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Mergers and Reorganizations

  • The right merger takes many good companies to undreamed of heights.
  • The right merger takes many good companies to undreamed of depths.
  • Why is downsizing so amazingly debilitating and dysfunctional?

Using the same financial models, the same type of reasoning, similar management styles, why such incredibly disparate results? The answer is both easy and difficult.

If the numbers are consistent, it must be about the people

 

Using Legacy’s technologies, you will:

  • Resolve hierarchy issues
  • Unite conflicting interests, generating strategic thinking
  • Evolve differing values into a common, heightened ethos
  • Spur open communication
    Eliminate the desperation to limit change
  • Inspire and enroll your people, eliminating paralyzing fear of the unknowns
  • Fill information voids with something better than rumors and guesses
  • Generate trust and cooperation, internally, not competition

You are at a crossroads. You can transform your culture, creating remarkable value, enabling stunning results, or you can become one of the statistics quoted below.

Statistics on all mergers:

  • the success rate of M&As is a mere 30-40%,
  • 65% of all mergers or acquisitions do not achieve the objectives set forth,
  • 83% of mergers surveyed were unsuccessful in producing any improvement in shareholder value.

As many as 50% of key executives leave an acquired company within 12 months. It is common that 75% will leave within three years! And how many staff people will leave with them?

Replacing an employee costs 150% of their annual salary, and 200 – 250% for managerial and sales positions. And how many customers do these people take with them? These outrageous costs are not necessary.

Proactively seize this unique opportunity to transform your entire organization.

Create a legacy others can only dream of

Organizations with rich, healthy cultures achieved net income growth of 756 percent, versus a mere 1 percent for those with less-defined cultures”

Organization Performance and Culture
by: John Kotter
Harvard Business School

Despite the penalties for failure, too many CEO's ignore a key factor that can make or break an M&A deal: culture clash.

Outlook Journal
by: Robert J. Thomas

In 1994, Quaker Oats (the maker of Gatorade) purchased Snapple for $1.7 billion. Potential synergies were impossible to ignore. Even though both products were found in similar retail outlets, Quaker’s highly-focused, mass-market style and Snapple’s quirky, entrepreneurial style clashed and remained unresolved. In 1997, 3 years later, Quaker sold Snapple for a mere $300 million.

Various Sources

What lessons can we learn?

  • Successful mergers and acquisitions are few and far between
  • They require real commitment and planning
  • They are people, people, people deals
  • It is essential for early-stage companies to build critical mass rapidly
  • They are a way for early-stage companies to fill in the missing pieces quickly
  • There is a short window of opportunity - seize the moment!
  • The goal for a successful merger/acquisition of 1+1=3 can be achieved!

Scott C. Nevins