Beyond Strategy: How Boards Can Accelerate ROI of a Deal
An old comic strip in my office shows the character Ziggy in a car facing two billboards: “Highway of Life” and “ Expect Delays.” This sentiment seems to apply to Sanofi-Aventis’s prolonged merger negotiations with Genzyme.
According to published reports, the apparent source of the delay has been agreement upon price, given the manufacturing problems at Genzyme. However, a bigger question the board must assess is whether senior management can address these issues within a timeframe that provides the expected return on investment.
This situation is not unique. As opportunities for “bargain” deals resulting from performance problems become more plentiful in our rapidly changing business environment, it’s critical for boards to go beyond questioning the logic and price of the deal and also assess the potential impact of cultural issues that can make or break success.
Here are questions to ask senior management:
- What are the business culture strengths and obstacles that will impact integration (e.g., speed of decision making, communication flow, etc.)?
- What plans exist to deal with the natural organizational anxiety and resistance that comes with mergers?
- What is the plan for communicating with stakeholder groups to gain their support before and during integration?
Asking these and other questions regarding culture, combined with questions regarding strategic fit, will enable your board to not only accelerate ROI in the short term but in the long term as well.
Pamela S. Harper
Pamela S. Harper is founding partner and CEO of Business Advancement Inc (BAI). and author of the book Preventing Strategic Gridlock (Cameo Publications). She is on the boards of two nonprofit organizations. Since 1991, BAI has collaborated with senior executives and boards to develop strategy, increase leadership effectiveness, and improve organizational engagement and capability for maximum innovation, growth and profitability.