Q: What are the odds of a merger or acquisition being successful?
A: A number of studies have indicated that between 60 and 70% of M&A’s fail. These surveys reveal that companies do not pay enough attention to the people-related side of the deal and either ignore or underestimate the difficulties in merging the two cultures. This is a critical error since a) it is the people who bring much of the value to the deal and b) the non-integrated, incompatible cultures negatively affect the performance and value of the combined companies and prevent the realization of projected synergies.
Frequently cited contributors to the failures of M&As are incompatible corporate cultures, inability to manage change, unclear reporting structures, clashing egos or management styles, inadequate or untimely communications, poor benefits planning and follow through, unfocused team building, inadequate realignment efforts, the slow pace of integration and key talent retention.