Synergy Management at M&A

Did you know that according to research more than 50 % of M&A’s result in failure ?

This means that M&A today is a gamble, where the downside is that the value of the company acquired gets completely destroyed in the process. According to a study conducted by Roland Berger Strategy Consultants and published in July 2015, 80% of failure is based on “lack of synergy management and incomplete integration”.

We believe a “lack of synergy management and incomplete integration” is absolutely normal as to follow through such transformational process hasn't been taught to Biologists, Chemists, Mathematicians, Farmers, and alike.

Instead, highly specialized experts and executives are left on their own to work out HOW to execute the plans. They are expected to enter a whole new area of expertise and excel at it first time they try it.

They must

  • figure out how to balance the challenge of today’s performance with the long-term view
  • drive what needs to be implemented
  • justify the change to those affected by it and motivate the people involved

This works only in exceptional cases.

What can be done to break this vicious cycle ?

There seems to be a great believe that pre-assembled methodologies and tools can close the gaps, that cultural trainings can align the misconceptions, or even that completed forms will do the job. You may better challenge that because without leadership, ownership, understanding and constant adjustment to changing conditions even the best ship isn't sailing.

Yet, like any other science, implementation can be learned, practical skills need to be polished and expanded through experience.
More often than not, generalists with an operational - commercial mindset are the perfect match to run the transformation.

To help them, thus you, to succeed, here are some initial thoughts :

1. Execution needs time and demands structure.

Hence :

  • take time, skills and focus to manage the acquisition process
  • engage stakeholder top-down & bottom up
  • pay attention to follow through the process

2. Space is needed to refocus from daily business towards longer-term perspective.

That helps to :

  • think expansively, and then bring the specifics into focus
    • support far-sighted decisions
  • provide framework that ensures delivery
    • stagger the process: analyze, prioritize, test, adjust, consolidate and duplicate in due time
  • establish a structure for decision making, match skills and practical approaches
    • work closely with key departmental representatives and relevant stakeholders; focus on planning strategic work and managing change
  • steer everyone’s energy into a common, motivating and responsible direction

Particularly special situations like M&A's trigger a very labor-intensive time. Hence, the transformation leaders need equivalent capacities and resources to be able to follow through the process. But it will result in :

  • reduced duplication in structures and processes
  • eliminated points of friction
  • minimized capacity losses and associated costs

What if you don’t have sufficient capacities ?

Bring in a fresh outside perspective that assumes the role of an observer and analyst and/or participates to steer the process, and then consider the individual capabilities and needs.

Take into account :

  • Peer Support
    Pool skills and experiences in pursuit of solutions to the issues industries face today. Voice doubts or concerns about your industry, brainstorm freely with professionals at a similar level.
  • Direct Support
    Get help from an experienced Interim Management Professional who can focus 100% on performance . His/her personal agenda is unbiased by anything that happens, he/she went through such situation once at least. Interim Manager engage immediately, join when, and stay as long as you need them.
  • Special Support
    Ask for external guidance with appropriate experience (lectures, lessons, workshops). Options are manifold and customizable.

Smooth transformation will deliver, will be visible to your clients and drive the profit margin.

Implementation is our nature, operations’ is our profession, and we are here for you. Maybe we are able to help you too ?
Just find out.

Literature :
Roland Berger Strategy Consultants — Post-Merger Integration [PDF]

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