The Secret to Successful Mergers & Acquisitions

I’m often asked, “What is the key to a successful acquisition?” I have one simple answer: Have a process.

You can compare the mergers and acquisitions (M&A) process to the hiring process. Before we even begin interviewing candidates, we develop a job description, whom the employee will report to, when they will start, performance metrics, and how much and when they will get paid. After, we create a plan for finding candidates to interview and how we will convince them to join our organization. When the employee starts, we typically have an onboarding and training process to “integrate” the new employee with the company. Generally, we expect to see results from employees within 4-6 months, and if it doesn’t work out, we can let them go.

We have detailed HR manuals for hiring employees, from whom we expect immediate results, but can fire if it’s not a good fit. In contrast, “hiring” a company (executing an acquisition) costs millions, tens of millions or hundreds of millions of dollars, takes a long time to integrate and to realize success, and if the acquisition goes wrong, is very difficult to “fire” the company through a divestiture.

Using the foundation of HR is an excellent place to begin thinking about building your M&A roadmap. With so many moving pieces in an acquisition, having a clear plan before you begin pursuing M&A will keep you organized and increase your chances for success.

In my next post, I’ll outline the M&A process we’ve developed at Capstone: the Roadmap to AcquisitionsSM. Check back to see how to apply this process to your organization.   

A version of this post was originally published on Vistage Florida’s Speaker Spotlight.

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