Q: I recently acquired a second company and have started merging the two. Any advice on how to build one stronger, trusting environment to further grow our business?

Robert Gaskill, CEO, MOTEV

A: The history of business integration has taught us that this process takes a good deal of thought and effort. Initially, leaders think that they are integrating people. New organizational charts are drawn up and “right sizing” of talent takes place. This process has evolved into integrating cultures. Meetings are held, where people learn about each other and develop shared business goals. These efforts are necessary, but not sufficient.

The true integration comes in designing a business model all can agree upon and that clearly defines the value proposition offered to the customer, has an effective supply chain to optimize service, employs talent that believes in the value proposition and can be implemented and demands financial outcomes where all share in the requisite responsibilities and benefits of the integrated firm.

The work of integration comes in aligning these four factors. The value proposition is the leading part. It is defined as the bundle of products/services that caters to the requirements of a specific customer segment. This demands educating the customer on the value offered while solving the customer’s problems. The firm must ask itself how its offerings are tailored to the customer. An effective supply chain should make things happen in a way that provides the customer with a high level of service satisfaction at a reasonable cost. The firm’s talent demonstrates why the business model makes sense. Employees frequently observe the customer and can see how the firm can make the best use of its resources on behalf of the customer. To the fourth point, internal stakeholders need skin in the game to make the integration successful. Employees need to be accountable to each other, as well as to the customer. Expectations of the financial success of the integration should be clear to all.

When social change is very important to the values of the firm, continued inquiry of employees into the meaning of those values is essential. The process aligns with trends and values of society.

 

Jack Militello is a professor of management at the University of St. Thomas Opus College of Business.