“Princely” Insights in M&A Success

Business is often compared to war and statecraft, as reflected in  every-day  management jargon (e.g. competitive positioning, stick vs. carrot, war-gamming, etc). If business is war then merger and acquisition (M&A)  integration, also known as post merger integration (PMI), would be analogous to the capture and annexation of new principalities. In both scenarios, the acquirer must manage institutional complexity, cultural resistance and political machinations to  unlock economic value.

In his 16th century treatise on statecraft  “The Prince”, Niccolo Machiavelli offered at least 4 pragmatic take-aways for leaders  to achieve success in governing new principalities. These case based insights are ever relevant for senior executives today in executing M&A / PMI in the global market:

(1) Ensure the  leader  is “on the ground” and actively managing  rather than over-relying on delegating (“…when states are acquired … especially those differing in language, customs, … one of the greatest helps would be that he who has acquired them should go and reside there. Because, if one is on the spot, disorders are seen as they spring up … [and] the country is not pillaged by your officials …)

(2) Stay tuned-in and forge alliance across the various business units of the target organization, not just with the executive class (“The Romans … observed closely these measures; they maintained friendly relations with the minor powers … for when the evils that arise have been forseen, they can be quickly redressed”)

(3) Manage and contain powerful stakeholders with different interests and agendas (“…and as if it were not enough to have aggrandized the Church, he wishing to have Naples, divides it with the King of Spain … thus King Louis (of France) lost Lombardy …”)

(4) Recognize that all else being equal,  a strong top-down directive led organization (e.g. Apple)  is easier to acquire and integrate than a bottoms-up decentralized organization (e.g.  partnership based law firm). (“…no one will marvel at the ease with which Alexander held the empire of Asia, or the difficulties which others have had to keep an acquisition, such as Pyrrhus … this is not occasioned by the ability of the conquerer, but by the want of uniformity in the subject state”)

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