Capabilities
Mergers and Post-Merger Integration
Nearly two decades ago (Teaming Up for the 90's: A Guide to International Joint Ventures and Strategic Alliances by Timothy M. Collins and Thomas L. Doorley and subsequent Conference Board report) we determined than only 1 out of 3 mergers or acquisitions were successful, that is, generated a return above its cost of capital. More recently, Bain & Company and others (e.g. Right Management Consultants) confirm our finding. Further we and they conclude that sharp differences exist between how the successful and unsuccessfully operate to create value, post-merger, namely:
There is a dramatic correlation between the effectiveness with which culture issues are managed and the combined company's long-term business results - based on revenues, profitability, and stock price.
Nearly three out of every five acquirers don't plan effectively for the cultural integration of the two companies.
Skout’s tools, such as Management Drives, identifies cultural differences and provides guidance to the effective resolution of conflicts.
