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Mergers
Leadership, Performance and Corporate Health
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i>How can CEOs and other senior managers define a merger leadership role for themselves that adds significant value to the work of integration teams?
While merger catastrophes continue to grab headlines, a small but growing number of companies have learned to avoid the common mistakes and to reliably achieve respectable outcomes for their mergers and acquisitions. These companies have built deep integration capabilities that give them a major head start each time.
However, many of the CEOs of these advanced integrators remain dissatisfied. Their mergers may have been successful in the narrow terms of synergy realization and other short-term project goals, but from a wider perspective they were less healthy for their organization than they could have been. Particularly frustrating for many of these CEOs is the fact that they remain unsure what they themselves could do differently the next time.
The authors of the present volume have thoroughly researched this critical but widely neglected need. Drawing on their own extensive integration experience, on that of almost thirty executives, on the systematic analysis of 167 mergers, and on cutting edge academic research, they identify five common leadership challenges to be tackled for the achievement of what we call 'corporate health', the most thorough and sustainable test of merger success:
1) Create the new company at the top before the close
2) Place the merger communications within the context of the corporate story
3) Develop the performance culture needed for the new company
4) Become an active champion for crucial external stakeholders
5) Identify the need for and undertake integration-critical learning in real time
'Mergers is a refreshing glimpse into the classic dilemma of making
acquisitions that actually work. By shifting the spotlight from
integration teams to executive leadership, the authors sketch a smart
and yet unexpected playbook of the 5 essential actions that only senior
executives can take. A must read for executives at both buyers and
sellers.' - Kathleen M. Eisenhardt, S. W. Ascherman Professor of Strategy, Stanford University, Co-author, Competing on the Edge: Strategy as Structured Chaos
'Mergers: Leadership, Performance and Corporate Health is not just for those who are contemplating mergers and acquisitions. There is much in the book that is of value to any business leader looking to improve corporate health. It contains simple but powerful truths about communications, management structure and customer care that we all need to apply.' - John Varley, Group Chief Executive, Barclays Bank PLC
'The authors have combined their professional experience, advising leading CEOs, with a detailed academic understanding of the issues surrounding mergers to produce a provocative guide on how CEOs can move their companies to a higher level of performance through an expansive view of merger integration. It is an approach CEOs will have to emulate as the merger game gets tougher and more expensive and the payback ever more elusive.' - Larry Glasscock, CEO of Wellpoint (largest US health care ensurer)
'... this is a thorough analysis that should be required reading for any CEO embarking on any... M&A programme, if they want to improve the probability of success...' - Professional Manager
The Elusive Healthy Merger
Creating the New Company at the Top
Communicating the Corporate Story
Establishing a New Performance Culture
Championing External Stakeholders
Fostering Momentum and Learning
Shaping Your Leadership Role
Works Cited
Acknowledgements
DAVID FUBINI is a Director of McKinsey and Company, Inc., United States/Boston Office. He is the long time leader of the Firm's Worldwide Post Merger Practice and has also served as the North American Leader of the Organization Practice. He also led the Boston Office of the Firm for over a decade. Fubini has been with the firm for over 25 years, during which time he has led efforts for over two dozen of the world's largest mergers & acquisitions. He has also worked extensively in the area of organization transformation improvement. He is a graduate of the Harvard Business School.
COLIN PRICE is a Director at McKinsey and Company, where he also is the Global Knowledge Leader for the Organisation Practice. Price has consulted on organisation design, leadership development, behavioural change and post merger management for two decades in over 50 countries, and has advised many of the globe's largest corporations. Price holds a Visiting Professorship at The School of Management, University of Bath. He holds degrees in Economics, Psychology and Organisation Behaviour.
MAURIZIO ZOLLO is the Shell Fellow in Business and the Environment and Associate Professor of Strategy at INSEAD. His research over the last 12 years has focused on the development of superior organizational capabilities in the management of mergers, acquisitions, strategic alliances and stakeholder engagement processes. At INSEAD, he teaches on these topics at all levels, from MBAs to senior executives. He regularly consults with major corporations on corporate development and social responsibility issues. He holds a Ph.D. in management from the Wharton school at the University of Pennsylvania.
