Last year, companies engaged in £1.9 trillion worth of mergers and acquisitions. Most of them - perhaps two-thirds - will destroy or fail to create value, provoking an exodus of customers and employees and ruining the very things that prompted the companies to buy. Like much in management, just because mergers are obvious and common doesn't mean they're easy. On the contrary, they are fraught with difficulty - which is why success is rare.
However, merger mediocrity is not preordained. Of the successful ones, a disproportionate number are performed by a few serial acquirers that seem to be immune to the failure rate applying to others. Cisco, for example, consistently swallows eight or 10 substantial companies a year. But perhaps the champion buyer is GE, which in its 2006 annual report identified £8.5bn of industrial acquisitions for 2007 - a not unusual amount for the £65bn giant.
How and why do GE's mergers (the abortive Honeywell bid that ended Jack Welch's career always excepted) succeed? Perhaps surprisingly for such a driven company, there's no standard formula, according to Roman Oryschuk, president and chief executive of GE Capital Solutions' equipment financing arm. Equipment financing, with £5bn in assets and 1,500 employees, currently has six active integrations on the go around the world, each posing distinctive challenges.
As always with GE, there is a plan, with numbers, and leaders in both the acquired company and the business unit who help push integration forward even before the deal is closed. But much, says Oryschuk, is about 'judgment and thought', and if deviating from the plan will benefit the end result, then so be it.
This is because, for GE, deals are explicitly a means, not an end. The end is long-term organic growth. Although the group is constantly on the watch for deals, only those that add something in terms of strategy, products, geographic spread or talent get through the filter. It follows that, in any merger, retaining acquired customers is paramount - and that also means looking after the people who have won the customers in the first place. 'Customers do business with people; they're the bond,' says Oryschuk.
Also unexpected is that, despite GE's famously tough and focused ways, the aim is not to homogenise the companies it takes over. It is true that, early on, the managers acquired in the takeover are exposed to GE's non-negotiable group compliance and HR processes, as well as its legendary financials. But 'we buy companies because they have something we don't,' insists Oryschuk. 'A successful acquisition is when both sides adjust and learn.'
Ukrainian by birth, Canadian by upbringing, and once an 'acquired manager' himself, Oryschuk is well placed to know that blending two strong cultures is a matter of sensitivity and balance, not corporate steamrollering. Listening is as important as talking, he says. 'You mustn't overwhelm people: too fast is as bad as too slow.'
In some cases - as with the acquisition of the UK's Amersham International in healthcare - it is the acquired company that absorbs the GE entity, rather than the other way around. In these 'reverse integrations', as the more experienced buyer, GE has the additional challenge of 'training the integrators to integrate us'.
Part of the adjustment process is reframing growth expectations. GE always wants to be number one or two in its markets, and by quickly drawing acquisitions into the group's annual 'growth playbook' - a vision of where the business should be going and how to get there - managers gain practical understanding of the new opportunities that being part of one of the best-managed large firms in the world gives them.
All this leads to some unexpected conclusions. Listening, balance, judgment, sensitivity, reflection, empowerment: these would probably not be the first words you might associate with a tough cookie like GE. Indeed, in the age of private equity, where the answer to all problems is reduced to finance, they are pretty unfashionable management concepts generally.
Yet it's a powerful reminder of some of management's home truths. To the disappointment of those seeking short-cuts to successful dealmaking, the conclusions to be drawn from GE are - there are no conclusions. Successful deal-making is indivisible from good management, full stop. You can't replicate GE's process for accomplishing mergers any more than you can replicate Toyota's production system, because you aren't GE or Toyota. If you know what the deal is for and what success is, and conduct it with the same respect, values and principles that you bring to all the other things you successfully do, you'll do successful mergers. To paraphrase and reverse Tolstoy: unsuccessful companies are all alike. Every successful company is successful in its own way.