Jan 2015 Chairman's Message: Missing Links in the M&A Value Chain

5 Critical Initiatives Missing from Many M&A Practices
by Jim Jeffries, Chairman, M&A Leadership Council

The M&A Leadership Council enters a new year having trained more than 700 executives in the Art of M&A.  In each class we hold, we tend to uncover the key initiatives still missing from the practices of the many companies who attend, and this year we will be broadening our course offerings to incorporate everything in the M&A value chain from strategy through integration.

In this issue I thought you might find it interesting to discuss some of the missing links in the M&A value chain:

  • Formal Orientation and Training – Even though most companies today have M&A as a critical growth component of their value proposition, the executives and resources have not received any formal training for the responsibility.  How can one do something as complex as integration, as an example, without being trained to do so?
  • Playbook/s – Any company which plans on doing a merger or multiple acquisitions should have a detailed, repeatable and well documented process for every phase of M&A.  It should incorporate best practices and be easily understood and articulated by the Strategy Office, DMO and IMO, as well as all team leaders.  Without playbooks, acquisitions can be ad hoc and have little chance of success.
  • Pre-Announce Executive Session – Unless the management team is fully aligned with agreed-upon roles and responsibilities for communications and launching the integration from announcement on, there is a good chance that value will begin eroding at the announcement.  What we have called the Game-Day Executive Summit is a 1- to 2-day critical best practice that every company should learn and utilize. 
  • Governance and Oversight – Most companies remain in the dark ages when it comes to transparency, tracking and communicating during the due diligence and integration phases.  Spreadsheets, teleconferences, meetings for updating are old practices.  Management needs to begin leveraging technologies available to get and stay on top of M&A performance. 
  • Operations Fit, Culture Fit and Business Model – Three big areas often left behind during due diligence.  Companies continue to be obsessed with the validation of historic numbers (financial due diligence), so that they pay little attention to three practice requirements that can be the difference between value creation and value destruction after the close. 

These and many other critical practices are introduced throughout the several courses offered by the Council today.  Take a moment to visit our website to review the various sessions offered.  You and your company owe it to yourselves to master The Art of M&A.

Hope to see you soon,