Acquisitions: How to Avoid Implementation Pitfalls and Improve the Odds of Success

Acquisitions: How to Avoid

Implementation Pitfalls and

Improve the Odds of Success

The author examines the most common reasons acquisitions fail to meet the buyer’s objectives, and

presents field-tested approaches for minimizing or

avoiding these problems. The time for taking preemptive measures is before the deal is closed, and

careful integration planning is the best investment

the buyer can make. Specific recommendations, several illustrated with actual cases, include a structured process for integration planning that involves

the seller; the “Day One Plan”; setting realistic expectations for an integration timetable; protecting

“soft assets”; reducing seller apprehension in the

due diligence process; and selecting an acquisition

team with cultural savvy and interpersonal skills.

© 2007 Wiley Periodicals, Inc.

Depending on which data you choose to accept,

somewhere between two-thirds and three-fourths

of most acquisitions tend to destroy intrinsic value

within the first year. Very few acquisitions truly

“fail” in the strictest sense of the word, but the large

majority fail to meet the buyer’s projections or expectations, at least in the time frame originally projected. On average, it takes between two and four

years before it is possible to truly determine if an acquisition is working, delivering the value, and meeting critical objectives as planned. Those not meeting

their goals are usually spun off by the buyer at a loss

of value and overall core competency as compared

with the original purchase.

In shepherding both buyers and sellers through

the acquisition process, my colleagues and I have

witnessed the same issues—many of them peoplerelated—time and again. In alerting the reader to

these issues, and sharing approaches we have found

DAN G. WATSON

effective for averting these problems before they begin to derail performance, I hope it may be possible

for the reader—whatever side of the deal he or she

may be on—to enhance the...