Search results1 – 4 of 4
Merger activity will continue to gain momentum in 2004 and integration will remain a “hot topic” with senior executives. The authors have distilled the critical success…
Merger activity will continue to gain momentum in 2004 and integration will remain a “hot topic” with senior executives. The authors have distilled the critical success factors underlying integrations that drive shareholder value. These success factors are brought to life through best practice examples, including: (1) synergies that make the merged company better able to increase revenues and gain market share than either company could on its own; (2) the importance of early, detailed planning in conjunction with clean teams, active senior management commitment and an “adopt‐and‐go” attitude; (3) a focus on growing the existing business, companies that apply the 80/20 rule – spend only 20 percent of the time on the merger – don’t lose sight of their business and customers; (4) communicating early and often to customers, employees, partners, investors and the media with a realistic assessment of the facts rather than being overly optimistic; and (5) envisioning the desired culture they are looking to create for the new entity and building the sense of community among employees of both organizations.
The field of M&A management remains a work in progress. The principles and practices for effective integration are only partly codified and imperfectly understood. Even…
The field of M&A management remains a work in progress. The principles and practices for effective integration are only partly codified and imperfectly understood. Even with respect to the techniques that are known, it's possible to lose something in the translation and jeopardize a deal through misapplication.
Eight examples illustrate how certain formulas for success can be true as far as they go, yet be potentially misleading or even counterproductive.
Companies integrating organizations after an acquisition should avoid overpromising, define in advance how the NewCo is to look and function once integration is complete, resolve political issues early, adjust the integration master plan as the process goes forward, ensure that every segment of the organization is appropriately engaged in the integration effort throughout, focus on revenue preservation rather than revenue enhancement during the early stages, document the baseline against which synergy achievements will be evaluated, ensure that essential tasks are completed even if that means accepting solutions that are “good enough” rather than perfect, and maintain momentum after Day One.
The most sophisticated M&A team may be just one deal away from a major misstep. Executives should resist the temptation to assume their organizations possess the whole truth when it comes to M&A management, and approach each deal with the wary conviction that we all have much to learn.