Has the idea of growth through M&A finally been proven to be fundamentally bust or can we start to differentiate between those that are likely to fail and those that might succeed? Are there indicators which you might look for to identify potential success?
I’ve been thinking about what might feature in those indicators….here’s my list:
- Personal track record of complex transformation (ideally in remedial situations) within the leadership and senior operational teamThe individuals responsible for the deal need to have done it before at an operational level…strategy does not count! Successful post acquisition integration is only about implementation.
- De-centralised, highly integrated corporate culture where the informal networks are strong and are supported by leadershipSuccessful implementation is about making lots of little decisions quickly, efficiently and getting most of them right. It therefore requires highly motivated individuals who enjoy and defend their autonomy vigorously, collaborate naturally across silos and build networks / relationships as a key part of their career progression.
- Creative, passionate, powerful communications at the core of every activity
Communications is recognised as the single most critical qualification for progress. The company delights in communication and continuously finds new and innovative ways of delivering and receiving messages. Leadership does not see the informal channel as some kind of threat to their authority but the glue which makes the business work.
- The disciplines of project management are widely understood, practiced, and applied where possible and project governance is established centrally
The majority of employees have worked on a project and understand the distinct nature of project based tasks. Whilst there are some dedicated resources for the project portfolio, the organisation can draw upon a large pool of other resources to work on the transaction.
The governance for non business-as-usual activities is strong, fit for purpose and receives an appropriate level of attention from the ‘C’ suite.
- The rationale (cost based synergies, ‘quick win’ revenue synergies and BAU performance at the target) for the deal includes a realistic and internally publicised return on investment within 24 months
To get to that number requires broad socialisation, validation (as part of due diligence) and ultimately commitment from those who will need to deliver. The time frame is long enough to be able to deliver and short enough for key stakeholders to sign up to and everyone to remember!
Think about rating your organisation out of 10 against the above…what do they tell you about the prospects of success?
- What’s the impact of corporate transformation on the individual?
- Bolt on or transformative? What offers more value or less risk in M&A
Categories: C suite leadership, Governance, Mergers & acquisitions, post acquisition integration, Post merger integration, Project Management, Strategy
Tags: communications, culture, Decision making, Merger integration, Mergers and acquisitions, Performance, Return on investment
Great post! Reminds me of a close family friend who’s a high ranked officer, he always used to say “everything you really need to know about military strategy is written by Sun Tzu. How you execute your strategies is what separate the wheat from the chaff”.
It would be interesting to hear your opinion on BCG’s simplistic management displayed in six simple rules.
Hi Joakim, thanks for your comments….let me get back to you with a considered response next week. All the best, Ben
Lots of great things in the six rules…I like the idea of decentralising and matching that initiative with funding. The challenge as ever is in the implementation. Elsewhere I’ve written about global functions as being the ultimate example of centralising roles to a point where they lose all context, capability to make change happen and influence those around them. The alternative is clearly the more attractive!