POST-MERGER OR ACQUISITION INTEGRATION

Post-Merger or Acquisition Integration

According to a KPMG study, “83% of all mergers and acquisitions (M&As) failed to produce any benefit for the shareholders and over half actually destroyed value”. Interviews of over 100 senior executives involved in these 700 deals over a two-year period revealed that the overwhelming cause for failure is the people and organizational culture differences. Difficulties encountered in M&As are amplified in cross-cultural situations, when people integration has not been seriously – and preferably rigorously – evaluated as part of due diligence.

Merger success is possible, however, being part of the 17% that succeeds, rather than the 83% that does not deliver, requires more than insight. Merger success is based on acceleration, concentration and creating a critical mass for operational change (adaptation).
To the point in the transaction where the papers are signed, the merger and acquisition business is predominantly financial – valuing the assets, determining the price and due diligence. Before the ink is dry, however, this financially-driven deal becomes a human transaction filled with emotion, trauma, and survival behavior – the non-linear, often irrational world of human beings in the midst of change.

Building Something Greater

LeadFirst works with your senior level team(s) to help set the stage for integration by creating a consensus around vision, mission, guiding principles and long-term Organizational Culture preservation and formation. To ensure you the smoothest possible transaction and transition, LeadFirst will:
  • Provide an Organizational Culture measure for the respective organizations as well as the combined organization.
  • Co-creates, with the management team, an Organizational Culture PrecisionPLAN that addresses all of the human dimensions of the merger.
  • Assist in the design of change management architecture.
  • Facilitate merger integration teams.
  • Provide hands-on assistance with initiative selection and process and organization design.
  • Help the new organization implement operational best practices.
Metrics That Matter Brief Description of Applicable Metrics
Culture Integration Speed of alignment of each of the merged company’s cultures to “Preferred Future” using Diialog Organizational Culture PROfile.
Accretion Value Longitudinal measure of the gap to stated accretion value target.
Employee Productivity Improvement As measured by change in per capita sales, EBITDA or Market Capitalization from Time 1 to Time 2.
Employee Retention Unplanned employee attrition reduction from Time 1 to Time 2, including a financial impact calculation.
Key Stakeholder Testimonials Stakeholder verbatim regarding observed behavior change and/or business improvement.
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