Put Dollar Signs on Your M&A Decisions

A merger is based on a financial proposition, a commercial viewpoint . . . it’s not a “feel good” activity. Success is measured in numbers—dollars and cents, cash flow, net worth, stock price, marketshare, P/E ratio, debt figures, tax savings, and so on. It’s a very digital issue. Your job is to help play the financial angles, to help deliver a bottom line characterized by black ink and big numbers.

Particularly during the early stages of a merger it’s important to produce quick financial successes. That speaks volumes to the workforce, because for a lot of those people the jury will still be out regarding whether it’s a good merger or a bad one. If the company’s financial condition begins to deteriorate, employees typically point to that as hard evidence that something about the merger was bad to begin with or is beginning to go sour.

So when you’re weighing the alternatives in reaching your decisions, always take the financial angle into consideration. Almost always there are real dollars involved, even though that reality may not be particularly obvious.

It’s very easy for companies to spend money on programs, benefits, or organizational changes that don’t provide the appropriate payback ...