Mergers and Acquisitions have now been cited by Goldman Sachs as the primary global growth strategy for large-cap companies. The last twelve months have seen the return of the strategic inquirer, with blue chip companies driving deal frequency and volumes not seen since 2007 and 2008. Yet, almost religiously, study after study shows that mergers and acquisitions fail at rate of 70% to 90%, leaving massive intellectual, creative and financial currency on the table.
The number one reason for M & A failure? Culture clash.
And a decades long flawed strategy titled “integration.”
Here’s the unspoken truth accompanied by the predictable chain of events.
An M&A is an arranged marriage.
- There is no love at the beginning.
- The issues start Day One.
- Executives announce the once hush-hushed M&A information.
- Employees feign excitement as FEAR ripples through both companies.
- The C suite announces: “This will be great for everyone!”
- No one is buying that promise.
A culture of SURVIVAL thinking and behaviors is now in play.
To quiet the fear, a WILDLY FLAWED STRATEGY called INTEGRATION is announced.
Leaders often struggle with managing approaches to improve engagement and ownership as part of a process that directly impacts results. Company meetings, one-off engagement activities, and other approaches might work but there is a technique you should build into the fabric of your organization. It’s a relatively simple but powerful process that supports improved engagement, ownership, accountability, and results but some discipline and consistency are required.
New information about the inadequacies of leadership at the U.S. Veterans Affairs (VA) medical centers continues to be revealed daily. The headlines astound, “Bad VA care may have killed more than 1,000 veterans, senator’s report says.” In summary, for years the wait times reported by many medical centers in the management system for measuring effectiveness were simply false. As a result, veterans have not been served well and most everyone is outraged.
The following thorough post is a combination of two prior guest posts to Switch & Shift plus additional updates after Mary Barra’s second appearance before a House subcommittee.
The GM ignition switch recall tragedy led to at least 13 deaths and was the result of 11 years of failure on many levels. It’s a live case study on a sad culture crisis we all can and must learn from since culture is the most powerful force in organizations. Rarely do we have a chance to pull back the covers and see a culture with some serious dysfunction from an organization that still accomplishes amazing work on a global scale in spite of it all.
I wrote a popular TLNT.com article about how 96% of respondents from a Strategy& / Katzenbach Center survey on culture and change management highlighted that culture change was needed in their organization in some form. I criticized some of the over-simplified recommendations that accompanied the survey release but The Katzenbach Center came through with their recent high quality article and related video on 10 Principles for Leading Change Management.
All leaders need to understand these principles and it doesn’t matter if they are in a big corporation like General Motors or a small business on Main Street.