| Capitalizing on the High-Stakes
Window of Opportunity
Integrating new business acquisitions represents
a major inflection point in the life of
a company, requiring a change in strategy,
new organizational capabilities, and different
leadership processes. TruePoint understands
the underlying challenges and has designed
a practice to help companies overcome obstacles
to realizing their full post-merger potential.
- The challenge —
beating the odds of a two-out-of-three
failure rate.
- Opportunities and risks
— implementing a new leadership
model and processes.
- TruePoint’s approach
— combining tough decisions and
honest conversations.
The challenge. By many
estimates two-thirds of business integrations
fail to meet pre-merger expectations. Common
themes surround many post-acquisition merger
failures. The acquiring company is unable
to realize synergies from the acquisition
— often it is unable to get people
to work together productively. Acquisition
integration is slow and it takes too long
to realize benefits. And the acquiring organization
may not recognize the need for a clear strategy
to integrate the people and cultures of
the two organizations.
Opportunities and risks.
With a step change in scale and scope, business
mergers represent a unique window of opportunity
for companies. Mergers allow an “unfreezing”
of the current system with natural expectations
of change among the leadership group and
other constituencies — so they are
an opportunity to “reset the contract”
with key constituencies from both organizations.
And new energy can be unleashed by the integration
process itself.
But the risks are also quite high. There
is a major step change in complexity. Momentum
is lost from inward preoccupation and the
departure of key players. Key relationships
are disrupted. And leaders are overloaded
from managing both the integration and the
ongoing business concurrently.
Furthermore, business mergers create a
significantly different leadership environment.
“You don’t know what you don’t
know” — and such blind spots
have consequences. There is urgency for
action to assert leadership — but
an incomplete understanding of the organizational
system and its increased complexities. Acquisitions
come with raised expectations to show they
are financially justified. Leaders find
themselves holding limited personal capital
with key constituencies. Anxious players
jockey for position, increasing conflict
and creating “hidden agendas”
that are difficult to penetrate.
Consequently, the leadership model and
the processes required to successfully integrate
two organizations are distinctly different
from those in place to manage the previous
businesses.
TruePoint’s approach.
We combine hands-on experience leading acquisition
integration at GE and other organizations
with our distinctive methodology for creating
organizational alignment and commitment
through the Strategic
Fitness Process. We work with senior
management to rigorously focus the leadership
agenda, ensuring hard choices are made about
what can be achieved when. We also look
to manage the “hard” integration
in a way that achieves both “hard”
and “soft” synergies:
- Maximizing learning and surfacing hidden
barriers.
- Building early momentum and avoiding
predictable “potholes.”
- Mobilizing support from key constituencies.
- Creating a platform for long-term success.
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