Did You Know Why 83% of Mergers Fail and How Make Yours Succeed?
The problem behind failed mergers rarely has anything to do with operations, logistics, sales and accounting benchmarks.
The main reason behind failed mergers is the cultural mismatch
Experience shows, if the most talented people are disengaged in the course of the change process, it can take as long as three years for a company to return to the level of engagement they experienced before the major change occurred.
That’s why we created this post to outline three best practice strategies we’ve researched recently.
Strategy #1: Understand Your Stakeholders
To approach a company’s culture effectively, you first must ask yourself: What is the Stakeholder Value We Deliver?
Understand deeply why your customers, partners, and employees are working with your company?
If you don’t ask your stakeholders this simple question the merger will inevitably fail!
In the digital world, mergers often happen between companies with a focus on market size, market segments, logistics networks inviting friction between the CEOs and Top Management Members. But, if the two CEOs agree on the common VISION, MISSION, VALUES, the operating networks become a minor issue.
Strategy #2: Make the Key Leaders Thrive the Merger Process
The major challenge in a merger is not blending financial assets or operating assets, but to retain your key leaders.
Key leaders have to believe in the vision, mission, values of the new company.
That’s why you involve your key leaders early in the merger process.
Make them the driver of the merger process to take their career to the next level.
Strategy #3: 1+1=3
Successful leaders always make other people succeed.
That means they identify people and unique business systems that thrive the company’s success.
Without understanding what differentiates both companies, there is simply no strategic value.
Key leaders get insight into the top talented people, breakthrough strategies and proprietary business systems of each company.
They establish programs for integrating these high-value assets to create a superior organization rapidly.
The goal of the superior organization is to thrive sustainable stakeholder value.
What Makes Mergers Work or Not? The Magic Three!
- Outstanding Business Leadership
- Business Systems Compatibility
- Cultural Fit
Make a Merger and Acquisition a Long-Term Success.- Josef David
Discover two business cases that support this argument. Enjoy!
Business Case: Clash of Cultures – Daimler vs Chrysler
Business Case: Mergers , Acquisitions & Failures
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