is your business model?
Answer these questions clearly and precisely, and you’ll start creating the clarity needed to align your newly-merged company.
Has your newly-merged company aligned everything into One Strategy?
ONE THING
Every company does lots of things.
After the merger, you do even more.
Sadly, most companies never become truly great at anything.
In 1990, C.K. Prahalad and Gary Hamel introduced the idea of corporate competencies. They argued that companies must focus on core competencies. But many companies miss the mark, trying to be world-class at everything and failing to excel at anything.
Strategy& echoed this by warning companies against pursuing excellence in silos. The result? A diluted focus that prevents true greatness.
To stand out post-merger, you must find your One Thing—the one competency that will drive your Differentiating Competitive Advantage.
Complete this sentence: “As a result of the merger, we have the opportunity to become the best in the world at ______________.”
If you can’t fill it in, your company will struggle to achieve the results the merger promised.
Is your newly-merged company differentiatingly great at One Thing?
ONE BRAND
Before the merger, you had two company names.
And two logos. Two taglines. Two color schemes. And more.
One of the most challenging—and emotional—components of merger integration are the conversations around branding.
In some cases, one company has the better brand name and persona, so the new entity adopts that. The other company’s name and brand goes away.
However, in most cases, there is some kind of “mashup.” For example, a combination of the two company’s names. Or you use one company’s name and the other company’s logo.
Getting this right is critical
First, your new brand must be an umbrella. It must unify your combined products, services, and geographies. It must resonate with all your stakeholders.
Second, it must identify who you are and differentiate you from your competitors.
Lastly, your corporate brand must be a magnet. It must attract the right people—employees, customers, partners, investors—to your newly united company.
Does your newly merged company have One (inspiring) Brand?
ONE WAY
Every company has corporate standards.
But after the merger, you must decide whose will prevail.
Corporate standards can apply to many aspects of business, including:
- Your unique way of doing business
- Mission-critical business processes
- Policies or rules
- Dress codes
- Software applications
- Office layouts and furniture sizes
- And more...
When something is a corporate standard, it means everyone follows the same procedure, no exceptions. But while standardization drives alignment, we advise finding the right balance.
After the merger, you must choose One—and Only One—Way of doing things for the new entity. This could be as simple as agreeing on One method to complete an expense report or as critical as determining One approach to perform life-saving procedures.
Has your company identified your One—and Only One—Way processes for the merged entity?
ONE PLAN
Before the merger, each company had a plan.
Now, the two must become one.
To create alignment, the new entity must create ONE cohesive plan that drives the new organization forward. This is no small task—merging two sets of priorities, goals, and strategies into a unified vision for the future takes tremendous effort and careful decision-making.
Before the merger, each company likely had its own approach to planning:
- Two sets of financial targets
- Two different growth strategies
- Two separate operational models
- Two different ways of allocating resources
- Two different views on market priorities
Now, you must reconcile these into a single, unified plan for the new entity. Every detail must be synthesized, from high-level strategy to day-to-day operations.
The end goal is to have One Plan that unites both organizations behind a common mission that aligns resources and initiatives, and One Budget that ensures every dollar is spent in alignment with the new priorities.
Has your company united behind One Plan?
ONE DESIGN
Before the merger, each company had an organization chart.
Now, you must rearrange all the boxes.
Some companies divide by product line. Some divide by geography. Some organize by function. Some create standalone business units.
So, the first decision is how you will organize the new company. By product? By market? By function? By geography? Some other way?
Once your company has decided, it is a long hard slog to fill in the details. These are emotionally charged decisions. For example, you have two CFOs … but you only need one.
Then, you must operationalize the new structure. Departments must figure out how to work together. Decision rights must be clarified. People must know what they are supposed to do.
Many companies exacerbate the alignment problem by constantly reorganizing. Every time your company reorganizes, the alignment operating system must be rebuilt.
Does your organization structure create strategic alignment?
EVERYONE
Before the merger, each company had a unique workforce.
Now, we need everyone to become one big happy family.
This component of the Drive One Direction methodology is where the rubber meets the road. We must align EveryOne in the new company.
There are many things that you want everyone to align with. For example, you want everyone to:
- Align their behaviors with the new company’s code.
- Align their customer interactions with the new company’s brand promise.
- Align their decisions with the new company’s strategy.
- Align their actions with the new company’s way.
- Align their goals with the new company’s goals.
Of course, this assumes that you have clearly defined all those things.
After all, how can you hire people who are aligned with your vision if your vision is blurry?
How can you train people to accomplish your mission if you don’t know what it is? How can you incentivize people to deliver your brand promise if you don’t have one?
That is why the first eleven Accelerators focus on clarifying those things.
Is everyone in your company aligned as One?
SUMMARY - THE TWELVE COMPONENTS OF YOUR MERGER INTEGRATION ROADMAP
In summary, the Drive One Direction® methodology starts with The Twelve Accelerators.
Is your company "twelve for twelve?"
If not, we would love to work with you.
Finally, we have a big tool box of other "Ones" that can unleash the acceleration power of alignment.
For some companies, having One Target Market is part of their corporate core. For USAA, it is the military.
Others add One Price Point to their corporate core. For Dollar Tree, it is One Dollar!
Thus, we advise each client to start with The Twelve Accelerators and modify them to optimize their unique, One-of-a-Kind Corporate Core.
Does your company have a strong corporate core?
The alignment management SYSTEM (AMS)
Before the merger, each company had its own unique way of running the business.
These are the corporate equivalents of "the sausage factory."
After the merger, you face a crucial decision: Which operating system will guide the new entity?
Post-merger, the goal is to create a unified and optimized way to manage the business—a single operating system that aligns everyone around common goals.
To move forward as one, you must now decide: Do we adopt one of the existing systems, or create a new hybrid model that combines the best of both worlds?
In the classic Harvard Business Review article, “Mastering the Management System,” professors Robert S. Kaplan and David P. Norton emphasize the critical importance of a management system:
“Breakdowns in a company’s management system, not managers’ lack of ability or effort, are what cause a company’s underperformance. By management system, we’re referring to the integrated set of processes and tools that a company uses to develop its strategy, translate it into operational actions, and monitor and improve the effectiveness of both.”
The key is to choose One System that will provide structure, clarity, and alignment across the entire organization. When a company adopts a unified system, it creates a common language and process that speeds communication, reduces friction, and improves execution.
Has your company adopted One System to drive the business forward?
