The successful blending of companies takes more than putting two balance sheets together. No matter how big or how small the merger, key steps within the process are equally important, and for the most part, typically underestimated. The most crucial steps are ones that occur prior to making the deal. Yet the most difficult work comes afterward.

Why this merger? Why now?

It may seem basic, but good merger strategies have a clear sense of purpose and timing. Is the merger meant to gain access to new customers, channels, or territories? Or are you trying to enhance services and product offerings instead of directly growing market share? How will you extract value from the acquired company once the merger’s complete? Your best strategy may be to build on your organization’s strengths instead of exploring entirely new or foreign territory.

Keep strategy in the valuation

Any assessment of a company’s value or the value of possible synergies should be carried out with strategic discipline. Some vital factors aren’t captured in the target’s financial statements, and understanding them is crucial to forecasting the bottom line. Knowing whether a company is a low-cost provider in its industry, for instance, can help to create a more accurate risk-adjusted analysis.

It’s also essential to thoroughly assess expected synergies and dis-synergies. Overestimating the potential revenue synergies and paying for them is a common mistake. Keep in mind that many mergers do not achieve the revenue synergies they initially expected. On the other hand, revenue dis-synergies almost always occur, and the key is to account for them upfront. For instance, while you expect to gain cost-saving synergies from a consolidation, you could lose customers in the process, and the revenue they provide. Take the time to analyze what losses will occur and what those costs will be. Look hardest at those things that will impact the customer and those that can produce the harshest consequences when things go wrong.

Often, your own managers can provide indispensable insight about your merger target. Their industry knowledge, networks, and contacts with suppliers can reveal important information about your target’s operations; vital information that can help in negotiations, deal structuring, and post-merger integration.

Above all, resist forces that compel you to abandon your valuation disciplines. Estimating synergies takes an investment in time and resources. Even with the best finance tools, companies often pay too much for mergers and acquisitions because they become enamored with the possibilities and undisciplined during the process.

Underestimating integration

Even the best synergies between companies won’t always hold together during and after a merger. While you may believe yours is a “merger of equals,” someone has to lead. It’s important to have a blueprint for constructing integration. How quickly or how gradually you integrate should depend on the size and complexity of the merger.

Nevertheless, no matter how good your plan is, combining operations, integrating technologies, and assimilating processes can all be overshadowed by cultural issues. The difficulties can be compounded by an urgency to get things done. Systems and physical attributes are indeed important, but the biggest, most influential piece of any merger is employees.

Often in a post-merger environment, people are treated like property. Lead respectfully and determine management positions as quickly as possible. Communicate often and with consistent messages. Then challenge and empower employees to find the best ways to make your integration plans work. After all, taking care of employees is the first step in taking care of your customers.