There are many disappointing stories about failed integrations of acquired companies and the inability of the merger to produce the expected results; e.g. Daimler-Benz and Chrysler. After an acquisition, the acquired company may cause the buyer's financial performance deteriorates; e.g. Compact and HP. Or, the executives of each company are distracted by their efforts to make the integration work and lose focus on maintaining effective day-to-day management operations for each business; e.g. Quaker Oats and Snapple. Key executives frequently lose their jobs or simply leave for another company when the acquired company fails to merge successfully; e.g. Carly Fiorina at HP. Employees of both companies may become ungrounded and territorial, as political maneuvering sets in as standard practice for the limited number of employee seats that will remain after the two companies are integrated; Wells Fargo and Wachovia.
Successful integration of an acquired company is a major undertaking, and the level of intellectual capital and employee effort should not be underestimated. If the acquired company is to be integrated with the buying company, then it's safe to say that the larger the size of the acquired company, the greater the integration effort and resource requirements will be needed.
The importance of the right leader for the integration cannot be underestimated, and a senior executive or senior manager should be assigned the responsibility. The leader can be selected from either the acquired company or the firm that made the acquisition. This individual should be the person who selects the integration team members. These employees should have good reputations within the company and be proven responsible in terms of completing assignments. Team members will require a safe rite of passage while executing the integration and must have a guaranteed position with the company after the integration is completed.
Wholescale Change is a highly interactive and participative approach to change which seeks a paradigm shift - to guide the workplace away from centralized management and toward a more participative style. It helps organizations uncover and engage the combined knowledge and wisdom of their people to better utilize their own abilities to grow, change and lead. It seeks to implement change quickly and effectively throughout the organization supported by ongoing processes. Through highly interactive small and/or large group sessions, diverse people strive to take action toward a shared vision, working as a "whole" and individually.
Consultant's Consultants have been called Shadow consultants for nearly four decades. Marjan Shroder coined the term, shadow consultant, in 1972 while describing the informal process that consultant's have used between each other for as long as consultants have existed. Generally, he noted that the shadow consultant "at the request of a colleague (or team of colleagues) and by means of a series of discussions, helps assess—and, if necessary, change—that colleague's diagnosis, tactics, or role in a specific assignment". (Shroder, 1974, 580) The merit of the shadow consultant "lies in his noninvolvement, which makes it easier for him to keep track of the main issues, and to take the consultant's way of functioning into account; nevertheless, because different consultants stress different aspects of a project, the shadow consultant's contribution may also broaden the consultant's general professional skills and insights." (Shroder, 1974, 581)
Over the several last decades, mergers and acquisitions have become very common. Studies during this period indicate that up to 70% of M&As fail to meet expectations.* Frequently, a major contributing cause is the failure to fully address the cultural differences as occurred when Quaker Oats bought Snapple for $1.7 billion to add to the Gatorade success, only to sell it later for $300 million at a loss of $1.4 billion due in great part to massive cultural clashes.
*See Pautler, Paul A. (January, 21, 2003) The Effects of Mergers and Post Merger Integration: A Review of the Business Consulting Literature. Bureau of Economics, Federal Trade Commission for a thorough review of the research indicating these figures.
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