Connecting The Dots: M&A performance

Getting M&A to deliver has always been hard. The enticing promise of new customers, enhanced capabilities and of course increased profits is all there for the taking, but the taking is rarely as easy as originally hoped. Most who have seen even a few acquisitions will recognise some of the classic symptoms post-close: operating costs that stubbornly go up instead of down; painful jags as new processes and systems are introduced; chronic management distraction; and loss of some of your best people just when you thought the dust had settled.

That’s not to say that all M&A encounters such turbulence, but even those that don’t still frequently fail to deliver all that was promised. According to a recent paper by Harvard Business Review, study after study still puts the failure rate of mergers and acquisitions somewhere between 70% and 90%

And here’s the thing: Despite years of academic study, corporate experience and maturing best practice, for most firms this situation is clearly not improving. Current studies of long-term M&A success largely mirror those conducted a decade or more ago. Despite the years, the research...