Most mergers and acquisitions do not succeed as hoped. Mitchell Marks, Ph.D., a leading M&A expert, has found that approximately 75% of mergers and acquisitions fail. He attributes the high failure rate to inadequate pre-merger planning and follow-through. Even when goodwill is intact, the complex nature of the situation itself can create pressures that cripple productivity. Collaborative effort by the companies involved is critical to success. For a productive consolidation, the new policies and leaders need to come from all of the involved companies. It is important to create a new mutually developed identity. By careful assessment and planning, the "success factors" of each company-the individuals, strategies, products, customer service, or other unique features of each company-can be identified and integrated into the new organization. Without this careful attention to the ingredients for success, even if the goal is a merger, valuable individuals leave and morale suffers among those who remain. Executive Advisors together with your integration-planning teams identity the synergies and minimize employee stress, distraction, and loss of talent.
Successful collaboration produces new ideas, new products, new processes and new teams. Realistic, careful planning and implementation can avoid most consolidation problems. Some executives, for example, underestimate the amount of time
and effort needed for successful integration of cultures, operating procedures, and people. Continued support and involvement from the top down maximizes the melding of cultures and staff. Our consultants are involved in the planning, consolidation, and integration phases.A 1999 study by the Institute of Profit Advisors suggests that it takes approximately two years for a merged company to show a profit gain of at least 15%. Their findings indicate that the most common difficulties during transfer of ownership are:
- Failure to understand the importance of planned succession.
- Failure to develop a strategic planning process prior to transition.
- Poor communication.
- Reluctance to hire an outside advisor.
- Lack of defined roles and responsibilities prior to transition.
- The candidate for leadership is not perceived as qualified.
There are no shortcuts to developing group identity within the newly consolidated company. Executive Advisors works with your executives during the planning and implementation phases to identify the knowledge workers, successful processes and strategies throughout the organizations to promote trust, collaboration, and enhanced effectiveness. Our consultants stay on during the implementation phases to ensure that these success factors remain and are integrated, thereby leading to positive morale in the combined culture and greater productivity.