Change management and cultural integration have the largest impact on M&A success, according to a new study by West Monroe Partners, a business and technology consulting firm, and Mergermarket, a media company specializing in corporate financial news and analysis.
The study found that 67% of executives believe that cultural integration is vital to deal success. Yet, more than half report value was left on the table in their deal due to lack of attention to cultural differences.
Furthermore, many organizations fail to involve the acquired company in the integration process. Only 50% of execs had the acquired company's management on the integration team, while only 25% used other key acquired staff members during the transition.
In fact, more companies are starting to realize the importance of change management. According to the study, 94% of company executives said they would place more emphasis on organizational change management in future integrations.
"Ignoring [the change management] aspect can put organizations in a tough position and end up reducing deal value," says Steve Sapletal, a director in West Monroe Partners' Minneapolis office. "Lack of attention to culture can also affect how the deal will turn out. While 67% of company executives believe cultural integration is vital to deal success, more than half said that value was left on the table in their deal from failing to properly merge cultural differences."
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