Building In-House Competencies for Acquisition Growth
By Jack Prouty, President of M&A Leadership Council
Eight years ago, Jim Jeffries and I started the M&A Leadership Council to give back by sharing our M&A expertise with the business community through our public M&A training programs and other avenues, such as the M&A Monthly. We thought initially the draw would be with midsize companies who had no experience in M&As. But what we have found is that it is the large, serial acquirers who make up much of our meeting attendees. The good just keep getting better! Companies like Stryker and Thompson Reuters have sent over a dozen people to our various public training companies. Cisco, considered one of the best with dedicated M&A integration resources, has not only sent staff to our training, but also brought us inside to work with them on a customized training program. In addition to over 2,500 program attendees, companies have brought us and our partners in to train a teams of critical staff members.
These companies get it. If you are going to grow through acquisitions, then you need to build in-house competencies. The frustration for Jim and I continues to be that too many companies still think M&A success can be achieved by treating them as “business as usual” with untrained, unqualified resources; limited investment in the planning and implementation; and lack of a strategic context, executive support, and rigorous program/change management.
The adage “if you always do the same thing, you will never get different results” still applies. I keep preaching the same message and just hope more people, especially senior executives, will hear it. Being M&A competent in today is just not “nice to have,” it is a business imperative. So what does that mean? it means you need to in-source, not outsource M&A. This consists of the following:
- Build the tools, structure, methodologies that are fundamental to effective M&A execution (and get the right resource to assist in this effort)
- Use both public and in-house training programs to develop a cadre of key functional leaders who understand the what, the when, the how, and the who of sourcing deals, leading a strategic diligence, and executing integration planning and implementation.
- Hire and develop qualified staff who really know how to operate across the M&A life-cycle.
Side note: I once had a client, the Integration Project Director of a $1 billion deal, have a career conversation with me about M&As. I asked how many were involved in this integration project. He said over 300. My next question: how many were involved at each stage, all levels and across all functions? He said, in addition to your team, only me. That’s the problem that companies have: too few have the necessary M&A experience. Again, this is why M&A Leadership Council offers our training programs, created the Certified M&A Specialist program, and partners with M&A consulting specialists like BDO, Willis Towers Watson and M&A Partners.
- Deploy a select few experienced M&A specialists from the outside to work in the trenches with your team. Their role, tightly managed by you, is to bring the tools, process and expertise to your team and operate as the trainers/advisors/facilitators, not the doers (that is the role of your people).
- Start off every effort with a strategic planning workshop with the key “business owner” and senior executives to set the strategy; outline the framework and process; and clarify key priorities and objectives.
- Invest in making the deal work rather than just in investing in doing the deal. This means adequately resourcing the planning and implementation effort.
To the Reader: Full disclosure, I am no longer in the business of selling and delivering a team of consultants to work with clients on integration projects. My role, like Jim’s, at this career stage is to share our knowledge and experiences with others. I only do 2 things: I develop and deliver training programs and I provide executive coaching, when requested. Our training programs are heavily subsidized by us and our partners; and our advice and recommendations (such as offered in this article) are free, but experience-based.