[Business Insider] How To Beat The Odds And Have A Smooth M&A Transition

Smooth M&A Transition

Jim McClung, SMB Operating Partners | Jul. 18, 2011, 5:07 PM |21 |
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Jim McClung

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Jim McClung is a managing partner at SMB Operating Partners.

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It’s not a secret that the competitive landscape of our global community is rapidly changing.So, it makes sense that, in reaction to globalization, technological advances, global outsourcing and the fluctuating global economic climate, approximately 45,000 mergers and acquisitions were transacted around the world in 2010.

Unfortunately, research shows that between 50 and 80 percent of all acquisitions fail, while nearly 70 percent of mergers fail to achieve their anticipated value. Nearly two-thirds of newly-merged companies may have been better off before they merged than after.

Mergers and acquisitions shouldn’t fail, and success is, most often, directly related to talent management.

Many companies fall short of achieving their goals following a merger or acquisition after choosing to hire from within, filling the position with a promising executive who lacks the necessary depth and breadth of experience. The thinking goes, “He/she has always succeeded before, why not in this situation?”

The difference between success and failure of an M&A integration, is often determined within the first 12 months.  The right talent with the right experience and operational savvy is an imperative.  While the promising executive may someday climb his or her way to the CEO position, it is unrealistic to assume he or she will reach that potential overnight. A viable solution for many companies is to acquire that experience in the form of an interim executive.

An interim executive is a hands-on senior executive whose background matches specific criteria necessary to achieve measurable business objectives. With unparalleled experience and objectivity, an interim executive ensures an efficient and effective path to a successful M&A. Additionally, they don’t pose any sort of threat to existing management, but rather offer mentorship as they lead the company through what can often be a high-tension transition.

While a company simultaneously searches externally for a permanent CEO, an interim executive hits the ground running. He or she has already seen—and accomplished—it all.  Offering more than insightful consulting alone, the interim executive offers a hands-on approach with a results-driven mind. Time is precious in a merger or acquisition, and they will implement their strategy quickly. When the newhire sits at his or her desk, the interim executive will have already tackled the transition phase; the new CEO will not have to perform damage control, reserving focus for forward momentum.

SMB Managing Partners are executives solving transition challenges. They use an innovative team-based approach that involves an on-site operating partner coupled with an SMB Managing Partner to ensure a speedy objectives-based high quality outcome for each assignment.SMB Operating Partners is located at 401 N. Michigan Avenue, Suite 1300, Chicago, IL 60611. For more information, please visit http://www.smbop.com or call 312-924-1547

 

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