Seven Tips to Ensure Business Marriages Grow Happily Ever After
Joyce Harper is an online columnist for Sales & Marketing Management. She is also the founder/CEO of Sharper Solutions (www.sharpersol.com)—a management consulting firm specializing in organizational development and strategic management—and works with companies nationwide to create organizational effectiveness and increase revenue building potential.
Reprinted here is Harper’s article “Motivating Change: And The Two Became One”, in which she recommends careful consideration and compatible business goals to ensure a successful merger.
Recently I met with a client who was contemplating a horizontal merger with another organization. My client was approached by one of his competitors with a proposal aimed at broadening market share, maximizing economies of scale and increasing profits for both companies. As he took me into his confidence by discussing the preliminary details of the possible merger, I could see how this deal could turn the two average organizations into one industry leader. But for this—or any merger—to succeed, the leadership team would need to have a clear vision of the outcome and a strong management group to make it happen.
Approximately two out of every three mergers and acquisitions fail to achieve their intended goals or to live up to their financial promise. In fact, depending on the statistics used, the failed merger rate is higher than the U.S. divorce rate. Therefore, I always recommend that business leaders take the same care when considering a merger that they hopefully [would take] when considering marriage. Here are a few examples of things to consider when contemplating a merger.
1. It’s never too early to meet your potential in-laws.
Whenever possible, meet with the managers of the other organization, even if you are still in preliminary talks. The purpose of these meetings is not to divulge confidential information, but instead to begin building a relationship with the leaders who may become leaders in the new company. Are they strategic thinkers? Will they fit into the new culture of the combined organization? Do they have the ability to adjust quickly after the merger and begin refocusing on growing the new organization?