How do seemingly good deals go bad? Here are the ten reasons why:
- Paying too much. Some companies feel they have to overpay to block a competitive bid or to protect their turf. But when too much is paid, it can kill any chance to achieve a satisfactory return on investment.
- Lack of strategic clarity. Companies often acquire for the wrong or unclear reasons. For instance, organizations may catch deal fever. They get caught up in a buying frenzy because other companies are making acquisitions. As a result, they do not realistically analyze how a deal will create value.
- Slow decision-making can derail a deal. Problems that go unaddressed and grow will eventually hamper an organization's ability to compete.
- Lack of buy-in. We’ve all seen situations where the best-laid plans go astray. Integration plans aren’t worth the paper they’re written on if the people who are responsible for executing those plans don’t understand them or want to make them work.
- Culture clash. Even companies in the same industry, serving the same customer segments, and holding the same values can suffer from culture clash. Culture incompatibility is real and can cause a deal to fail just as surely as other more "tangible" reasons ...