The retail sector is busier than ever with continuous M&A activity and consolidations. Retail Sector reported M&A activity is up by 30% vs pre pandemic levels. The retail headlines this year have been mostly dominated by news of mergers and acquisitions: Asda and petrol stations giant EG Group are to finalise a £10bn merger, Next have bought Cath Kidston in a £8.5m acquisition and earlier this year Tesco bought the Paperchase brand.
With this endless game of real-life Monopoly, it is important to focus on the considerations for a smooth post merger integration process to minimise disruption for the people involved and manage the transition with fluidity.
Here are our top tips for a smooth post merger integration in retail:
- Plan your integration all the way. What does success look like and what will get you there? How will you measure along the way? How will you address and capture risks? Eleanor Roosevelt once said, “It takes as much energy to wish as it does to plan,” so use your energy and headspace to make your plan.
- Culture is key if you want to avoid attrition, demotivated teams and reputational damage. Culture needs to be managed proactively so take time to define your purpose, vision and values collaboratively. Although your people will clearly all have a passion for retail, you might be integrating teams with very different cultures so be sensitive to issues that arise.
- Clear communications & managing expectations from the outset means you will bring people through the transition with you. Make sure there is a clear and consistent narrative for the changes that are happening and for what this means for each team impacted. Any ambiguity in communication can cause turbulence. Remember communication is a two-way exercise so take the opportunity to continually gain feedback and act on it, listening to concerns, fears and quickly addressing false rumours will break resistance.
- Establish governance structures for the integration. Layout the integration workstreams (this could be your technical infrastructure, people, processes or data) and processes for mitigating and managing potential risks.
- Leadership. Everyone will be looking to the leaders to set the tone and lead by example. Be self aware and make sure you have the capability, tenacity and belief to lead the integration. Have a read of our blog “Successful Change Needs Strong Leadership” to find out more.
- Design the right Organisational Structure. Don’t be afraid to review and restructure to fit your future vision for the organisation, be clear on the purpose of each function across your organisation and look to avoid duplication from the outset. Your existing operating models will need to be reviewed and adjusted and aligned to deliver a new shared strategy.
- Address your systems infrastructure and review any legacy issues and technical debt. You do not want your technology stack to cause friction during the integration process. (Top tip: make sure you think carefully about how you are going to integrate your data!)
- Align your processes, assessing both commercial & operational ways of working. Retail organisations need to thrive commercially and have slick supply chain operations. Use this as an opportunity for process improvement and seek efficiency gains. Begin by using a process mapping workshop to highlight any misalignment.
- Get ahead by taking Change Management seriously. Harvard Business Review reported that between 70% and 90% of mergers fail during the post-merger integration. Remember change management is about winning the hearts and minds and not just robotically changing behaviours and ways of working. Assess training needs, capture ideas, engage with feedback celebrate successes.
At Nine Feet Tall we specialise in combining the power of people, process and technology. If you need any independent advice to smooth your post-merger integration, we’d be happy to chat through your goals and challenges. Get in touch today.
Source: https://www.retailsector.co.uk/640847-retail-ma-deals-up-30-since-pre-pandemic-times-study-finds/
