Enough Is Enough
by Peter Block
Tick Tock, Your Life Is Like A
Sorry We're Closed: Diary Of A Shutdown
Merger And Acquisition:
Pick up a copy of The Wall Street Journal and the headlines read like a bragging contest. In fact, the following recipe can be used to write a headline for any given day: (Insert Fortune 500 company name here) Announces Planned Merger With (Insert 2nd Fortune 500 company name here) To Form (Insert catchy name of new multinational company here).
Please note: When forming new company name it is crucial to reference the names of both previous companies. This can be done with hyphens, dashes, slashes, or the ever-popular word jumble, which blends the first half of one company name with the second half of the other company name. If both companies can't agree on a name be sure to have a cute mascot at the merger announcement. This will offset the flagrant lack of name hyphenation and help calm investors' woes.
Merger mania is sweeping the business world. As companies rally around the cry that "bigger is better," new hugorations (a merger between the word huge and corporations - note the catchy jumble of the two words, thus explaining the lack of a cute mascot for this article) appear almost daily.
But according to management consulting firm Towers Perrin, more than half of all planned mergers fail. So many of these mergers and acquisitions - deals that promised excellent results on paper - ultimately succumbed to one or more of the "Merger and Acquisition Seven Deadly Sins."
According to Towers Perrin the
following will damage a merger past the point of cute
mascot repair. Companies that wish to successfully
navigate the post merger announcement phase must first
"With some 50 percent of all combinations failing, it's incumbent on the management of the two companies to do everything in their power to get it right," states Jeffrey Schmidt, a managing director with Towers and Perrin.
How can merging companies "get it right?" The keys to success lie in coordinating actions and communicating changes in management systems, operating practices and administrative processes to key stakeholders.
The following are several steps that
have led to successful mergers:
These steps should ease the trauma associated with joining two companies together. Note that the underlying theme to all of the steps include communication and planning. If you fail to take these steps be prepared to come up with a catchy jumbled name and a cute mascot for the press conference.