Although the pace of M&A activity has slowed since the recent financial downturn, pundits predict that it will accelerate in 2010. So it was interesting that I came across this article that discussed why so many attempts to merge companies are ultimately unsuccessful.
The article lists 3 main reasons why M&As fail:
1. Executives don’t understand the important link between business processes and systems;
2. Business leaders cannot agree on a framework for achieving commonality among the misaligned processes and systems;
3. Finally, the inability of important decision makers to make difficult but necessary business decisions.
All of these reasons fall under the category of organizational management. However, I would suggest a fourth reason to help explain the lack of success with M&A’s, which falls under the category of talent management:
4. Failure to effectively merge the workforce and optimize the new talent pool.
Without having the right people in the right positions at the right time, a company merger can still fail even when executives have seemingly “dotted their i’s and crossed their t’s”. To avoid overlooking potential workforce pitfalls, clear visibility of talent is critical throughout the entire merger process.
Nakisa has produced a video that speaks to that visibility. I encourage you to check it out on YouTube:
The Case of the Mixed-Up Merger
Until next time, don’t forget to Visualize What Matters MostTM
