Mind the Gap!

Mind the Gap.

Have you ever been to London?

If you did you probably heard “Mind the gap. Mind the gap” when using the Underground.

Unfortunately I’m not in London, I’m just sitting at my home desk.

Reading a whitepaper on the risks for M&A. The results of a survey amongst 50 senior M&A executives.

Yes so far for the Underground let alone some nice retail therapy in London, huh?

I wish I could tell them “Mind the gap. Mind the gap.”

Research indicates 2/3 of M&A fail from a business perspective, meaning the deal gets closed but they don’t live up to their investment thesis in other words don't achieve their intended goal.

Most explanations for this depressing number emphasize problems with integrating the two parties involved. Regardless of the number (that might be open for discussion) it is clear that to achieve the desired economic goals of the new organization - and avoid a clash - the two cultures must harmonize.

In the Whitepaper of today however, less then 10 % of the executives perform a culture due diligence and less then 10 % consider the work force as a huge risk for M&A's in the upcoming 12 months.

I guess they must have missed the existing research, the data related to the Great Resignation and the lack of employee engagement.

Maybe they were in the Underground and just did not hear the voice “Mind the Gap”.

Do you Mind the Gap?

Let's Close the Gap.

Eve Vlemincx

References:

1. The numbers of the failure rate might differ depending on the research consulted. Factors mentioned are deal structure, cultural fit, strategic alignment and execution.
2. McKinsey & Company article: "The Real Reasons for M&A Failure" (2017)
3. Boston Consulting Group article: "Why Do Mergers Fail?" (2015)
4. PwC report: "Mergers, Acquisitions, and Capital Market Report" (2021)
5. Whitepaper M&A Risk in Review, AON (2022).