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Why do some mergers and acquisitions fail?

When two business entities combine into one, there are bound to be “pain points.” Whether the companies have been friends, rivals or complete unknowns, the process is full of risks that can end up derailing a perfectly good plan. In other words, just because it looks good on paper doesn’t mean it’ll work out.

That doesn’t mean you should avoid all the careful planning ahead of time. In fact, doing so can help you dodge crucial mistakes as the plan takes effect. According to an article in The Wall Street Journal, it doesn’t take more than one of these integration mistakes to delay the successful merger and damage the new company:

Not being well prepared and not taking the time to create an extremely detailed integration plan. Sometimes mergers and acquisitions are rushed due to fear of competition; if this happens, the lack of details can come back to haunt you.

Not paying employees right after the merger because it’s not completely finalized. Put yourself in the shoes of an employee who’s worked at a company for 10 years and suddenly learns everything has changed. Not getting paid on time sends him a strong signal that this new, merged company doesn’t care about its employees.

Leaving key employees in limbo. Once word gets out about the merger, other companies will assume that duplicate roles will mean a reduction in staff. Headhunters will also start contacting employees, assuming they may want to make a move, given the uncertainty. A smart move would be to figure out a new organization chart as soon as possible and assure the talent you want to keep that they are an important part of the plan. (And will be well compensated to stick around.)

Getting so involved in the integration that other, important aspects of the business fall by the wayside-especially customers. While a merger may attract a lot of attention, which seems positive, spending too much time on the business of it detracts from your main goal: serving your customers, both old and new. They’ll need extra assurances, just like employees, that they will continue to be important to you.

If you can avoid these mistakes, you’ll be laying the groundwork for a successful merger. An attorney with experience in mergers and acquisitions can offer valuable and strategic help.