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How To Avoid Painful M&As

Ensure the two companies' heads can get along before sealing a merger deal.

A merger or acquisition, when properly executed, can be a beautiful thing. But as Russ Banham writes for Chief Executive, "bad integrations are like bad haircuts. You hope things will look better after the blessings of time."

Crossing fingers and praying for the best during an M&A is a poor strategy - it would be better to plan appropriately in the months and weeks leading up to the event by trying to make different corporate cultures more harmonious.

Banham points to the acquisition of Vidal Sassoon by Procter & Gamble as a prime example of executives' strong egos, and how they can complicate the entire process. Think carefully about how the heads of each company will cooperate, and if they can't, it may be wise to rethink the deal, A.G. Lafley, the former P&G chairman and CEO, told the news source.

"If you and the other fellow have a personality clash, it’s probably not a good idea for your companies to merge," Lafley advised.

While the people in an organization are a major factor in M&As, combining separate IT systems can also prove challenging, Mike Gorsage writes for Inc. Magazine. He notes that the best thing to do before moving on the project is to run a full assessment of all IT functions and do away with any duplicate databases, software, hardware or other components.