Mergers & Acquisitions

Mergers and Acquisitions

Mergers and Acquisitions (M&A) are undeniably an integral part of the 21^st century economy. In the trend toward globalisation and homogenisation, M&A plays a major role. Among several, there are two predominant reasons that companies engage in M&A:

1. To gain economies of scale
2. To create a market presence

Unfortunately, many M&A deals fail to produce either of these two outcomes. Some estimates show that as many as two-thirds fail to produce the hoped for result. The reasons for this are probably many, but one thing we’ve seen is that merging companies tend to focus their energies internally and seem to forget altogether about their customers.

This is especially true, we’ve noticed, in merging sales forces. Cost cutting measures send chills through salespeople, who begin to worry more about remaining employed than about creating value for customers. Cultures clash, morale suffers and productivity declines.

How Huthwaite Can Help

Through thirty years of working with customers engaged in M&A, we have discovered a few basic rules for developing synergy among merging sales forces, including:

• Creating a common language as quickly as possible
• Developing a culture that is unique to the newly created entity
• Most importantly, keeping customers top of mind when working out new territories, new reporting structures and new strategies.

There is no reason that M&A can’t be successful as a business strategy, but it requires that you remember why you’re in business in the first place: the customer.