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M&A: Still A Viable Growth Strategy?

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Mergers and acquisitions have long been an important tool for organizations looking to stay ahead of the competition. But much like large-scale change initiatives, most M&A deals end in failure — 70 percent of the time, to be exact. For this month’s Financial Executive magazine cover story, my colleague Randy Ottinger analyzes this “curious” phenomenon and finds that, as a result of such dismal success, growing numbers of businesses are instead looking inward:

Many business leaders are shifting their focus more on organic growth strategies — creating efficiencies, integrating business units, consolidating departments — and less on mergers and acquisitions. In today’s rapidly changing world, however, executives ignore mergers, acquisitions and other innovative partnership strategies at their peril, removing sharp arrows from their strategic organizational quivers. Instead, companies and their financial leaders should not forego acquisitions, but should forego handling them so poorly.

I completely agree. And I think Randy’s advice on how to make those mergers and acquisitions more successful is spot on. To find out what he suggests, read the rest of his article in Financial Executive.

Randy Ottinger is an Executive Vice President at Kotter International, a firm that helps leaders accelerate strategy implementation in their organizations. John Kotter is the chief innovation officer at Kotter International, and is the Konosuke Matsushita Professor of Leadership, Emeritus, at Harvard Business School.

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For more about how organizations can develop the agility required to succeed in today’s rapidly changing world, read Dr. Kotter's new article, Accelerate!” available from the Harvard Business Review.

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