Integration: Mergers succeed or fail on the success of the people and culture integration. According to the HBR, over 65% of post-merger companies perform financially below their industry’s average, and 50% actually erode shareholder value. Another survey finds that while two thirds have very well defined acquisition identification and evaluation process, three quarters of acquiring firms have no systemic process for integrating an acquisition.

While the acquisition or merger looks good financially, companies often fail to recognize the human actions necessary to bring two separate organizations into one common culture.

The people who focus on the acquisition are skilled in strategy, the industry and in finance. They have a very clear picture of the desired objectives of the acquisition, and understand how the new organization should eliminate redundancy and create ROI. But given the time demands of the pre-purchase tasks, and the pressures to focus on financial and business issues, the "people" issues often receive short shrift.

The people most affected by the acquisition, the employees of the acquired organization, have no real influence over the events, wonder immediately how they will be affected personally, do not know the business plan, and are often afraid, angry, and defensive.

Not surprisingly, the focus and priorities of the two groups are starkly divergent. This is the main reason why more than 70 percent of business combinations fail to meet the expected ROI: they do not pay sufficient attention to the messy, detailed, human issues. How to Do It Right In the minority of cases when mergers and acquisitions do work, it was because companies spent significant time and effort addressing the "people" issues, including