Description
i>How can CEOs and other senior managers define a merger leadership role for themselves that adds significant value to the work of integration teams?
While merger catastrophes continue to grab headlines, a small but growing number of companies have learned to avoid the common mistakes and to reliably achieve respectable outcomes for their mergers and acquisitions. These companies have built deep integration capabilities that give them a major head start each time.
However, many of the CEOs of these advanced integrators remain dissatisfied. Their mergers may have been successful in the narrow terms of synergy realization and other short-term project goals, but from a wider perspective they were less healthy for their organization than they could have been. Particularly frustrating for many of these CEOs is the fact that they remain unsure what they themselves could do differently the next time.
The authors of the present volume have thoroughly researched this critical but widely neglected need. Drawing on their own extensive integration experience, on that of almost thirty executives, on the systematic analysis of 167 mergers, and on cutting edge academic research, they identify five common leadership challenges to be tackled for the achievement of what we call 'corporate health', the most thorough and sustainable test of merger success:
1) Create the new company at the top before the close
2) Place the merger communications within the context of the corporate story
3) Develop the performance culture needed for the new company
4) Become an active champion for crucial external stakeholders
5) Identify the need for and undertake integration-critical learning in real time
Reviews
'Mergers is a refreshing glimpse into the classic dilemma of making
acquisitions that actually work. By shifting the spotlight from
integration teams to executive leadership, the authors sketch a smart
and yet unexpected playbook of the 5 essential actions that only senior
executives can take. A must read for executives at both buyers and
sellers.' - Kathleen M. Eisenhardt, S. W. Ascherman Professor of Strategy, Stanford University, Co-author, Competing on the Edge: Strategy as Structured Chaos
'Mergers: Leadership, Performance and Corporate Health is not just for those who are contemplating mergers and acquisitions. There is much in the book that is of value to any business leader looking to improve corporate health. It contains simple but powerful truths about communications, management structure and customer care that we all need to apply.' - John Varley, Group Chief Executive, Barclays Bank PLC
'The authors have combined their professional experience, advising leading CEOs, with a detailed academic understanding of the issues surrounding mergers to produce a provocative guide on how CEOs can move their companies to a higher level of performance through an expansive view of merger integration. It is an approach CEOs will have to emulate as the merger game gets tougher and more expensive and the payback ever more elusive.' - Larry Glasscock, CEO of Wellpoint (largest US health care ensurer)
'... this is a thorough analysis that should be required reading for any CEO embarking on any... M&A programme, if they want to improve the probability of success...' - Professional Manager
Contents
The Elusive Healthy Merger
Creating the New Company at the Top
Communicating the Corporate Story
Establishing a New Performance Culture
Championing External Stakeholders
Fostering Momentum and Learning
Shaping Your Leadership Role
Works Cited
Acknowledgements
Authors
DAVID FUBINI is a Director of McKinsey and Company, Inc., United States/Boston Office. He is the long time leader of the Firm's Worldwide Post Merger Practice and has also served as the North American Leader of the Organization Practice. He also led the Boston Office of the Firm for over a decade. Fubini has been with the firm for over 25 years, during which time he has led efforts for over two dozen of the world's largest mergers & acquisitions. He has also worked extensively in the area of organization transformation improvement. He is a graduate of the Harvard Business School.
COLIN PRICE is a Director at McKinsey and Company, where he also is the Global Knowledge Leader for the Organisation Practice. Price has consulted on organisation design, leadership development, behavioural change and post merger management for two decades in over 50 countries, and has advised many of the globe's largest corporations. Price holds a Visiting Professorship at The School of Management, University of Bath. He holds degrees in Economics, Psychology and Organisation Behaviour.
MAURIZIO ZOLLO is the Shell Fellow in Business and the Environment and Associate Professor of Strategy at INSEAD. His research over the last 12 years has focused on the development of superior organizational capabilities in the management of mergers, acquisitions, strategic alliances and stakeholder engagement processes. At INSEAD, he teaches on these topics at all levels, from MBAs to senior executives. He regularly consults with major corporations on corporate development and social responsibility issues. He holds a Ph.D. in management from the Wharton school at the University of Pennsylvania.
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