STRUCTURED SYNERGY® DELIVERS M&A SUCCESS

 

It's surprising that we put so much up-front effort into M&A and alliance deal making, and yet leave the real measures of merger success unaddressed.

 

Statistics have long shown that most mergers are destine to fail financially, with failure rates as high as 80%. The measurement of success is pretty simple. "Does the deal generate enough free cash flow to cover the capital costs, or does it make a similarly sized positive impact on the stock price." Unfortunately we can only answer in the affirmative in some 20% - 40% of the cases.

 

The main causes of M&A and alliance failures are the "human factors" and lack of cooperation across the combined organizations. The promised business synergies then just do not happen.

 

HUMAN FACTORS Involve More Than Just "Retention Planning"

 

Human factors encompass more than just simplistic employee rankings and retention planning. In terms of M&A financial success, we need to focus on a redevelopment of a combined organization strategy and establishment of roles and responsibilities across the combined organization. Most importantly we need to identify and quickly complete joint projects generating income within 18 months of the original merger announcement. Failure to meet these targets greatly raises the odds that your merger will fall in the 60-80% financial failure grouping.

 

Worse Than Redundancy Layoffs are the Uncontrolled Attrition Losses That Follow

 

While most mergers result in some level of personnel redundancy (read as layoffs), what is not as well acknowledged are the uncontrolled retention losses within the first year of key employees, managers and executives. M&A activity causes stress, confusion and uncertainty within both organizations. Failure to quickly address the combined strategy or the organization-wide roles & responsibilities only adds to the stress. It's not enough to simply say, "we're leaving the acquired organization alone for now ..." as this only extends the period of uncertainty.

 

Driving Post-Merger Fear, Confusion and Stress are Differences in Values, Goals

 

While most mergers result in some level of personnel redundancy (read as layoffs), what is not as well acknowledged are the uncontrolled retention losses within the first year of key employees, managers and executives. M&A activity causes stress, confusion and uncertainty within both organizations. Failure to quickly address the combined strategy or the organization-wide roles & responsibilities only adds to the stress. It's not enough to simply say, "we're leaving the acquired organization alone for now ..." as this only extends the period of uncertainty.

 

Achieve 80% Success Rate Using Side by Side Leadership® Methods

 

Side by Side Leadership® is a structured teaming and leadership model that goes directly to the heart of these post-merger human factor issues. The upper managers of most M&As approach their management counter parts with competitive, conflictual and condescending behaviors. The results are poor communication, cooperation and coordination.
The methodology was developed after analyzing over 3,000 studies, and was refined in the actual post-merger integration phase of several large and complex M&As. The results using these "side by side" leadership methods across the combined organization deliver an astounding 80% financial success rate. Given the inherent predisposition of mergers and alliances toward financial failure, an 80% success rate using Side by Side Leadership® methods is truly impressive.

 

Team Effectiveness Depends on a Distinct Structured Teamwork® Approach

 

Side By Side Leadership® builds on the pragmatic and highly effective Structured Teamwork® research. For years, we have all heard about the benefits of effective teamwork and collaboration, but what is seldom openly discussed is how often well meaning teams spin out of control and make the situation worse. Side By Side, Inc. research and training experience clearly illustrates that there is a "right way" and a "wrong way" to implement teams. The positive and exceptional benefits of teamwork require the distinct and structured approach found in Structured Teamwork®.

 

Structured Synergy® Delivers the Promised M&A Financial Returns

With all managers leading side by side and cooperatively and structured teaming infrastructure it is possible to use Structured Synergy to pay back the cost of the Merger or Alliance in 18 months !! Side by Side Leadership and Structured Teamwork create an across organizational culture of open communication, great cooperation, 24/7 coordination and creativity.  With Structured Synergy you then have all of your cooperative leaders propose business, marketing, sales, product and operational synergy projects.  The best projects with the quickest and highest potential ROIs are selected and implemented rapidly.  And the financial returns roll in.

 

You Can Learn More and Make Effective Changes in Your Own Situation

 

If you see visions of post-merger fear, confusion or stress within yourself and would like to learn more, you may find our award winning book Side By Side Leadership helpful. An ideal companion is the book Breakthrough Teamwork that describes Structured Teamwork® methods, but also takes the discussion into pragmatic and results-oriented actions that you can take today, regardless of your role within the organization.