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The Most Reliable Approach to Overcoming the Cultural Challenges in M&A Deals
Numerous studies indicate that many merger and acquisition (M&A) deals fail to meet financial expectations — a figure that can vary from 50% to as high as 90%. According to McKinsey research [1], 70% of mergers do not achieve their expected “revenue synergies.”
Why do M&As fail? One author suggests a number of pitfalls [2] that can thwart success, one of which involves assigning the chief financial officer or general counsel to act as the “M&A champion.” Such individuals, already overwhelmed by the responsibilities of their demanding positions, may not have the time to do a proper job of due diligence. Other underlying reasons for failure or lackluster performance [3] include overpaying for the deal, lacking strategic clarity, making slow decisions, implementing poor integration planning and execution, eroding business fundamentals, allowing competitors to steal customers and market share, and losing key talent. And yet, in spite of that last factor being a reason for failure, talent acquisition — as the rationale for a deal — has more than doubled in importance, rising from 4% to 9%, since the spring of 2016 [4].
Leadership often views talent — one of the key ingredients in any successful enterprise — as a “soft issue” when it comes to business deals. And yet, cultural integration of…
