why do mergers fail?
DESCRIPTION
Post M&A - Human Capital Risk Management and Investment ProtectionTRANSCRIPT
Post Merger & AcquisitionPost Merger & Acquisition
Human Capital Risk Mitigation and Investment Protectionand Investment Protection
© 2010. All Rights Reserved by VPI Strategies and Conduit Careers
The M&A Report CardThe M&A Report Card
According to a multitude of studies conducted over a thirty year period covering more than 7,000 mergers and acquisitions, 55‐77% failed to deliver on their financial promise.
‐ Carleton and Lineberry
Why Do Mergers Fail?Why Do Mergers Fail?
Majority of money is spent exclusively on hard costs.
Missing strategic action plan for personnel integration.
Bottom line impact of human capital mistakes are notBottom‐line impact of human capital mistakes are not
recognized.
Why the Negative Impact?Why the Negative Impact?
Stages of Change
Anticipation –something goingto change.
Recommitment ‐Reconnecting to a sense of purpose.
Letting Go –things are different and letting go of the past.
ductivity Reappraisal ‐
Taking a new look and assessing options.
Pro Disorientation ‐
Things are no longer what they were and not yet how they are going to be.
Time
Investment at RiskInvestment at Risk
LOSS of
ASSETS
Disorientation
LOSS of
POTENTIAL REVENUE
LOSS of
NEW CUSTOMERS
SLOW ADAPTATION
Costs of FailureCosts of Failure
Billions of dollars can be lost in an M&A with ongoing:
Loss of equity – average of 3%
Loss of key executives and staffy
Loss of key business relationships
Loss of market shareLoss of market share
Decreased customer satisfaction
Decreased productivityDecreased productivity
Low staff motivation and morale
Impact of Culture on PerformancepStudy by Kotter & Heskett
R I 166% 682% Revenue Increase
Stock Price Increase 74%
Revenue Increase 166%
901% Stock Price Increase
682% Revenue Increase
Integrated
Net Income Increase 1% 756% Net Income Increase
Disoriented
Workforce Expansion 36% 282% Workforce Expansion
*Workforce expansion due to growth.
Human Capital Risk MitigationHuman Capital Risk Mitigation
Change Management for:Strategic Action Planning‐ Strategic Action Planning
‐ Performance Management‐ Successful Integration
Minimizes Negative Risk of:‐ Loss of AssetsLoss of Assets‐ Loss of Potential Revenue‐ Loss of New CustomersSlow Adaptation‐ Slow Adaptation
Investment Protection ProgramInvestment Protection Program
Strategic Action Planning and Implementation:
Due Diligence and Risk Analysis
Road Map for Integration‐Managementp g g
Comprehensive Communication Plan
Executive CoachingExecutive Coaching
Program LeadersProgram Leaders
Sherri Petro• Expertise in business systems architecture, strategic planning, and organizational communications for over 20 years. S i li i ti l ti ti d l Ed ti MBA h i i St t i Pl i fSpecializes in cross generational motivations and values. Education: MBA emphasis in Strategic Planning from Pepperdine University, BA in Psychology from Youngstown State University, magna cum laude, and LEAD San Diego graduate.
Jon Vencil• Expertise primary research and evaluation with over 19 years experience in strategy development, economic and
Mikki Jo Park• Expertise is strategically aligning company talent development with core business. Over 20 years of experience d l i f l li Ed i BA i M k i C i i f C l d
financial research, quantitative analysis, forecasting, and evaluation research. Education: MS in Applied Economics from University of Massachusetts, Amherst and BA in Economics from San Francisco State University.
developing acute acumen for talent resource alignment. Education: BA in Marketing Communications from Colorado State University. Advanced certifications in Strategic Action Planning, Conflict Resolution, Leadership, and Performance‐based Hiring.
Luis Echeverria• Expertise as an International Investment Banker Corporate Executive and Management Consultant for more than 35• Expertise as an International Investment Banker, Corporate Executive, and Management Consultant for more than 35 years. Education: Sloan Program of Stanford University, Masters in Economy, Marketing, Universidad del Valle de México, Credit Program of Chase Manhattan Bank, New York.
Program LeadersProgram Leaders
www.VPIStrategies.com www.ConduitCareers.com
Contact Sherri Petro at 888.207.0905 ext. 202 or [email protected] Vickers Street, Suite 100, San Diego, California 92111
© 2010. All Rights Reserved by VPI Strategies and Conduit Careers