The Synergy Solution: How Companies Win the Mergers and Acquisitions Game

I am using this book as the foundation for my masters.It offers evidence based thoughts on the considerations and actions needed for successful M&As. and practical solutions in carrying out those actions, such as what to measure relative performance with competitors.An excellent deep consideration of the subject

The media could not be loaded. HBR Press has a reputation for being super straightforward and bringing big nebulous ideas down to earth so “the rest of us“ can understand them. The problem with this is it invites criticism that their material is not actionable/detailed enough.This book (kind of) solves for that by taking a contrarian view on almost every part of the strategic dealmaking process. For example: A full 25% of the first part of the book is devoted to the importance of the investment thesis and the role of inorganic growth in an acquisitive corporation. This is somewhat obvious, but still necessary to reiterate, even at great lengths.

In his annual letter to Berkshire Hathaway's shareholders in 1989, Warren Buffett suggested that "it's far better to buy a wonderful company at a fair price than a fair company at a wonderful price." Mark Sirower and Jeffery Weirens agree. As they explain in The Synergy Solution, most acquisitions either fail or fall short of expectations. Reasons vary, of course, but one factor is universal: positive synergies compound success whereas negative synergies compound failure.Sirower and Weirens make excellent use of several reader-friendly devices that include checklists, bullet points, initiative sequences, Figures, Tables, and mathematical formulae as well as eight mini-commentaries (e.g. "How to Get All the Answers: Primary Research," Pages 65-67), six mini-case studies (e.g. "Amazon: Creating Pathways for Acquisitions," Pages 31-35) and a "Conclusion" at the end of each chapter. There are also three appendices: "Shareholder Returns from M&A," "M&M 1961 and the Origins of Economic Value Added," and "Economic Value Added Model Development."In this book, Sirower and Weirens provide the information, insights, and guidance you and your colleagues need to ensure that an M&A will sustain -- hopefully increase -- shareholder value. More specifically, they explain HOW to "raise and address issues, help you do the right deals, and bring your vision to reality. By working through the book, and taking the cascade seriously, you will be both informed and prepared -- and able to fulfill the promise of M&A."But getting M&A right is not just a project. It's a state change, a transformation that will affect how you approach acquisitions going forward, improving your chances of getting them right. M&A can and should produce enduring value -- for the acquirer and its stakeholders, and also for the economy as a whole."* * *Here are two suggestions while you are reading The Synergy Solution: First, highlight key passages. Also, perhaps in a lined notebook kept near-at- hand, record your comments, questions, action steps (preferably with deadlines), page references, and lessons you have learned as well as your responses to head notes and key points posed within the narrative. Also record your responses to specific or major issues or questions addressed or suggested in the material, especially comments at the conclusion of chapters.These two simple tactics — highlighting and documenting — will facilitate, indeed expedite frequent reviews of key material later.

Read just one line in this new book on mergers and acquisitions—and you’re hooked: “In most organizations, PMI is not a core skill.”PMI (post-merger integration) torpedoes many, many mergers.But let me back up a bit. A recent “Wall Street Journal “article trumpeted a radical idea for churches—perhaps smaller churches should merge with larger churches. “A Thriving Church Can Save a Faltering One,” by Ron McCoy, suggests that “a congregation merger might sound radical, but the evidence shows it can work.”While there have been successful church mergers over the decades, not every merger works. (The egos and the logos are formidable obstacles.) While I have sometimes suggested mergers to clients (both churches and nonprofit organizations), I’ve actually seen few takers. Now I understand why. I had never read a serious book about the art and science of mergers and acquisitions…until now.“The Synergy Solution: How Companies Win the Mergers and Acquisitions Game,” by Mark Sirower and Jeff Weirens—while written for the marketplace—has practical wisdom for both nonprofits and for-profits.The authors warn leaders about the “synergy trap” in proposed mergers and what to do about it. “Our hypothesis is that these systemic failures are the result of a lack of:• Preparation• Methodology, and• Strategy.”After the helpful introduction, I couldn’t resist reading Chapter 9 next, “Can the Board Avoid the Synergy Trap?” Here they deliver “Tools for the Board” and caution enthusiastic board members to exercise their “primary fiduciary duties of loyalty and care in fulfilling their responsibilities.” The authors urge board members who are considering M&A opportunities, to ask the right questions and have the right discussions “…given that so many bad deals make it out of the boardroom.”Wow. There is SO much in this robust book. In reminding board members of the common pitfalls of mergers, they note, “As we discussed at length in chapters 6, 7, and 8, a post-merger integration (PMI) is a highly complex process. The pace, importance, and sheer number of decisions that will need to be made for a merger far outstrip the normal rate of decision-making. Combining two organizations with distinct cultures while trying to manage business as usual and protect the day-to-day cash flow is daunting.” And they add this kicker:“In most organizations, PMI is not a core skill.”Whether you’re a board member of a for-profit or a nonprofit, if this short review doesn’t scare you off, then be sure every board member reads this book. The authors have just dramatically increased your chances of a successful merger. But more likely, they’ve helped you say NO to an unsuccessful merger. (Be sure to send them a thank you note!) And...thanks to the publisher for sending me a review copy.