But for companies that are on an expansion trajectory, a new book by Cincinnati's Michael Gendron, former senior vice president and chief financial officer of Batesville-based Hill-Rom Inc., offers insight into the right way and the wrong ways to grow.

The book may have a dull title - Integrating Newly Merged Organizations (Greenwood Publishing Group; $55) - but its premise, recommendations and conclusions offer plenty of insight for executives who want to merge divisions or expand by acquisition.

Adding to the worries of any company or executive considering growth is the staggering rate of failure of most acquisitions. It's not uncommon for two of three or even as many as three of four mergers to fail to deliver value.

Gendron estimates that he has worked on 30 to 40 mergers in his career and has seen his share of missteps.

"The most significant issues are culture and communications," he said. "It is quite surprising how much culture affects every transaction.

"And it's not just the culture of a company. There's culture of units, culture in different geographic locations, cultures that are inconsistent with other units that are being combined."

Gendron, a Mount Adams resident, broadly groups challenges for merging companies - and by extension merging divisions within the same company - into the following categories:

• Unbiased due diligence is the first line of defense for any prospective merger.

Existing employees cannot be trusted to investigate, assess and make recommendations, either. Egos and turf get in the way. Instead, a company should hire a team of experts to figure out whether the acquisition makes sense.

"Experienced due-diligence reviewers do this every day. They are folks who are experts and can understand the objectives, determine the culture of the target company and have the resources," Gendron says.

• If experts come back with a buy recommendation, then don't delay because time is an enemy with heavy artillery.

"If integration is not done quickly and effectively, there are hidden costs," Gendron says.

"The largest hidden cost is inefficiency in both organizations. Costs can rise by 50 percent in acquisitions that take two years instead of a year. And if integration only takes a year, that's still a year of distraction."

• Identify key staffers in the merging companies and keep them happy because retraining new workers is always costly.

"Again, experienced people involved in mergers can identify the real contributors to an organization regardless of their position," he says.

• Beware of frustration mounting among long-time customers. They may bail out to a competitor for little or even no reason at all.

"An acquiring company is putting the base business at risk," he said.

"If you don't have experts, the best people in your business will be focused on acquisition as well as managing their existing portfolio. That's a distraction that could give a market opportunity to the competition."

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