Mergers & acquisitions are complex ventures that have an alarmingly high failure rate. A primary explanation is that companies do not audit the one true factor that determines organizational success: people. This whitepaper provides practical guidelines to M&A success relative to the workforce. Specifically, you will learn: workforce risks that impact M&A; an approach to quantify workforce value; and an audit philosophy to assess the workforce.
When it comes to mergers and acquisitions, the statistics are sobering: Two-thirds of M&A deals don’t succeed because companies fail to meet their objectives. Indeed, according to a KPMG research report, 83 percent of mergers failed to unlock value. In the same research report, KPMG also noted that it is hard to find a merger where people issues did not matter. A fundamental reason is that, while most managers can talk about the execution tactics to close the deal, few can articulate what value or risk may be hidden in the workforce. As a result, whether you are the acquirer, target, or merger participant, failing to properly assess the workforce can have grave consequences to the value realization outcome.
As an executive or manager assessing the organization, it’s important to know what needs (or advantages) may exist. Why? Companies with superior human capital practices can create substantially more shareholder value than can companies with average human capital practices. The challenge is getting a clear assessment of the capabilities of the organization prior to the transaction.