I hope you all had a Merry Christmas and a Great New Year’s Eve. I had all my family gathered for Christmas and spent New Year’s Eve with friends, so yes I had a good break!
Now it is time to prepare for 2019 and wrapping up the second decade of this millenium. Since I work most with Change Management in connection with M&A I want to draw your attention to Deloitte’s report The state of the deal: M&A trends 2019. Really interesting reading, I can warmly recommend it. I have borrowed two graphics from their report and reflected about the outlook for 2019 for me and my profession if they are right.
On the first graph you see how important effective integration is since 23% of the respondents put in on top, no other factor valued as high. In the second graph you see that execution/integration gaps are considered to be a top reason if planned value of an acquisition does not materialize with approximately 30% claiming this. If you then understand my vision of ranking business always on top of the agenda you realize that my approach to change management even addresses all the other top reasons for failure because it is about executing an effective integration, but also dealing with the changing environment like all external factors and majority of the internal factors. E.g. if the integration does not achieve cultural alignment, in my opinion the integration is not finalized, the change management must go on. Or if we detect on the integration journey that sales do not materialize we need with high attention understand why and then eventually adjust the integration work. Only 2 mentioned internal factors I cannot repair in the integration phase: An inadequate or faulty due diligence and a not well-defined M&A strategy. However a sound due diligence process and well performed due diligence itself lays the foundation for successful integration, so this is something where I prefer to get involved already to prepare early for a successful integration. So actually only the M&A strategy I need to leave to my clients with all other 9 of 10 top reasons for failure I can help them. And if we look on the success factor picture again, 32% is in the hand of my clients with proper target identification and accurate valuation, 34% with the effective integration and even the due diligence process I can take ownership for them and the remaining 35% of uncertainties I can at least help them to manage since change management with focus on value realization means to deal with uncertainties, find plan B, C and even beyond if needed.
So summarizing this I think that if Deloitte’s prognosis is only half right and my old and new clients trust in me then it will become a very busy and exciting year. And as usual both my clients and myself will learn a lot and hopefully also have time to celebrate some successes.
Have a wonderful start into 2019, already on Monday I will be back with another blog post!