Agile Post-Merger Integration

Shortly after deciding to merge with a competitor in the medical-device industry, the head of a leading medical-device company announced that the merged firms would present a single face to customers within eight weeks of the deal's close. The responsibility to meet this short timeline fell on the sales groups of the two firms, which together included about goo sales representatives and several hundred million dollars of accounts. Integrating the two sales operations was especially challenging. In addition to the tight deadline, the companies, which were good performers with strong corporate cultures, differed on key dimensions. One firm was highly entrepreneurial with sales reps having considerable freedom to make sales; the other company was more formal with tighter controls on sales efforts. The firms reward and performance management systems also differed, making it impossible to compare the performance of their respective sales reps.

The leaders of the two sales forces moved quickly to address these differences and to jointly design a larger, stronger sales organization. They created a day-to-day activity plan for all the integration tasks that needed to be accomplished before the two-month deadline. A war room oversaw the integration process. It tracked sales performance, monitored competitors, and assured the retention of key managers and sales reps in response to competitor poaching

The sales leaders held a series of cultural awareness meetings, using a technology that monitors participants' responses in real time to help each side understand the other's culture. The meetings facilitated an appreciation of each firm's differences and strengths. This shared understanding helped the leaders envision a new sales model that embodied the entrepreneurial spirit and more formal oversight of the two firms. It would enable the larger, unified sales force to make more visits to physician offices while still focusing on hospitals.

Meanwhile, special teams assessed both firms' current and projected sales data and devised a system to directly compare the performance of sales reps. This provided an initial outline for how to integrate the two sales forces into a new territory structure that would service customers with minimal disruption to them and the company. In a series of workshops, the sales leaders made concrete plans for the compensation and benefits, training, and support functions needed to implement the new sales organization. This included assigning reps to sales accounts in the new sales territory structure and training them on the broader product portfolio. The sales leaders also held a national sales meeting for the combined sales force to help forge a new identity and culture.

The integration process involved constant communication and shared feedback among the sales leaders and with members and staff of the new sales operation. Customers were also kept informed about the progress of the merger to maintain their loyalty, while quick sales wins reinforced the wisdom of the merger among sales reps and customers.

Overall, these post-merger integration activities reduced many of the risks associated with merging two strong competitors. The new, combined sales organization was designed and implemented in a short two-month period, while retaining top sales talent, training and reassigning sales reps, and serving key customers. These positive results attest to the post-merger agility of the medical device company. They highlight the strong leadership, constant and widespread communication, and active involvement of all stakeholders that are essential for post-merger success.

1. Which of the following was NOT a major challenge for the post-merger integration of the two sales groups?

a. Differences in rewards and performance management systems

B. A declining economy

c. Differences in formality

d. A tight deadline

2. Which of the following were key elements of the post-merger integration process between the two sales groups?

a. A war room

b. Strong leadership

c. Constant communication and feedback

d. All of these are correct.

3. Which of the following was not a result of the post-merger integration process of the two sales groups?

a. Retaining top sales talent

b. Reducing costs

c. Serving key customers

d. A rapid integration process