Avoiding M&A Failure

Jonathan Chadwick, finance chief at software company VMware:
“The number-one reason I think deals fail is because there was not an agreement or a matching of cultures. The worst deals I’ve done is where we’ve had separate leadership and people were talking over each other.” 
. . . .
The key to integration is to ensure budgets are aligned, said Chadwick. “It sounds very tactical, but I have seen a number of deals where there wasn’t a handshake or a firm sign-off from the go-to-market or sales teams that ‘Yes, we are going to put an extra 50 people on this deal to make it successful.’ ” If that doesn’t happen, Chadwick said, for the sake of $5 million of operating spend the company may be putting at risk $400 million of capital expenditures associated with the acquisition. “As the CFO, you need to make sure there is a tight alignment of management teams and that budget is allocated,” Chadwick said. “Get people assigned to the value drivers, those integration points. So if there are five to 10 things driving synergy, I want a name against each one and I want to meet with them regularly.”

#Merger     #HumanResources   #Finance   #BusinessIntelligence  

Posted by +Dan Durrant 

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