Tom Lombardi's blog
What do arranged marriages and their analogue in the business world, post-merger Integration, have in common? The answer: long termed success starts with getting the match right in the first place.
Here’s a telling statistic. According to UNICEF and Human Rights Council, the average divorce rate globally in the case of arranged marriages is 4%. In India, where 90% of marriages are arranged, the divorce rate is 1.1%!
Contrast Post-Merger Integration. According to McKinsey and Co., nearly 80% fail to recover the costs incurred in the deal, and fully half of deals result in reduced profits, reduced productivity or both. Add to this years of fear and instability on the part of employees and their local communities, and … you get the picture...
Why sign up for the pain of team interdependence? Because team interdependence is a key to high performance. And in this age of "team", high performance sets us apart.
And what is this pain all about? It is the cost of forging mutually dependent relationships. Really, the cost of conflict. And conflict, especially with those we trust and respect, can be painful.
The purpose of this post is to test for this pain and remind ourselves that the pain is worth it. In fact, if teams and organizations knew the rewards hidden on the other side of conflict, they would line up to practice it. Our default mode is to write, teach, and consult on the subject, anything but actually do it. Let's agree there is no time to waste...
Post merger integration -- can the marriage thrive? This question should probably be asked before a deal is consummated. Just like a smart couple assesses compatibility before tying the knot, it is possible in my experience to assess compatibility between businesses, pre-deal. So, can better dating lead to a better match and therefore better outcomes?
Most business leaders would, of course, say yes. But in reality, most leave culture alignment issues and questions "for later". But at what cost? What if there were an efficient technology to measure partnership fitness on this side of the altar? Would it even be utilized?
To hear him tell the story, my client would say he heard the alarms and should have paid attention, but instead he practiced selective listening and outright denial. After all, he needed the IT capabilities of this small technology company, and needed them fast. So he overcame objections, and powered through the negotiation.
It wasn’t until 18 painful and unproductive months later...