This statement is the key message in a crucial publication in HBR in June 2016, about the extremely expensive mistakes in M&A, which seem to be unstoppable! This has been going on for 40-50 years!
In 2015, a high-technological corporation in the Netherlands, Royal Imtech, with some 22,000 employees, active in infrastructure, building & construction, maintenance & control, ran into financial trouble. The main causes of this bankruptcy were the inflated egos of the former CEO and CFO, who had both held positions from 2002 till February 2013, acting like ‘sun-kings’, and a lack of monitoring and control.
Black swans are large-scale unpredictable and irregular events that have a massive consequence. Examples are a tsunami, huge storms like Sandy in 2012, 9/11, Madrid 2004, and the loss of MH17. Antifragility means randomness, uncertainty, dealing with the unknown, doing things without understanding them and doing them well. However, it is easier to find out if something is fragile.
‘Strategic’ is one of the most misused words in management today and is often used to mean ‘important’. However, strategic decisions are about decisions with consequences of future impact for the organization. Compare this with M&A activity. Numerous research studies during the past 25 years have confirmed that 85 percent of all mergers and acquisitions fail.