When to Exit a Failed Merger or Partnership

How long is enough before you press the button to exit on a failed strategic partnership, alliance, merger or acquisition? The best answer is “as soon as possible”. However, most executives wait until the pain of trying to make it work is just too much to bear.   That is always too late and the results can be disastrous.

Failed partnerships and alliances typically take 18 months to reach this point. Failed mergers and acquisitions, where more money and namesake has been poured into the relationship, typically take 3 years or more. That is 1 1/2 to 3 years that a company has been distracted from competing effectively in the marketplace or an organization has been distracted from accomplishing the mission it exists to fulfill. The results can be disastrous and show up as lost market share, lower profits, or reduced impact on mission.

The reason it takes executives too long to make the decision is that it most often is an emotional decision rather than a data drive decision. Most companies don’t have a structure by which to monitor and manage the drivers of success of any given relationship they have entered into.  They see only the trailing results.  What is needed is a system that provides the timely information needed to know as early as possible when the relationship is likely to fail.  At that time adjustments can be made and, if unsuccessful, the relationship can be exited.

The techniques and tools of the Six Strand Weave provide absolutely accurate predictions of the future probability of success of any organizational relationship long before the results show up financially or empirically. This ensures that a company can make adjustments or exit that relationship if the probability of success falls below an acceptable threshold. That threshold varies and could be 10%, 25%, 50%, even 75% probability for success. It depends on the risk tolerance of a company.

The sooner a company can face the brutal fact that the relationship won’t achieve its goals, resources and focus can be turned towards other efforts or relationships that do advance the company forward.  Timely data driven decisions are possible when you can measure six key areas.

For more information on the tools and techniques of The Six Strand Weave check out www.loomllc.com or you can purchase, The Six Strand Weave, on Amazon