By Ravi Todi, an EO Kolkata member and managing director of Magma Fincorp Limited

With every merger, there comes a variety of new experiences and lessons learned. That certainly was the case with my company, Shrachi Limited. In 2007, we were passing through a critical phase. We had to manage both our growing business and the stiff competition. Unfortunately, we had limited capital and human resources. Because of our limited capabilities, we considered putting our merger aside. Instead, we trudged along, searching for a partnership and the means to move our vision forward.

After careful analysis, the merger was ready to take place. Shrachi Limited and Magma Limited joined hands to form Magma Shrachi Limited. This was a typical example of a smaller company merging with a bigger one to form a much larger entity. There were numerous advantages to our merger, including cost rationalization, greater utilization of resources and access to wider markets. There were also a lot of lessons learned.

In order for the merger to work, we had to play our roles conscientiously. What’s more, our roles had to be clearly defined so as to avoid stepping on each other’s toes. While we were able to achieve this, we did encounter problems along the way. These included varying work cultures, differences in productivity levels, dissimilar mindsets, individual egos and the integration of individual strengths. Here is what we learned about the merger process and how we managed to resolve our issues:

• We avoided dictatorial attitudes— it’s unhealthy and detrimental to a merging company
• We worked on comfort levels for those who became a part of the larger family
• We adapted— adaptability is critical to maintaining a harmonious relationship
• We discovered that the role of leader must be inspirational and not overbearing

In the end, the merger was a success, especially on the learning front. We realized that in order to carry out large volumes of business, it’s necessary to have all the systems in place and monitor them with the right resources at the right time. We also learned that mergers are like marriages, where one family unites with another to create a long-lasting bond that can grow in harmony. These deals involve a ton of adjustments from both sides, and the process has to start from the top. If this occurs, then the end result is a happy and successful family.