It is hard to imagine two organisational activities that result in more high profile, costly failures and reputational damage than corporate acquisitions and senior level recruitment (although culture change probably comes close). Situations where high hopes and strong rationale underpinning an acquisition or senior level hire can quickly give way to the realisation that a big mistake has been made are all too common. At first glance they may not seem to be too similar; yet both activities share some of the same fundamental problems and issues. Given that failure in these activities is hugely damaging to businesses, isn’t it time businesses changed their approach to hiring and acquiring?
Let’s start with the obvious; both senior level recruitment and acquisitions are notoriously hard to get right, failure rates for recruitment are estimated to run at around 40%, whilst anything between 50% and 90% of M&A transactions fail to deliver on planned outcomes. Interestingly, these high failure rates seem to be consistent over time and despite new understanding and advances in knowledge of organisational behaviour there has been little change or innovation in the way businesses approach these activities.