Post-Merger Integration of R&D

The competitive landscape is changing as the wipe out of less successful companies continues in the wake of the recession. For the audacious, there are opportunities to acquire other companies as a means to further strengthening their position for the next upturn. However, an in-depth study conducted by Arthur D. Little notes that while the potential gain of merging R&D departments is substantial, integration of R&D activities exposes the business to significant risks, is more difficult and takes longer than other areas – all factors that can spoil the affair. The solution is careful tailoring of a full R&D integration approach that deals with the “enablers” early on – such as common organization, governance, processes and performance metrics – and most importantly, persistent focus on the key synergy levers such as common product and technology strategies, common R&D IT systems, and overcoming cultural differences. By being persistent and actively managing the integration, companies can realize stronger synergies faster, while mitigating the risks that are typically triggered by M&A activities.