Sex and Violence in Mergers
Just a cheap headline to get your attention. But stick with me and I’ll tell you a quick story.
I read that Justice Oliver Wendell Holmes once boarded a train in Washington, only to find out a while later that he’d lost his ticket. As luck would have it, though, the conductor recognized him and said, “Don’t worry about it, sir. I’m sure when you find it you’ll send it in.” Justice Holmes replied, “Young man, the question is not, “Where is my ticket?” but, “Where am I supposed to be going?”
That, Tonto, is a question lots of leaders are wrestling with these days.
Let me share some statistics from Jason Jennings’ new book, The Reinventors: How Extraordinary Companies Pursue Radical Continuous Change.
- 67% of global CEOs think their current business model is sustainable only for the next three years
- 31% believe their current business model will last only five years
- 98% suspect that their business models are ultimately unsustainable
Point is, merger integration has a whole new layer of complexity in today’s world. At the same time you’re trying to execute a successful combination, you may need a major shift in your business model and core strategy. Even your corporate culture.
As Robert Safian wrote in Fast Company (February, 2012), “Predicting what will happen next has gotten exponentially harder. Uncertainty has taken hold in boardrooms and cubicles, as executives and workers (employed and unemployed) struggle with core questions: Which competitive advantages have staying power? What skills matter most? How can you weigh risk and opportunity when the fundamentals of your business may change overnight?”
M&A is a sexy game. But it can do violence to shareholder value when there’s confusion over where you’re going.
How long before your business model quits working?