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Acquisitions, Mergers… Integration through Matrix Management

By Ronald A. Gunn, Strategic Futures principal

Whether prompted by economic conditions, and/or by the availability of entrepreneurial businesses, which are owned and/or led by individuals who are nearing retirement, there are numerous conditions that favor today’s aggressive merger and acquisition activity. Bringing together previously separate companies into one integrated enterprise is a complex challenge. One way to achieve this integration is through the use of matrix management.

Each legacy company brings its own strategy, structure, ways of doing things, and systems. However, the point of merger and acquisition activity is to make 1+1=3, rather than persisting in holding the acquisitions together with baling wire such that the whole ends up being less than the sum of its parts. To the extent that you permit or even encourage these entities to continue doing what they have been doing as they have been doing it, then the danger is that little or no value will have been added by bringing these discrete companies together. When you consider that “we are perfectly organized to continue doing things as we have been doing them with the same results,” then you may find that it is time to look at structural alternatives, including matrix management, particularly if you are dissatisfied with the results that you have been getting.

A matrix organization relies upon a mix of both vertical and horizontal leadership. Vertical leaders manage the delivery of services that allow the entity to earn revenue. They also define the integrated enterprise’s “way of doing things.” Matrix vertical leadership can go a long way towards harmonizing strategy, systems and structure.

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