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The Human Side of M & A

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The Human Side of M & A

Leveraging the Most Important Factor in Deal Making

Oxford UP,

15 min read
10 take-aways
Audio & text

What's inside?

The "soft" factors – people and culture – are the hardest to manage in an M&A, and they can make or break your deal.

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Editorial Rating

7

Qualities

  • Applicable

Recommendation

During the 1990s, mergers and acquisitions (M&A) hit a historic high. Yet academic research confirms what anecdotal evidence suggested: most mergers do not work. Authors Dennis C. Carey and Dayton Ogden (writing with Judith A. Roland) contend that most mergers fail because of mismanagement and neglect of the merged company’s "soft side" - the cultural and human dimension. They draw on their experiences as human resource consultants to outline a strategy for assessing people, creating vision, integrating mergers and addressing the soft side’s hard problems. getAbstract finds that the book’s greatest strength is its interviews with executives and other insiders who have direct experience with high-profile mergers, both successes and failures. If you are an executive or human resources manager in a company on either side of a merger - or if you think you’ll find yourself in that position in the future - read this book before you sign that deal.

Summary

Why Some Mergers Succeed

The world has never seen merger-and-acquisition activity on a scale comparable to the frenetic pace of the 1990s. Yet, according to some estimates, more than two-thirds of announced mergers fail to take place, and even when they happen, they are less profitable than anticipated. The success of a merger hinges on the following critical elements:

  • Sound strategy - Merger or acquisition must be the appropriate strategic response to the business situation.
  • No hidden pitfalls, traps or dangers - Insist upon thorough due diligence to ensure that no previous legal or accounting issues will cause problems in the future. Conduct "cultural" due diligence as well.
  • Human capital - The right people must be in place and able to do the job.

Follow these guidelines to minimize your risk and improve your long-term prospects for a successful merger:

  • Make your goal clear - As a leader and manager, you should have no doubt about the purpose of the merger. Establish milestones. Check progress regularly so you know if the merger is going in the right direction.
  • Believe - Have faith in the merger, make a personal...

About the Authors

Dayton Ogden is the chairman and Dennis C. Carey the vice chairman of a leading executive search firm. They are co-authors of CEO Succession.

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