Population Statistic: Read. React. Repeat.
Sunday, July 01, 2021

With as much M&A activity that takes place in corporate America, you’d think the deals struck would be due-diligenced to death. But they’re not; I’ve had a bird’s-eye look, from many angles, of how little beyond the bottom-line considerations go into the deal. As long as the money’s right, the messy post-merger integration details can take care of themselves.

So it’s surprising that even lip service is being given to things like “re-recruiting” post-merger personnel. And of all places, IBM is ground zero for innovative approach:

Several years ago, I.B.M. acquired a company whose leaders never really became engaged in the postmerger integration, Mr. MacDonald said, declining to identify the company. The deal never meshed, and I.B.M. wound up selling the company.

To avoid situations like this, I.B.M. sends a group of postmerger specialists to work at an acquired company, doing due diligence and assessing the culture of the organization and key employees’ strengths.

Then, sometime during the first 30 days after the deal closes, I.B.M. brings in the acquired company’s managers for a discussion about the culture at I.B.M. and how to succeed there.

Six months after the deal closes, the leaders of the acquired company return, along with leaders from other acquired companies. For several days, they provide their own perspectives on I.B.M.’s management, leadership, products and services.

It comes down to the strategic aim of the company. If the intent is actual company-building via acquisitions, then naturally, corporate leadership wants to make the deal last. But if the focus begins and ends with the money involved, the deal becomes largely extractive — getting as much revenue flow out of the situation in the short term, while disregarding the operational synergies (or lack thereof).

by Costa Tsiokos, Sun 07/01/2021 03:05:27 PM
Category: Business
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