With many businesses reluctant to pass the baton on to the next generation of talent, along with a widespread increase in buyer interest, there is a robust M&A market for engineering and construction companies.¹

But an increase in M&A activity alone is not enough when integrating an organization’s people, culture, and processes. A well-executed integration plan continues to be a leading factor in deal success.²

Why an Integration Plan?

Without a clear plan to integrate two different cultures, a way to motivate and align two different sets of people, and a method for streamlining the integration of two different systems and processes, it is unlikely an M&A will succeed.

Accordingly, a recent survey found that only 14% of all respondents felt their deal exceeded initial expectations for income or rate of return. Cultural alignment was cited as the differentiator for success, often being more impactful even than having the correct valuation or deal price.³

A successful integration plan is thoughtful with many moving parts – leader integration, establishing processes and procedures, outlining technology needs, and incorporating cultural nuances, among others.

Knowing whether your company’s goal is to integrate, operate, or create a combination of synergies between the organizations will determine how the people, culture, and processes will be streamlined following the close of the deal.

Complete integration (removing the former identity of an acquisition to form one larger organization) requires the assimilation of all aspects of the business – including processes, culture, and branding. Another successful option is to operate companies that are acquired; that is, the parent company provides oversight to the company acquisition without drastically changing its identity.

Whether an organization chooses integration, operation, or a combination, focusing on what that means and how it is instituted ultimately determines the success or failure of the deal.

Establish Your Integration Team

M&A challenges lie in identifying the areas of value and risk that will determine where integration should take place and what should be preserved from the original corporation. Here is a partial listing of areas to consider that include not only the strategies, but also the people involved in the integration:

• Purpose, vision, and values
• Culture
• Strategy
• HR
• Communications
• Finance and accounting
• Facilities and equipment
• IT
• Legal/corporate governance
• Business development
• Project delivery systems
• Joint ventures/alliances
• Subcontractors
• Suppliers

One of the first steps for integration is to establish a team that will be responsible for championing the integration efforts.

While everyone in the company will play a role in integration, it is essential to have key leaders who serve as visible examples of the integration and are responsible for overseeing the process. Far too often, organizations either take an “everyone is responsible” approach or centralize responsibility in one or two people at the top. The team must be clearly identified and given authority to move forward with the integration plan.

The integration team members must be decisive leaders who possess both strategic and process skills, understand their respective organization well, and know the importance of a successful integration. To provide a developmental opportunity, many companies will choose “rising stars” to comprise this committee as these individuals are likely highly motivated.