In terms of M&A, too usually firms spin the wheel and hope for one of the best. However right here’s the distinction: integration is much more like blackjack than it’s roulette. You possibly can execute a wise technique that “stacks the deck” in your favor most of the time. Tilt the percentages towards success with the suitable tradition match, clear communication, and intentional integration.
In a single acquisition, the highest Mortgage Officer cared most about underwriting, however the buying firm’s pitch? “Higher tech and economies of scale.” It didn’t resonate. After a couple of weeks of struggling to get him excited in regards to the acquisition, we launched him to the Head of UW on the acquirer’s firm. She is an absolute powerhouse, and after one dialog together with her, his whole mindset across the acquisition circled. The buying firm already had what he needed, however they wanted to hear first, pitch second. That’s the distinction between taking part in good and taking part in blind.
Positioning issues. An agile luxurious lender, buying a reduction lender with inflexible, centralized programs is an uphill battle. Some producers thrive in a credit score union mannequin; others wish to make 150 bps at an IMB doing normal loans. Neither is mistaken however misalignment results in attrition, not integration.
What’s common is that each acquisition brings hidden resistance to vary. If staff really feel like they’re leaving a “scorching” desk for a “cooler” supplier, they’ll scatter. They should see a winnable recreation inside your organization, so give it to them early and infrequently.
Tradition beats ways, each time. It’s probably the most resilient power in any system. In case you fail to ship actual worth, to “stack the deck”, or to make the suitable strategic strikes, the deal worth will erode and your legacy staff will burn out.
Acquisitions don’t fail at closing. They fail in integration. So don’t gamble, work with an knowledgeable to create a profitable technique. Play the suitable recreation and stack the deck the place you may. Shift the percentages in your favor earlier than you play the sport.
Julia Brown is an M&A and integration skilled.This column doesn’t essentially replicate the opinion of HousingWire’s editorial division and its house owners.
To contact the editor accountable for this piece: [email protected].