Don'T Integrate Your Acquisitions, Partner With Them

A takeover usually signals the demise of one of the two corporations involved in the tussle - no prizes for guessing which one. Breaking with this practice, some companies from emerging markets are preserving the identity of companies they've taken over and giving them near-total autonomy. The acquirers (the AV Birla Group, the Mahindra group, and the Tata group in India; the Ulker Group in Turkey; and AmBev in Brazil, among others) have also retained the incumbent management teams, including the CEOs, of the corporations they bought. The new parents lay down new values and create a fresh sense of purpose, but they leave it to the acquisitions to carry them out.Some companies are better suited to adopt the partnering approach than others. Organizations with collaborative, inclusive cultures will have an easier time than companies with a hierarchical, command-and-control style. Senior executives in acquiring companies must be comfortable achieving goals through influence rather than control. They must also have a higher-than-average tolerance for ambiguity. Respect for new ideas is critical because executives must recognize the strengths of the acquired company and resist the urge to impose their way of doing things. These traits are DNA, but encoded in some organizations others will have to develop them.These are early days yet, but the authors' research shows that the partnering approach to takeovers seems to work better than traditional postmerger integration practices, and it has created value for shareholders.