Sales Transformation
Six Common Sales Challenges in Mergers & Acquisitions
Merging two sales teams is challenging, but organizations that identify risks through talent and organizational assessments can put their best foot forward.
The urge to merge is strong—but it’s often not enough to make a business acquisition work. HBR research shows that between 70% and 90% of corporate mergers and acquisitions fail. That’s because many leaders don’t anticipate the full range of obstacles to integration, particularly those affecting two merging sales teams.
While company mergers may promise growth, synergies and innovation, they typically also bring a host of challenges that sales leaders must anticipate and navigate. Here’s a deep dive into six key hurdles that companies should consider in their merger and acquisition strategies, from cultural clashes to differing sales processes and methodologies.
1 Setting a clear goal for the business combination
Business leaders need to have a clear strategy for the business acquisition. “The whole point of acquisitions is to capture more market share cheaply or to be able to enter a brand new market,” said Andy Davidson, Senior Client Partner, Global Sales and Service Effectiveness at Korn Ferry.
This understanding of the value proposition of the merger needs to be shared with the sales teams. Charlie Dorrier, Associate Client Partner, Global Sales and Service Practice at Korn Ferry explained, “One of the biggest challenges in getting sales teams up to speed is the messaging around the value proposition.” The story you tell the public or investors at a high level—the reason behind the transaction—may be obvious. But you’ll need a more subtle, complex story on the front lines. Introducing a new buyer and set of value stories to front-line sellers who have been selling one thing for a long time requires a lot of focused time and energy. Dorrier added, “The longer you wait to get that right, the longer it will take to see value through the acquisition.”
2 Alleviating clashing sales cultures
According to Davidson, culture isn’t just a buzzword; it’s a fundamental element that makes or breaks many business mergers. When companies collide, their unique cultures can clash, creating a turbulent environment for sales teams. Without active steps toward alignment, cultural differences can lead to confusion, frustration and morale loss among sales teams.
Recognizing this, sales leaders should acknowledge cultural differences upfront. Moreover, “Companies should use culture as a factor when choosing acquisition targets,” Davidson advised. By valuing culture as a pivotal part of the transaction, organizations can plan for these gaps and create a roadmap for integrating disparate cultures seamlessly.
3 Anticipating sales channel challenges
Another significant challenge in a merger involves differences in sales channels. Conflicts can arise if the merging entities have different approaches to partnering or distributing products, noted Davidson. For instance, one company might heavily rely on partner networks, while the other prefers a solo approach.
Balancing these disparities becomes crucial to avoid channel conflicts that might alienate partners or create confusion among clients.
Sales Effectiveness
Breakthrough to immediate, predictable and sustainable sales effectiveness
4 Speaking the same sales language
Sales processes and methodologies act as the language of a sales team. When two companies merge, their languages might differ, leading to a communication breakdown. Dorrier explained, “When you have two different sales methodologies or processes that don’t align, it’s like merging two teams that speak different languages. There’s a lot of confusion about things like where opportunities are in the pipeline or where customers are in the buying process.”
Aligning sales processes and methodologies alleviates these concerns. Dorrier added, “The main value you’ll get from an integrated sales process or methodology is the ability for everyone, top to bottom, to communicate more effectively.”
5 Integrating tools and technology
The typical sales team has 30 or 40 tools in their toolbox as part of their workflows, according to Dorrier. “When two different sales teams with entirely different toolsets collide, redundancies and inconsistencies emerge, and seller frustration builds,” he observed.
Conducting a thorough audit and rationalizing the new organization’s sales technology stack are two essential steps to streamlining operations and avoiding resentment among sales teams.
6 Aligning compensation
Compensation plans can become sticking points in a merger and acquisition. If companies don’t pay heed to differing pay structures and financial incentives, they risk losing top performers and sales managers. That’s especially concerning because the top 20 percent of sellers are responsible for the bulk of an organization’s sales revenue.
Davidson noted, “Organizations have to make sales leaders feel valued, but also show a commitment to investing in them as leaders of the combined organization. It’s important to start including them very quickly in the succession framework.” To improve retention, organizations should spend time designing retention packages to keep the best leadership and sales talent on board, preventing a mass exodus that could destabilize the newly formed entity.
The key to successful M&A is a holistic, data-driven approach
In every challenge lies an opportunity. By anticipating these hurdles, organizations can emerge stronger, more united and better positioned for growth.
Data-driven diagnostics, such as organizational maturity models and talent assessments, can help company leaders understand these M&A challenges, giving organizations deep insight into everything from an organization’s culture to the tools and components of sales methodology critical to the sales team. Dorrier advised, “Using transparent assessments and clear messaging around what each organization brings to the table will do a lot to engage and energize both salesforces.”
The organizational consulting experts at Korn Ferry help merging organizations bridge the gaps between culture, processes, tools and systems. For example, our MASS model—which focuses on mindset, ability, structure, and systems—helps organizations transform at scale.
Learn more about how we can guide your organization through mergers and business change.
Key takeaways
- Culture clashes can make mergers and acquisitions difficult
- Combining sales organizations should align their sales methodologies so they speak the same language
- A holistic, data-driven approach can help merging organizations bridge the gap in their sales culture, processes, tools and compensation
Related insights
-
Insights to your inbox
Stay on top of the latest leadership news with This Week in Leadership - delivered weekly to your inbox.
