Leading and Managing During Mergers and Acquisitions

Leading and Managing During Mergers and Acquisitions

Some sobering statistics:

  • 75% of mergers and acquisitions are disappointing or outright failures
  • There is a 50% drop-off in productivity during the first 4-8 months after the close
  • 47% of senior execs / key personnel leave within 1 year 72% leave within 3 years

Why are mergers so hard? They are hard because most often, merging companies think only of the financial or operational aspects of the deal - the classic 'Due Diligence'. So, what is 'Due Diligence'?

In the conventional sense, it is an in-depth analysis of the financial and operational conditions of a company targeted for investment, merger, or acquisition. It may be as detailed as an accounting audit, but it is much broader in scope, because the operational condition and efficiency of the target's assets are investigated as well. Due Diligence is used to ascertain the economic values and results of operations and to express them in financial terms.

That is an excellent, if somewhat dry, definition of Due Diligence. One would assume that if you conducted your analysis according to this definition, you would find out all you needed to know about your target company, and would, with the appropriate planning, conclude a successful deal.

However, a merger or acquisition is a long-term process it is not simply a financial event. Whatever the reason your company has chosen to combine forces with another business entity, in order for you to beat the odds and make the transaction as successful as you planned it to be, there is another kind of Due Diligence that needs to happen — People Diligence.

“Most mergers are financial failures because the people aspects have not been planned and managed properly”.
— Watson Wyatt Worldwide

You are acquiring not only the ‘brick and mortar’ and other physical assets, but you are also acquiring the intellectual assets that reside within the employee base. If you do not carefully manage the people side of your deal, your odds of succeeding will be very unlikely.

Wolf Management Consultants LLC, can help you to create and execute a robust People Diligence Plan, which will help ensure a successful outcome. Components of a 'People Diligence' plan may include:

  • Communication Planning
  • Role Negotiation and Transition
  • Change and Transition Management and Merging Cultures
  • Managing Survivors and Succession Management
  • Managing ‘Transitional Employees’ (who are asked to stay for a period of time)
  • Creating Retention Plans for Key Employees
  • Leadership Development
  • Executive Coaching
  • Jump Start Process
  • Knowledge Management Processes

By taking Due Diligence out of the realm of a one time event, adding in the concept of People Diligence, and moving it into the arena of a long-term strategic plan, you can vastly increase the odds of making your deal all that you intended it to be!!


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