Successful Merger Synergies - How to Make it
Work
by Jim Estill
Published on this site: April 8th, 2006 - See
more articles from this month
"We tend to overestimate what we can accomplish in a
day and underestimate what we can accomplish in a year."
This is particularly true in the case of mergers or acquisitions.
Recently, a company I founded, EMJ, was acquired by SYNNEX.
Prior to that EMJ had acquired 12 other companies.
The following is a list of lessons I have learned on how to
do a successful merger.
- Challenge assumptions : Most management thinks
all companies work more or less the same. This is not true.
All businesses, even if they are in the same business are
unique. The differences tend to be subtle and therefore
easy to overlook. One assumption that is often made if a
company is struggling is that existing management is simply
no good and that it is easy for a "well run" company
to solve the issue. Usually it is not.
- Plan Plan Plan : Mergers and acquisitions tend
to be exciting. Sometimes the thrill of the deal overshadows
proper detailed planning. Plan every aspect from customer,
suppliers, staff etc.
- Plan for downside. One of the characteristics
of good entrepreneurs (and I think good business people
in general) is that they tend to be optimistic. However,
in higher risk situations, one always needs to look at the
downside and plan contingencies.
- Be flexible : Although we need to have a plan,
we need to be flexible and change the plan based on new
results.
- Always learn : one of the things that will makes
us successful as a company is to have a learning culture.
Part of our challenge in the integration was a blindness
of what could be learned.
- Persist. In the face of challenge, keep trying.
Persistence got us through the integration. Persistence
pays.
- And finally, think long term. It is the long term
that makes for a truly great company.
Acquisitions tend to go through phases. The excitement and
euphoria of the deal followed by the work integrating the
companies and usually disappointments that the results are
not as expected. But if the acquisition is planned well and
truly well conceived, a third phase happens, true performance and
synergy occurs.
"We tend to overestimate what we can accomplish in a
day and underestimate what we can accomplish in a year."
Jim Estill started his business from the trunk of his
car and grew into to $375 Million in sales before selling
it to SYNNEX. He is now CEO of SYNNEX Canada a $1 Billion
computer wholesaler. he is a regular blogger at
http://jimestill.blogspot.com
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