Getting Value from the Deal

The insurance industry's consolidation is creating some impressive numbers: Since January, there have been more than 170 deals, with a cost of more than $60 billion. The numbers generated after mergers, however, are dismaying. A recent study by Booz Allen Hamilton concluded that 53% of US mergers that closed in 1997 and 1998 failed to meet senior executives' expectations. The record for mergers within the financial-services industry is even worse than for the economy overall - roughly 70% of these fail to meet expectations. Based on research and experiences with clients, winning mergers are based on four overarching principles, all of them driven by the chief executive officer, including: 1. Communicate a shared vision for value creation. 2. Seize defining moments to make explicit choices and tradeoffs. 3. Simultaneously execute multiple critical imperatives. 4. Employ a rigorous integration-planning process.