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4 Steps to ensure mergers and/or acquisitions fulfill their purpose

I often work with organizations and teams that are going through, or have gone through, internal or external merger or acquisition.

Unfortunately, it is a known fact that most mergers or acquisitions fail to fulfill their desired or anticipated potential. I read a statistic, which stated that the archives of the Wall Street Journal show that upwards of 80 percent of mergers and acquisitions fail to fulfill the strategic goals that justified the merger and/or acquisition within the expected timeframe. In many cases, the resulting organizations are less effective and less successful than the original two by themselves.

My personal experience and observation have led me to believe that this failure is due to the fact that most teams and organizations don’t invest enough time and effort in the cultural, personal and human aspects of their integration. Rather, they focus almost exclusively on the content and process and they often end up with a well articulated plan that is disconnected from the actual reality.

I have supported many integration efforts and I have found that there are four specific steps that any team or organization can take to ensure their merger or acquisition will work and fulfill its purpose:

1. Establish an environment where people can communicate and dialogue about the merger and/or acquisition (M&A) in an open, honest, authentic, courageous, and effective way.
● M&A efforts are often stalled or undermined because teams and organization try to quickly address the redundancies, overlaps and duplications, including the nuts and bolts of reorganizing, restructuring, and scaling inside an environment and atmosphere of mutual suspicion, guardedness, and defensiveness, as well as lack of trust, respect, and open, honest, and effective communication. Trying to do things fast often slows things down because people say all the politically correct things, but then they walk away paying lip service to the integration effort.

2. Elicit genuine ownership on both sides for the success of the M&A.
● In most M&A’s, one party feels ‘taken-over’ or victimized by the other. While this dynamic is understandable, it undermines the ability of both organizations to succeed in their integration. From the start, it is critical for the leaders to create an environment in which everyone on both sides of the aisle genuinely owns, feels committed to, and is accountable for the success of the integration process and its outcome.

3. Make sure both parties have an opportunity to complete their respective pasts in an honorable and empowering way.
● Each team or company has its own unique legacy of culture, brand name, competencies, ways of doing things, heritage and identity, which its people often feel proud of and attached to. In order to move forward into a new shared identity, people need to ‘complete their respective pasts’ – or differently said: ‘grieve for the end of an era.’ But when both sides, especially the acquired, feel respected, heard, considered, included, recognized, and validated for their legacy, it creates space for all parties to generate the next chapter as an even-greater one.

4. Align the combined teams around a new shared future and identity that embody the best of both cultures and operations.
● To create a reality where the new whole is greater than the sum of its historical parts, the two teams and organizations have to articulate and align on a new bold and compelling shared future which both parties equally own, feel committed to, accountable for, and energized about. Unifying the teams around a shared future and identity will immediately create genuine excitement and urgency on both sides to clarify, align, streamline and scale roles, functions, structures, and responsibilities. When creating the future, it is important to consider and include the positive attributes and uniqueness of each organization in order to avoid the trap of one company feeling crushed by the other.