In the world of mergers and acquisitions, the terms “complex” and “complicated” are often used interchangeably, but they represent very different challenges. Misunderstanding this distinction can lead to poor planning and unnecessary confusion during the integration process.
To understand the difference: Complexity involves unpredictability and unknown outcomes, where variables interact in ways that are difficult to foresee. On the other hand, complication refers to systems that have many parts but are fully understandable and can be easily managed with the right approach to coordination.
Complex
Complicated
In most M&A transactions, the processes themselves aren’t inherently complex. Moving data from one system to another or harmonizing financials or on-boarding employees, are tasks that people have completed before. The real challenge lies in managing the many inter-dependencies between different functional areas and entities—complications that require clear communication and intentional coordination.
Complication Unraveled
For example, imagine two companies with different financial systems that need to be merged. The systems themselves are well-understood, but integrating them involves coordinating minimally between finance, IT, and operations, each with its own workflows, workloads, and timelines. These dependencies can create bottlenecks, or worse, if the contributors involved don’t have the right information at the right time.
The solution to these complications is ensuring that each contributor gets exactly what they need to do their part, on or before they need it. This happens most efficiently when explicitly identifying and tracking who needs what is done through simple mechanisms that help all contributors stay aligned and ready to act when their moment arrives.
Complexity Misinterpreted
Many organizations make the mistake of treating interdependencies as complex problems, leading to unnecessary layers of management or over-engineered monitoring solutions. This approach adds more confusion, as individuals spend far more time than warranted managing the process itself rather than delivering what’s needed. De-mystifying complexity occurs by offering a clear, straightforward process that focuses on eliminating complications through deliberate communications.
Conclusion
By recognizing that most M&A issues are not complex but complicated, the need for elaborate systems vanishes. In the end, it’s not about managing the unknown—it’s about managing the known, and doing it well. Navigating the complications of M&A by providing clarity and ensuring that individual contributors are fully prepared to do their part leads to success.
With new clarity from knowinging the difference between complication and complexity, the next step is understanding how to tackle these challenges in real time. In Post #3, we’ll explore the common, self-inflicted breakdowns in communication that often derail M&A integrations and how to prevent them.
Thanks for reading! If this post has sparked any new ideas or questions about how to optimize your M&A integrations, I invite you to join one of my live intro sessions. Each session is 30 minutes and limited to 2 participants for an interactive, in-depth look at how the CRISP™ method can make your next integration faster, better, and more efficient.
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