Maximizing the chances of

post-transaction success

Mergers & Acquisitions
Mergers & Acquisitions

Mergers & Acquisitions

How can you ensure corporate transactions deliver their full value?

There are many reasons why organizations choose to go through a corporate transaction or similar transformation process. For example, they may be seeking to:

  • Drive innovative new products and services
  • Reach new markets for growth
  • Create a new or enhanced customer experience
  • Improve cost position and efficiency through scale
  • Deliver growth through a combined key account strategy

But while such transformations can offer substantial business benefits, the unfortunate reality is that they rarely do, with a remarkable 70 to 90 per cent of corporate transactions and mergers and acquisitions failing to deliver their full value.

Why do corporate transactions so often fail?

One of the key reasons for the failure of corporate transactions is what we call “the deal paradox”: that is, the fact that deal-makers assign value to tangible and intangible assets in inverse proportion to how significant they are in creating value for the business.

In most cases, 90% of value pre-deal will be determined by tangible assets such as market share, EBITDA, CARG, pension contributions, and technology, while only 10% will be based on intangibles such as organization structure, culture, brand loyalty and leadership. Post-deal, however, the success of the transaction will be 90% dependent on the activation of intangible assets and only 10% on the activation of tangible ones.

Other key factors that can hinder success post-deal include:

  • Culture clash.
  • Inability of employees to collaborate.
  • Leaders who do not provide effective leadership.
  • Failure to retain the best talent.
  • Cost synergy that removes wrong roles or people.
  • People who are not motivated or enabled to do their work well.
  • Organization becomes internally focused rather than customer-focused.

Our solution

Maximizing the chances of post-transaction success

At Korn Ferry Hay Group, we help our clients maximize M&A and corporate transaction returns by securing integration and strategy alignment across three key areas: leadership; organization; and talent. We focus, in particular, on leveraging talent in order to drive value creation.

 

As part of this process, we work with our clients to address a number of key talent challenges. These include:

 

  • Has the transaction been valued correctly and has HR due diligence been performed?
  • Which executive compensation practices will maximize shareholder value?
  • What is the best way to identify the top team?
  • How engaged and aligned are the organization’s leaders and employees?
  • What is the blueprint for the new organization’s culture and operating model, and how will this deliver on the business vision and strategy?
  • Do the transaction and transformation process and work streams align with the blueprint?
  • Are the decisions that are being made today accelerating the execution of the vision and strategy?

To ensure the process goes as smoothly as possible, we set up a Talent Alignment Office for each client, from where we are able to deliver world-class project management and synergy tracking expertise.

 

What does a successful corporate transaction look like?

By helping to secure successful integration and strategy alignment, our corporate transaction experts deliver positive outcomes in a number of key areas. They typically include:

 

  • Revenue synergies – accelerating performance of core businesses and delivering on the incremental revenue assumed in the valuation model.
  • Cost synergies – ensuring the integrated company achieves savings assumed in the valuation model by designing an effective operating model and rewards structure.
  • Leadership – enabling higher performance from the leadership team and faster decision making across the enterprise.
  • Talent acquisition – enhancing the organization’s employer brand and reducing the number of open roles and time to fill.
  • Engagement and retention – reducing involuntary turnover by ensuring employees clearly understand how they contribute and are well rewarded for doing so.
  • Customer experience – improving levels significantly by creating an effective operating excellence model and highly motivated workforce.

Why choose Korn Ferry Hay Group?

With nearly 50 years’ experience of delivering world-class services across the talent lifecycle, we have a unique perspective on organization design and a deep understanding of how to maximize individual and organizational performance. Our proven methodologies and proprietary best-in-class analytics, combined with our unique approach, mean we are perfectly placed to help our clients accelerate and sustain organizational success.

 

Another important advantage we offer is that we are able to draw on a wide range of financial and HR expertise and that we provide dedicated services across all elements of corporate transactions and transformation. These include:

 

Leadership

 

  • Executive Pay and Governance
  • Top Team Performance
  • Enterprise Leadership Optimization

Organization

 

  • Organization Effectiveness - Organization Design and Structure, Culture Alignment and Change Management and HR Effectiveness and Policy
  • Talent Optimization - Strategic Workforce Planning and Assessment, Selection, and Acquisition

Talent

 

  • Total Rewards - Rewards Strategy, Job Evaluation, Grading, Salary Structure, and Titles and Health/Welfare, Pensions/Retirement, and Compliance
  • Employee Value Proposition - Branding and Employee Engagement and Career Framework Development, Learning and Development, and Performance Management

Get in touch

Questions? Call 800-633-4410 to speak to a Korn Ferry representative or complete the form below.

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Call 800-633-4410 to speak to a Korn Ferry representative.