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How to Quickly "Heal" After Mergers and Acquisitions Making Sure the "Whole" Isn't Less than the Sum of the Parts

Thursday, March 1, 2007

The Society for the Advancement of Consulting® (SAC) has a global membership of elite consultants who are regularly engaged in merger and acquisition work for clients. They estimate that upwards of 80% of all M&A attempts either fail or produce a result that is smaller than the sum of the parts.

"It's astounding," says SAC CEO Alan Weiss, Ph.D., "that so few organizations learn the lessons generated by poor merger and acquisition attempts. We find the same mistakes made over and over, and actions to create 'quick healing' usually ignored."

Jennifer Schade, president of JRS Consulting in Wilmette, IL, advises newly-merged organizations to immediately focus on engaging their employees. "In the current climate of acquisitions and restructuring, companies are increasingly required to communicate with employees in widespread cultures, locations and job levels," she says. "Finding effective ways to connect employees from the corporate offices to the factory floor with the overall corporate business strategy is more critical--and challenging--than ever before."

Weiss notes that there are some "platinum considerations" for officers considering these activities:

  • Maintain critical client relationships
  • Retain all key employees
  • Reduce costs and duplication of effort
  • Create "seamless" interactions with customers and suppliers
  • Positive manage the media
  • Streamline systems, technology, processes, and methodologies, using the best of both worlds

"It's that simple," notes Weiss, "but the legal and financial entanglements too often subsume those key business considerations. A officer should be in charge of each one of them."

Alan Fortier, president of Fortier Associates in Fort Lee, NJ, explains: "An acquisition integration plan needs to be developed as a pre-bid step, with its costs and timing factored into the valuation, with full buy-in from the integration team. Plan implementation then begins immediately after the closing, with 30-, 60-, and 90-day milestones. If you're a weak integrator, or your designated integration team has no time, then you're probably better off steering away from growth through acquisitions because you'll never achieve your hoped for synergy and business improvements, while presumably paying full price for the stand alone value. This is a major reason why so many acquisitions fail or disappoint."

"This is not rocket science," concludes Weiss, but we're seeing an awful lot of failures on the launch pad."

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