breakpoint human capital management
For the people.
Screen Shot 2017-04-06 at 11.35.49 AM.png

blog

Insight & Action

Breakpoint was founded on the notion that we could help people and organizations succeed by bringing them expert, candid advice and an outside perspective on their business. So whether you’re a C-suite executive who needs to think differently or a potential client seeking a new business partner Breakpoint offers a fresh perspective that helps to navigate the curves ahead.

 

Looking for the "I" in M&A

"The acquisition on paper, looked like a jewel," Mr. Brown said in an interview. "The cultures did not come together well". (Globe and Mail, June 11, 2016)

Globally, companies in 2015 spent $4.7 trillion dollars buying one another. The mean average value of each merger or acquisition was $124.5 million. The failure rate of these mergers and acquisitions ranges from 70% - 90%. Why do so many transactions fall short of expectations. The success or failure of a merger or acquisition lies in the nuts and bolts of integration.

A key element of a successful business model and often overlooked in mergers and acquisitions is People. Why are people so important? Profit formulas and processes don't exist apart from the people. The risk executives take is too often believing that they can integrate the newly acquired people resources into their own.

"I am an aggressive investment banker," he said. "And I'm aggressively turning the culture of this organization, and I'm aggressively ensuring that our employees pursue our objective. And our objective is to maximize our share price. And if that's aggressive, then I'm guilty as charged"

"Numerous long term employees who have left the firm said the internal culture has deteriorated to the point of being unrecognizable from what it once was. The team spirit that once characterized the Vancouver - based dealer, they say, has been dropped in favour of an "every man for himself" mentality."

A successful merger or acquisition understands the integral relationship between profit - process - people, tests the compatibility and develops capability. Building scale and driving down costs are the goal. The critical required resource is People whether as a business leader you are responsible for improving current performance or challenged by reinventing your organization. While that sounds simple - it is not. Driven by the demand to meet stakeholder expectations, the conditions under which mergers and acquisitions occur are highly specific. As a business leader pushing the leading edge of performance you should understand the full potential of both businesses before the transaction and assess the integration plan for the People resources. It will help avoid disappointment. 

M&A, Morning Coffee, StrategyMichael De BonisComment