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M&A Integration: Timing is everything
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We all follow the progress, sometimes in fits and starts, of major M&A deals played out in the business media spotlight: XM and Sirius, Whole Foods and Wild Oats, AT&T and BellSouth, to name a few. Some are non-starters due to regulatory interventions, while others progress seemingly without a hitch. But the best M&A stories happen behind the scenes. They are the ones we rarely hear about until a merger fails. Think DaimlerChrysler or AOL Time Warner and the postmortem revelations of mismatched internal cultures, divergent management styles and failure to deliver on anticipated synergies.
Speed of integration is a major reason that mergers flop. Leaders fail to recognize the direct correlation between speed of integration and fluctuations in organizational vital signs, such as productivity, value, market share and key employee retention. Within two and half years of its merger, AOL Time Warner's stock had fallen more than 70 percent as the company failed to demonstrate that it was indeed a mega-match made in heaven.
As the premiums on acquisition targets have risen lately, so has the cost of failure. More than ever, the onus is on private equity firms and acquiring companies to have the right leadership and implementation timeline to protect their investment.
Immediately after the announcement of a deal, productivity typically dips. This is a logical response to feelings of ambiguity and "water cooler talk" among employees. Faster decision-making and visible movement through the integration process minimizes the impact of this trend. Coincidentally, companies realize higher shareholder value faster with rapid integration.
Impediments to fast integration can be external and may include regulatory scrutiny or uncertain financing. But more often, slow and uncertain integration emanates from within. And it grows out of an inability or unwillingness on the part of management to make positive decisions and communicate about them effectively. Those shortcomings are usually due to a lack of understanding or fear of failure, such as:
How do we quickly merge two sales forces without hurting revenues, which are critical to quarterly results?
How do we announce changes to the leadership structure without loosing key talent?
Do we have the infrastructure to handle new combined call center functions?
Incidentally, the later of the two possible external impediments (financing) is minimized when an integration is executed more quickly. If prime markets continue to falter, it will become harder and more expensive to borrow money. That ratchets up pressure to maintain shareholder value through a short and well-executed integration.
Let us show you how Corporate Performance Strategies helps companies maximize the value of M&A transitions. Call 770-587-2265 today.
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Executive Leadership: How to manage the coaching process
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Coaching is often incorrectly viewed by corporate leaders as a subjective or amorphous process. But the science of professional coaching is just that - a science. It is standards and outcomes-based, and it is delivered by a practitioner with professional credentials. A successful coaching relationship will include:
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A qualified coach
- A defined process
- Links to the organization's strategic plan
- Quality assurance
- Measurement of impact and results
Meet Corporate Performance Strategies executive coaches, and learn how we improve performance in measurable ways. Call 770-587-2265 today.
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Is your HR out of alignment?
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Human resources is not an island unto itself. The HR function of an organization should positively reinforce the goals and strategies being pursued and communicated throughout the organization. A misaligned HR operation does more harm than good. Ask yourself, are you putting your money where your mouth is?
At Corporate Performance Strategies, we show companies how proper HR alignment drives organizational performance. Call 770-587-2265 today.
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Succession planning begins with a full talent pipeline
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There are certain key leadership positions in every company - from c-level executives to critical staff managers - about which any CEO would say, "we simply can't live without that person." The best way to ensure you never have to test that statement is to build a leadership pipeline worthy of your succession plan.
Best practices for the talent pipeline:
- Build a solid foundation
- Formalize and publicize
- Develop leaders through assignments
To learn more about how Corporate Performance Strategies can improve your talent pipeline, call 770-587-2265 today.
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