Article at a glance:
A failure to focus on revenue may explain why so many mergers don't succeed, for while they are in progress, many companies largely ignore it, expecting that it will just keep rolling in. In fact, most companies lose their revenue momentum while concentrating on cost synergies or failing to focus systematically on postmerger growth. Yet in the end, stalled growth hurts a company's market performance far more than a failure to cut costs.
The take-away
Revenue needs more attention in mergers. Companies that do them best don't rush headlong into attempts to find cost-reducing synergies. Rather, those companies first look after their existing customers and revenue, retain their revenue-generating talent, and tailor the integration to balance their revenue and cost initiatives.