MERGERS AND ACQUISITIONS
Client Engagement - “Merger Failure-Not an option”
Mergers are Risky Business
Over 50% of mergers fail to reach stakeholder expectations. There are often problems in strategy, planning, communication, and execution. Human and intellectual capital is easily lost to frustration, confusion, and alienation. Operational efficiencies are not utilized, roles are not clarified, and competitive advantages are not leveraged. The vision and mission are not clear as the organization seeks to define itself and find its niche in the marketplace. Failure to move quickly to deal with critical integration issues can spell doom for the new company.
Culture is Critical
Why do many acquisitions destroy shareholder value rather than create it? Surprisingly, it has nothing to do with having paid too high a purchase price or a lack of strategic fit. Rather, companies focus on financial or technological due diligence but fail to perform due diligence on organizational, cultural, or leadership issues. Companies that fail to win the support of customers and employees immediately after the merger are those that fare the worst. Often, a compelling strategic rationale is not communicated to the workforce. There may be unrealistically high or low expectations. Understanding what the two organizations' cultures bring to the table is critical to being able to successfully blend each company into one.
Without weaving cultures and employees together quickly, productivity and customer satisfaction will suffer. Many do not adequately anticipate the impact of the conflict of cultures. Getting assistance to properly do the integration work can be the difference between a successful merger and a disaster. Turknett Leadership Group can help you avoid many of these pitfalls.
The Integration Process
Merger integration begins with leadership. The critical issue for leadership in the early stages is to build trust – within the leadership team and with the organization. Our focus will be on building trust and on diagnosis – of leadership capabilities and of organizational cultures. Integration is a full-time job and must be handled as any other business function, such as finance, marketing or operations.
Typical steps in the process:
- Assess the current management to get a clear picture of the talents and strengths of the leadership team and uncover gaps in leadership competencies desired in the new organization.
- Create a “success profile” of the new core competencies needed for the new business. Profiles are used for selection and development of executive and managerial talent in key leadership positions.
- Help align the leadership team around a clear definition of strategy, engagement throughout the organization using a “bottom up” process, and on identifying and developing the leadership competencies needed for implementation.
- Assess the cultures, help set strategy for combining the two organizations, and measure the crucial attitudes and opinions of the workforce.
- Identify potential pitfalls during each of the key transition, alignment, and integration stages of the merger. Set up post-M/A measures and evaluation processes.
- Help form a new executive team. Provide assistance in maintaining strategic alignment and effective communication among key board members and executives.
- Help put in place organizational best practices and high-impact communication plans that work in setting strategy, and designing and executing business plans.
- Work with the top leadership team to enhance strategic visioning, mission/purpose, and organizational realignment for managing performance.
Turknett Leadership Group excels in providing expertise to successfully address the human and cultural issues of a merger, acquisition or joint venture.
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