M&As: The Magic Trifactor
A merger or acquisition marks one of the most exciting moments imaginable for an organization.
It bears the promise of “bigger and better” – bringing people and cultures together, creating opportunities for product or service synergies, and ultimately leading to more exciting experiences for existing and new customers. Sounds almost too good (and too easy) to be true, and, as expected, there’s a flip side. Decades of research on the success rates of M&As paints a far less optimistic picture: roughly 50 percent of them fail.
Need a sobering analogy? Those are the same odds you get when flipping a coin; or placing your bet on either red or black on the roulette table.
Given the enormous consequences an M&A deal has on both people (employees, customers, investors) and business equity (brand value, share price), organizations need to dramatically increase the odds for a deal to succeed: 50 percent simply won’t cut it.
The question is, then, what is the formula for increasing the odds?
Integration is one key ingredient with three crucial components that form what I like to call “The Magic Trifactor.” Here’s what they are – and the reasons that they are so powerful: