Concord, MA, June 25, 2007 --(PR.com
)-- When companies are acquired or merged, their executives seek a shared vision of strategic and financial success.
Fran Grigsby, an expert on developing new markets and revenue streams, says, “Executives who have led successful mergers and acquisitions underscore several hard truths that must be faced.” These truths from Ms. Grigsby are:
There is no such thing as a merger of equals.
The word merger is frequently the optimistic vision of executive teams. It is a well-meaning fiction. No matter what it is called, one side ultimately comes out on top. “Executives must prevent power struggles within the organization, explained Ms. Grigsby. “They must fill key management positions early and choose products to be retained or eliminated.”
The deal depends on where you are going, not where you are.
If leaders cannot articulate future visions, they discount company value. Where an industry is in turmoil a believable vision is extraordinarily hard to generate. The M&A event is part of your strategy, and should be seen as building a desired future. “However difficult, create a story that you believe that the new company can execute,” Ms. Grigsby said.
If you don’t know who you are, great financials won’t tell you.
Real preparation for due diligence is not just the job of the CEO/CFO. It means understanding core competencies and key assets, so that every executive glows with identical knowledge and vision. When both sides of a merger have this clarity, a strategy emerges that applies the best of your assets to shape the new company.
The real merger happens after the merger.
Integrating product lines, operations, marketing, and people is extraordinarily difficult and time consuming. No matter how fast companies move, creating a single entity soaks up cost savings and loses customers. “Focus first on customer-facing systems so sales and support can do their jobs,” Ms. Grigsby advised. “And, make sure that sales compensation is aligned with your new strategy.”
Integration teams don’t integrate.
Most merging companies create a transition team made up of executives from both sides. But, political agendas and conflicting cultures produce choices that are too high level or one-sided. Integration teams need strong leadership to make their decisions actionable. “Collaboration is essential at this level, so expert facilitators are frequently useful,” Ms. Grigsby said.
This is a time for top down direction, not collaboration.
When mid-level teams and individuals are asked to collaborate, power struggles ensue. A speedy decision is better than a perfect decision, so executive teams should make and communicate detailed decisions. This gives working teams the opportunity to execute with excellence.
About Fran Grigsby
Fran Grigsby is Founder and Managing Partner of consulting firm Next Level International www.nextlevelinternationalcom, which helps businesses enter new markets. She has been guiding corporations through critical growth challenges for 25 years. Ms. Grigsby held executive posts at corporations including Giganet, Motorola and Digital Equipment Corporation. Harvard Professor Rosabeth Moss Kanter featured Ms. Grigsby’s leadership in the bestseller The Change Masters.
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