If you have a clear growth strategy that includes mergers, acquisitions, joint ventures or other similar business transactions, there is no reason to go into deals unprepared. It is critical to invest in M&A capability development well before deal-time to give yourself the best chance of meeting deal objectives.
M&A capability development is all about getting ready by improving both organization and individual capability. This includes shoring up “business as usual” infrastructure and supporting systems, as well as establishing deal infrastructure, systems, process and tools. Tapping deal knowledge and experience, including secure access to skilled internal and external resources, is critical.
If your team is bright, well-resourced and motivated, the basics for being effective in support of M&A transactions can be taught. This includes understanding deal fundamentals, as well as having a framework, language and tools in common with other deal team members (in anticipation of transactions). Also valuable is access to an experienced guide for navigating tricky bits along the way.
We find that most acquisitive organizations have some form of M&A processes, tools and documentation to avoid “reinventing the wheel” for every deal. Surprisingly, many still do not include people experience as a chapter in their playbook.
Also we find that few organizations have formal M&A Capability Development Programs and most employ “on the job training” to build capability. This can work well for executive teams and deal team members as long as key members are experienced across the spectrum of required skills. Unfortunately, more frequently than not, preparing line leaders and functional teams is left to chance.