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“ By most accounts, the M&A failure rate is somewhere between 70 to 80 percent. ”
- CFO.com
Today’s challenging business environment demands that companies continuously gain knowledge and expertise, introduce new products and services and expand market share to grow critical mass in increasingly complex and competitive markets. As companies turn to mergers and acquisitions as part of their strategy to achieve these objectives, a majority of these companies fail to realize expected goals.
While the tactical aspects of the integration, such as which facilities will remain open and which employees will report to whom are relatively straight forward, the most pressing and difficult part is creating a unified corporate culture. Integrating one culture with another is a very delicate process, and for companies to see the gains they originally sought in the merger or acquisition the alignment of people and process is the critical success factor.
PowerSkills Solutions has assisted both small companies and Fortune 500 companies successfully streamline the process of integrating new acquisitions and mergers of equals and unequals. Our relationship-centric approach quickly aligns the resulting combined management team and helps build support throughout the organization.
Client Case Study
Client:
A top-tier venture firm contacted PowerSkills to assist a young, talented CEO of one of their portfolio companies in the Internet Infrastructure space that had just completed terms of an acquisition of an organization 5 times its size.
Issues:
The then CEO was grappling with the ability to focus on the details of this mega-merger of management teams and developing a strategy to maximize the business value. The companies were located on opposite coasts and the cultures of the two organizations were completely different.
Solution:
PowerSkills did a complete assessment of the entire management team on both sides. We completed 80 interviews with senior managers and created cross-functional, cross organizational integration teams to restructure the executive group. The organization was re-aligned into market segment focused divisions.
To create the customer focus that was the reason for this acquisition, PowerSkills facilitated in creating a new executive-level position, VP of Customer Care, and created a VIP program. In addition, a new vision and mission statement were produced to reflect the new organization.
The Results :
smooth transition bringing together the two organizations. The cultural difference was overcome and the acquisition was successful- resulting in increased revenues through the synergy of the complimentary offerings. The company was one of the few survivors of the dot com meltdown and today is 8 times its size with revenues exceeding a billion dollars.
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