Chairman's Message, February 2016
By Jim Jeffries, Chairman, M&A Leadership Council
Earlier this month it was announced that record numbers of people are applying to become NASA astronauts in hopes of being on the first team to begin the colonization of Mars. Seriously! A record-breaking 18,300 applications for just 14 positions means an applicant has a less than .08% chance of making the team. Now get this – the selected astronauts won’t be ready for specific training assignments until 2020 and it may be beyond 2030 before the first attempt to land on Mars. But the vision has been set and the planning has begun.
Now, I don’t want to be a contributor to the many analogies we hear within M&A regarding the complexities of M&A and those of other professions. However, I do feel obligated to underscore this truth: the people to whom we assign M&A responsibilities must be educated and experienced before we hand over the keys to an acquisition. At M&A Leadership Council events, we continuously survey the attendees (more than 1000 to date) and I remain amazed at the lack of training and preparation most companies provide their executives before embarking on mergers and acquisitions.
Think about it. You are about to pay a 30% premium to buy a competitor with similar or better products, more locations (some international), multiple and different IT platforms and thousands of employees who may despise your organization….. and the seller wants to close in 30 days. No worries, after all “it’s not Rocket Science”. But in a way it is.
- You need a vision
- You need a strategy from concept to value creation
- You need to explore as to whether the mission is even doable
- You need to organize
- You need to find the right people with experience and who are educated within the various disciplines
- You need to Plan, Plan, Plan – down to the finest detail
- And just as important, you need the skills to make triage-like decisions during the mission
- Oh, and the mission can’t take forever. You will typically run out of fuel (organizational patience and momentum) within 6 to 12 months
Yes, M&A is much like a exploring the universe. It can be very exciting, challenging and extremely rewarding, but proper preparation and training will be mission-critical to success.
Until next month,
