Mergers and Acquisitions

Mergers and Acquisitions


The first casualty of war is truth. The first casualty of a merger is trust.
Mergers and Acquisitions
The first casualty of war is truth. The first casualty of a merger is trust.

83 percent of all mergers and acquisitions fail. Why? Because of the inability to systematically and effectively integrate new and different cultures. Frequently, the deal itself makes great sense. However, organizations stumble because of people and cultural differences. The Board Room knows this, but most don’t know how to do anything about it. We do. Stephen M.R. Covey says, “While high trust cannot necessarily save a bad strategy, low trust will almost always derail an otherwise good strategy.” There is plenty of research about the failure path for mergers and acquisitions. The missing piece is the integration of a trust methodology. How do you deliver on an effective and efficient change effort without trust? And at what cost?

 

Leaders can’t just talk about it. They must have a simple, scalable pattern and methodology that deliberately creates trust throughout an enterprise – It must be seen as an INTEGRATED, STRATEGIC COMPONENT of the Merger and Acquisition Process. That’s what we do. Without this, we can easily predict soaring, unintended costs and the work itself slowing to a crawl.

Focus on People and Achieve Results.
"Culture eats strategy for breakfast."

In addition to working with organizations on the front end of a merger or acquisition, we frequently work with many organizations that merged several years ago, but are still struggling with a dysfunctional, low trust culture or an US vs. THEM mentality.

 

Ultimately, the desired outcome of a merger or acquisition is to achieve expected results, like increased growth, profitability, greater market share, just to name a few. Everyone understands the driver of these results are: a customer-focused, highly engaged workforce, efficient execution of the right priorities, strong leadership, a culture of accountability for results, collaboration, not just cooperation; cultural unity; high commitment among key players and a group of committed people willing to give discretionary effort.

What is the common bottleneck?
Why is the failure rate of mergers and acquisitions extremely high?

The predictable death of a merger or acquisition boils down to speed and cost. Where there is tension, resistance, or outright conflict between teams, departments, or any other key stakeholder group, the speed at which the work gets done gets bogged down, and it’s always at a high cost. We call this a trust tax – a tangible cost to the organization.

Here is where change activities are met with resistance and where the bottle-neck begins: People react by behaving in ways that will undermine the new change – and we call these Counterfeit Behaviors, the very thing that decreases speed and increases cost!

 

Examples of counterfeit behaviors include:

- Suspicion of leader's motives
- Manipulation of information
- Focus on activities, not results
- Disguise or hide information
- Low accountability
- Blind loyalty
- Not listening to those closest to the work
- "Undiscussables" increase
- Double-talk
- Narrow decision making

How do you deliver on an effective and efficient merger or acquisition in this context, and without trust? Bottom line is, you can’t.

Consider some of the costs:

- Delay in achieving expected financial results
- Loosing your best people
- Fear about keeping jobs
- Large percentages of people “quit” but “stay”
- Politicizing the process of change
- Turf wars
- Employee disengagement
- Dividing into separate camps
- Withholding commitment
- Lethargic and bogged down execution
- People no longer focusing on real work and the customer, to focusing internally on how this change is impacting me.

OUR APPROACH
The solution: Install The Speed of Trust™ Methodology

Establish a new ‘operating system’ of trust whereby all who are involved in the merger or acquisition learn and understand a new behavioral standard: new, high trust behavioral operating norms that they can hold each other accountable to. Creating a new set of values is not enough – how leaders and teams behavioralize and practically live those values in the context of everyday work, is a vital connection to the success of a merger or acquisition. Our methodology weaves the language and behaviors of trust into the fabric of the merger or acquisition process, accelerating and leveraging the merger process.

 

Our methodology in this area is groundbreaking. It fundamentally changes the trajectory of the change up front and has also proven to reverse years of dysfunction from a past merger even years earlier.

Increase trust: your merger works.

TALK TO AN EXPERT
We're here to help. See how we became a strategic partner with public and private entities in Saudi Arabia to scale up and support their rapid growth. Email us at info@franklincoveyme.com or WhatsApp us at +971 50 619 3120 for more information.