Accelerate your transformation with M&A

Tech acquisitions are at high risk of being suffocated by traditional playbooks. A common mistake is forcing uniform integration of people, processes, and systems by eliminating redundancies through a like-for-like exercise.

Sidestep it: Enforce strict prioritization of workstreams based on expected value, not on uniformity or perceived fairness. Work backward from the end state to pinpoint with precision which areas need to be integrated and to what degree.

If the tech acquired is consumer-facing, then existing customers may become skeptical that the larger entity will continue to innovate and stay nimble.

Sidestep it: Successful integrators anticipate this resistance and proactively engage customers by emphasizing the new offering’s value rather than its features. Integration teams must develop pricing models that are representative of a cohesive offering, seamlessly blending the legacy industry product and its newly added digital sibling.

As revenue synergies become more important, deal teams are at risk of setting stretch targets without sufficient pressure-testing from the regional business units and commercial leads who inherit accountability.

Sidestep it: In a recent KPMG study, industrial executives said the heightened focus on synergies makes unlocking deal value their most complex challenge. Capturing the incremental value often starts by integrating the acquired technology into existing products, not offering it as a disparate add-on.

Tech companies are known for having less bureaucracy, more innovation, and quicker decision-making instilled in their culture. It’s often part of their appeal. But many acquirers—larger, more structured, more risk-averse—take culture for granted.

Sidestep it: To promote cultural alignment and continued innovation as a single large enterprise, assess culture to understand where to assimilate and where to incubate. One tactic that works: Engage cultural leaders on both sides of the new organization and position them to lead integration efforts. This will promote engagement across the enterprise.

Tech companies tend to be more generous with lofty titles and buckets of equity than their industrial counterparts. Furthermore, equity awards tend to extend deeper into the organization. As a result, matching compensation becomes a delicate exercise, but it can be make-or-break for retention.

Sidestep it: Engineers and salespeople are generally the greatest flight risks. And replacing them would affect the growth prospects of the target business and require significant investment. Address friction points early. For engineers, it’s often equity compensation, seniority of title, and flexibility. For salespeople, it’s realignment of customers, cross-training, and adjusting sales goals tied to compensation.