Seventy to ninety percent of mergers and acquisitions fail. Here’s a four-part plan to avoid that statistic.
Andrew Camilleri | January 30, 2017
Mergers and acquisitions are big risk, big reward. When they succeed, they can catapult your business forward, but study after study shows a high failure rate—between 70% and 90%, according to Harvard Business Review. Most companies maintain rigor through the negotiation process, doing their best to mitigate risk factors around valuation, deal price, and due diligence. But after the dust settles, many struggle. A recent KPMG study found that the number one driver of successful mergers is a well-executed integration plan.
After the deal closes, four factors are critical:
- Clear vision for the future
- Resource transparency
- Alignment of processes and operations
- Culture-building and change management
When companies integrate with these priorities in mind, they can overcome many common points of failure, including the inability to transfer skills, inability to articulate direction, talent flight, and cultural conflict.