More than half of global mergers fail to achieve their expected results, largely because of inadequate integration, a new Booz-Allen & Hamilton Inc. study revealed.

"Although senior executives devote exhaustive hours to striking the right deal, it is merely the beginning of the long and tortuous merger integration process" said the July 30 report, "Merger Integration: Delivering on the Promise."

Booz-Allen, based in McLean, Va., examined 78 deals worth more than $1 billion each between 1997-98. The report found that 53 percent of the deals failed to deliver their expected results.

The study found that 68 percent of mergers fail not because of flaws in strategy, but because of poor or clumsy integration. Loss of key staff, poor due diligence and delays in communications were named as factors.

By comparison, only 32 percent of the failures were attributed to faulty vision or poor fit.

The report recommended four key principles for successful merger integration: communicate a shared vision, seize defining moments to make explicit choices, simultaneously execute against competing critical imperatives and employ a rigorous integration planning process.

The organizational vision must be fully shared between the two merging parties and is "a notion frequently embraced in public statements, but all too often disregarded in practice," the report said. "Both companies' senior teams needs to understand and support the vision of what the merged company is trying to accomplish."

The report also recommended establishing the correct team structure and then populating these teams with the right people. Often this involves establishing multidisciplinary transaction teams that are outside the permanent organizational structure, which allows line managers to concentrate on deliverables and permits the teams a "freedom to review even the sacred cows of the organization."

The article is available online at Booz-Allen's Web site: www.bah.com/welcome_pages/0701/index.html?top.left=/welcome_pages/0701/merger_integration.html