(This article appeared in Financier Worldwide and has been edited to comply with their editorial guidelines, which include UK spelling and grammar, and specific house styles for consistency.)
To be successful in acquisitions and integrations, we strongly recommend that organisations focus on some key numbers.
The first number to focus on is ‘70’, as in the Rule of 70/70.
Up to 70 percent of acquisitions fail to increase shareholder value and 70 percent of the reason for this has to do with what acquirers do (or do not do) in the integration planning and execution phase. What is frustrating is that this failure rate does not have to be so high. Companies undertaking mergers and acquisitions (M&As) need to focus on building in-house competencies and expertise in this area, just as they would other core business functions. Those companies that are committed to M&A excellence can stack the deck for success and become the 30 percent in the winners’ circle.
The next number to focus on is ‘3’, as in S3 for speed, synergy, and stability.