How To Succeed In Joint Ventures

Several companies are either under negotiations or in the process of going through a merger and acquisition (M&A) transaction right at this very moment. Sad to say, the odds are stacked against the two or more companies being merged.

Yet, disappointments due to failure in meeting the management's strategic and financial expectations by all accounts continue to turn out, and people ask why. In the past few years, corporations of all sizes have steadily enhanced their approach to planning these acquisitions. Scores of books, articles, conferences and seminars are aplenty, and all these provide enough guidance and best practices to make mergers work; theoretically, the more recent alliances should have learned from these sources. Likewise, many leading conglomerates even shared much of their findings and experiences with the global business community because they claim to have systematized the planning and implementation of post-merger integration (PMI) and have thoroughly documented the actual process as well.

In spite of everything, large-scale mishaps abound even with the supposedly growing base of proven and time-tested auspices regarding the dos and don'ts of M&A planning. Again, why do mergers still fail to augment the shareholder value? It is plainly because the PMI process almost always lacks serious backing from and leadership by CEOs and the senior executives.

Numerous corporate executives basically fail to realize what's demanded of them from a point of view of M&A and merger integration leadership. Hence, it can be said that poor headship is the major contributor to unsuccessful corporate joint ventures.

There are five major critical success factors that C-level execs must accomplish to show their companies the way to M&A success. First is to rapidly institute the ensuing company's vision, mission, culture and values. Secondly, leaders should foster and ensure the correct sharing and dissemination of information. Third, they should be the consummate communicator. Fourth, they ought to lead the other leaders. And lastly, the leaders should proactively forge and personally uphold the culture.

To wrap this up, the colossal challenges of M&A are well known and well-documented. The specific rules, responsibilities and skills of the corporate leader should be documented and the managers should manifest these behaviors. It is quite obvious that every corporate combination is different, so each one poses unique leadership challenges. The aforementioned five leadership roles in the merger are the ones most central to achieving success in M&A.

At certain points in time, the integrated milieu is seen as a turbulence. To steer clear from uneven waters and attain its strategic destination, it's the job of the senior executives to be the leadership beacons.