|  50% of all business mergers, acquisitions and succession processes fail.
An additional 25% never make the promised return on investment. In other words, 75% of all transitions aren't worth it. Imagine walking into your banker and saying, "I've got a proposal that I need some funding for ... its got a 75% chance of failure." You'd be laughed out of the room. Ok so I may be pushing things a little but those are the stats collected by a group of students doing some research in 5 universities across the world. One great example is that of Kraft Foods intention to build a "global powerhouse in snacks, confectionery and quick meals." as a reason to merge with Cadbury. The odds are stacked in favour of a failure ... why? Cadbury was founded on Quaker ethics and built on the philosophy of doing good for others. Kraft, in contrast, is a Wall Street driven company that sees the merger as a "logical next step in our transformation toward a high-growth, higher-margin company," as their CEO puts it. Just because these two companies are in the same industry category/sub category, doesn't mean the companies belong together. And the reason is simple: people. The numbers ... balance sheet, production, distribution ... may show that this a marriage made in heaven. What is the most important thing?
"It is people, it is people, it is people." (Maori proverb) 100% of the customers are people. 100% of the employees are people. Focusing on just a "market opportunity" and ignoring "the people" component demonstrates a total lack of understanding of what makes businesses run well...and more importantly, what makes two run well in tandem. SME's are no different Instigating, developing and implementing succession plans are no different than the Kraft/Cadbury scenario. Succession planning is like planning an arranged marriage. Yes the dowery may be an important factor to consider but in reality it's the human factors which need to be focused on firstly. Both partners need to bring to the table specific talents and capabilities that are important to a relationship, but at the end of the day, the people in that relationship have to love each other. They have to want to be together. They have to look at each other and believe this is right. Simply sweetening the dowry will not make the marriage any more successful. If you are planning a business succession to your child, other family members, your staff or an outsider and are leaving a financial stake behind then chances are you are going to loose. If you are taking over the reins of the family business, are part of a staff buy out, a business buyout then chances are things are not going to go as well as you think or plan. Why? That's it exactly ... it's the why? Why the business began, why the customers keep coming back, why the suppliers support the business, why the staff remain. The answer to why isn't found in the numbers ... balance sheet, production, distribution ... it's the business culture, the relationships, the connection that matters. The numbers obviously need to stack up but they come after a solid analysis of why the business exists. What I figure is the inevitable result of Kraft/Cadbury is that Kraft will win a war of attrition and will remove everyone that subscribes to the Cadbury culture until it is destroyed, replacing it with their own, then the merger will succeed. But will it have made the promised returns? Will it have achieved the original outcomes trumpeted? I wonder? Before you leap, remember the most important thing? It is people, it is people, it is people. | 
