Why the method in M&A is madness


You sign the final documents to complete the acquisition and say goodbye to the bankers, accountants and lawyers who have guided you over the previous months.  You’ve read the articles saying most M&A deals aren’t successful, so you’ve put in place a project team to deal with the complexity of the task (as you already know all the top management consultants use an identical process to deliver a deal). Surely if an integration managed by this standard approach fails it’s a fair assumption that it failed because the methodology wasn’t adhered to rigorously enough.  All that is needed for success next time is increased control and planning…right?

Einstein’s definition of insanity is “doing the same thing over and
over and expecting different results”.

Every management consultant firm and text book on delivering acquisitions has followed the same approach for the last 20 years. Yet we haven’t seen headlines or analysis showing that merger success rates have improved…it seems we continue to deliver the deal but not the value.   

How about looking at how others approach projects with a high degree of uncertainty and complexity?

In software development they also tried applying tighter controls and more complex process controls when they found the software projects were regularly running late and over budget. Complexity to meet complexity.  Yet software continued being delivered late and without the planned benefits.  A better way to deliver software was found by a group of 17 software developers meeting at a snowboarding resort in Utah… 

They said the way to deal with the complexity and uncertainty was to dismantle the heavyweight processes and management hierarchies.  

An anarchist manifesto to throw away the central controls and empower people to manage themselves?  It’s hard to believe that the resultant approach, “Agile”, is now respected as the best way to deliver value from complex software projects. 

The parallels between the state of software development when they wrote their manifesto and the state of M&A delivery today are considerable. Low success rates in delivering the planned benefits despite the recruitment of expensive consultants and increasingly detailed plans and controls.

At the heart of what appears to be an anarchic free-for-all in ‘Agile’ are robust engineering theories developed in the 60s and 70s for complex engineering control systems.  Applying the same theories to production management created the ‘lean manufacturing’ revolution of the 80’s and 90’s.  

Very simply you use short cycles of learning (visibility, inspection and adaption) to adapt quickly to the challenges thrown up by the complex system, what’s often called an “emergent strategy”. 


Making the leap to Agile is hard as, in the same way as lean manufacturing, it challenges many of the established truths about how a team should be managed. Traditionally a plan is established and any variation from the plan is seen as undesirable. Agile instead expects change and provides reports that track change and its impact on the project.  

Agile doesn’t fit everything in the deal process, but for many areas it’s madness to create detailed plans. Instead, consider adopting Agile practices wherever there is complexity and uncertainty, such as systems redesign, new product development, revenue synergies and employee engagement.

David BoydDavid Boyd