Business Transfers: the facts
- In the Netherlands business takeovers and mergers are common. In the area of the Benelux 85% of all business takeovers are in the Netherlands.
- Less than 10% of boards think that their takeover is a success.
- 54% of boards believe that focus on the non-financial parts of a business transfer leads to an increased likelihood of success.
- A large number of international and national studies show that the primary goals of the transfers and mergers are never achieved.
- There is a new movement in the psychological area of studies that can improve these numbers (http://www.humangivensnederland.nl/)
Buyer and seller: the dream and the reality
Business transfers are idealistic in every board member’s mind. A business transfer is seen as a huge opportunity, a master move, a miracle of synergy and a cost decrease. This move should be a guarantee of growth in business and profits. However the results may not be as expected, particularly with respect to expected synergy, growth and profit. Buyers and sellers may approach the takeover with different rational perspectives:
Examples of the rational arguments of the buyer are: this new company fits our growth strategy, with this company we can grow in scale and gain synergy.
Examples of the rational arguments of the seller are: we eventually found a strong partner, a good match and we can ensure the future of the company.
However there are also very important emotional arguments. The buyer wants to be the largest company in the field or become a well known, powerful company. The seller is concerned that unless he sees financial return after years of hard work the company will not have a future. Both the seller and the buyer have an emotional commitment to the business transfer that can also have an impact on the rational arguments. It is important to gain control over these emotional arguments so the business transfer can succeed.
Step 1: complete a profile of the personalities, motivations and ambitions of the involved board members and managers based on individual meetings and using the Insights Discovery Profile.
Step 2: comprises three sessions: one of them in the Dordogne in France with representatives of the management team who commit to organizational and individual goals.
Why are reorganizations always such a struggle? Why do mergers not result in the expected synergy? This is mainly because managers do not develop their personal leadership for new situations. In recent years confidence in the traditional structures and organizations has decreased. This trend was already in place before the economic crisis hit, but has subsequently accelerated. Traditional management models fail in the current age. Instead the call for new leadership styles is becoming stronger. Currently there are several management models available that can be applied to different situations. However real effective leadership depends on the context and person; every individual can explore what is needed and develop the required skills.
Inspiring by reflecting, serving and guiding, it all depends on the personal goals and the context. Gijs ten Kate analyses the dynamic where leadership is a change process and guides managers that are self-aware to achieve effective leadership in a turbulent environment.
Step 1: create a collective vision of the desired company culture in a work shop environment of discovery and creativity,
Step 2: share the implementation plan with the employees (including a key role for the middle to lower management) in a second work shop of implementation.
The uncomfortable truth is that every business transfer creates insecurity among employees. With every take over the physical assets are almost free because the real investment is in the experience, knowledge and ambition of the people. However, management and non-management alike may feel insecure and need to get a vision and structure. By including them in the development of the structure and strategy the engagement in the future of the new organisation will increase.