You’re lucky if you’re able to throw around the phrase, “if it ain’t broke, don’t fix it.” That means you’ve either escaped malfunction or are in a position where malfunction doesn’t impact you. Most people aren’t that lucky.
There’s also a chance that you’re simply unaware of the ways in which your process is lacking. “Fish don’t see water,” after all.
Unfortunately, there are too many fish swimming around the pond that is mergers and acquisitions (M&A), and these fish definitely don’t see water when it comes to the ways in which deals are internally managed and conducted.
Since I entered the industry over a decade ago, M&A deals have been conducted using various disconnected tools such as Excel, virtual data rooms and email. There was a time that this method was the tried-and-true industry standard. However, as markets grow and advancements in technology present endless opportunities for improvement, industry veterans must admit that traditional approaches to M&A need serious revision.
During due diligence, important deal documents are requested in batches through Excel and are later moved into virtual data rooms for potential buyers to view. Additional information is then requested through long email chains or Excel.
From my experience, this complex and convoluted process isn’t only time-consuming, but it also creates an opportunity for miscommunication, version-control issues and breaches in important deal security.
Similarly, post-close integration is conducted using the same set of tools. Typically, integration teams develop playbooks, which are created using Excel and then distributed across functions for the execution of tasks and goal management.
Because Excel does not allow for real-time, centralized engagement, integration teams will often work these playbooks in their respective functions. This siloed process keeps functional leaders from working together to identify possible roadblocks and execute shared goals in order to maximize deal value and uncover synergies.
Despite these inefficiencies, deals still close every day, innovating markets and generating millions of dollars in revenue. This allows for leading industry professionals to rely on the well-worn trope, “if it ain’t broke, don’t fix it.”
However, I respectfully disagree. As market pressures increase, transaction values skyrocket and industry competition continues to grow, I believe practitioners must be open to innovative change.
Technology and methods are continuously evolving in other industries. Innovations such as artificial intelligence, secure chat tools, customer relationship management platforms, and new project management techniques like Agile have already transformed many diverse industries for the better.
Meanwhile, the M&A industry is still holding on to the tools and process management styles of the 1990s. The industry must evolve, as the current technique will not flow seamlessly into the modern market’s turbulent nature.
However, practitioners must first admit that the prevailing approach is hindering deal outcomes and requires a much-needed review.
In order to improve their processes, organizations must look critically at how they internally conduct deals. Are their teams executing transactions in the best way possible? What systems in place are slowing them down and where is there room for growth?
This audit should be conducted by running through each important deal process, on all levels, for any areas that are unnecessarily convoluted.
In addition to audits, practitioners should also conduct deal retrospectives in order to gain feedback from team members on processes and tools that need improvement.
Deal retrospectives are meetings that take place after a deal closes with all team members present to discuss successes as well as challenges or failures. Many M&A teams already have such a process. However, allowing the conversation to also include which internal tools and operation frameworks need revision is necessary for innovative change.
Allowing those most connected to the deal the ability to suggest advancements will shed light on lingering inefficiencies as well as possible solutions.
Conducting audits and retrospectives will help establish the necessary culture of continuous improvement and innovation. Empowering innovation and the improvement of novel systems will lead to better outcomes and a more competitive organization.
This culture will follow any company for years to come, and as business landscapes continue to evolve, your workforce will be ready and willing to change in its stride.
Inefficient and disorganized processes must be replaced in a thoughtful and thorough manner. Which solution will best fit the nature of your organization and deal team? There are many project management methods and software solutions that can greatly improve workflow, but not all will fit your organization’s structure.
When seeking to establish a new tool, I believe it is best to develop a team of cross-functional practitioners to search, demo and select the solution. Once a software is selected, thoughtfully consider training and implementation for best outcomes.
In seeking improved project management approaches, employing the help of experts can be beneficial. From my experience, however, simply looking at the methods of other organizations that have already improved their workflow process can also be extremely helpful and a source of inspiration and knowledge.
M&A, by design, is an incredibly conservative industry that must remain compliant to strict regulations. However, this does not mean industry leaders should ignore progress. I believe a simple open-mindedness to modern process improvements will go a long way.
M&A deals are complex, rapid and hold tremendous ramifications for the global market. Regardless of this ceaseless environment, the industry has accomplished so much. Imagine the growth that would occur if M&A practitioners had an open mind to the innovations of technology and process.
This will not happen, however, unless industry leaders surrender the status quo and provide the effort necessary to improve, transform and launch the industry into the 21st century.