Merger/acquisition activity in the pharmaceutical and life sciences industry has been and will continue to be a strategic driver of growth. This may include expanding therapeutic area focus or seeking to gain other competitive advantages. Unfortunately, post-merger integrations are often unsuccessful. More time is spent on the upfront due diligence and closing the transaction than on the post-merger integration planning and execution – where things often fall apart. Most acquisitions fail because acquirers overlook human capital and cultural integration challenges.
Leaders need to start by asking the right questions:
- Can we blend the companies as needed?
- Can we overcome our differences to achieve desired synergies and results?
- Can we align and motivate our people?
Even when asking the right questions there are common pitfalls for bringing new teams together from differing organizational cultures with variation in values, norms, and work procedures. There is often misunderstanding, misdirection, lack of confidence in leadership, and even hostility.
M&A has been and will continue across healthcare sectors – pharmaceutical industry, medical devices, healthcare delivery systems, medical groups, and other stakeholders. Although each merger/acquisition is different, there are lessons learned from past companies that must be applied going forward.
WLH has worked with pharmaceutical and healthcare companies during pre-merger analysis and post-merger integrations.
Consider the following lessons learned:
- Design a comprehensive integration plan before changes begin based on an aggressive but realistic timeframe
- Assess culture as part of the due diligence process and do so early on
- Use teams as leverage and as drivers in the implementation process
- Spell out the rules of the game up front and be specific
- Announce timing and create short-term tasks during ambiguous periods
- Measure and report progress against well-defined goals at each stage
- Keep destabilization period as short as possible
- Ready leaders to guide others through the change
WLH knows the questions to ask to identify risks and can partner to provide an effective integration plan and change management solution.