How do you start building your corporate development function from scratch? Where would you start when you are the very first person in your department? In this episode, we are going to be talking about evolving your corporate development function.
Joining this discussion is Michael Palumbo, Director of Corporate Development at Halo Branded Solutions. He was the first hire on the company’s corp dev team, even though he was an investment banker.
“If you don't have it organized where everybody can see what everybody is working on, people are just talking past each other, they’re not on the same page. It’s a horrible trap to get caught in, not having that inner communication.” - Michael Palumbo
In the earlier days, Halo did deals through their executives. They just relied on intuitions, they knew the targets, and they just got experts for the deal, like getting someone from accounting and operations. They just did it themselves. Before Michael even joined, they already had over 25 deals in the last decade. They wanted to get someone dedicated to this role and hired Michael as the corporate development lead.
When Michael joined the company, it was a blank canvas. No one knew how to manage corporate development, and no one could tell him what to do. Micheal didn’t know what to do either. He came from investment banking, so he was usually on the sell-side of the deal. Now that he switched to a corporate development role, he is on the buy-side, and everything changed.
So Michael did three things: Understand the business, meet the people, and learn the process. This is crucial for any corporate development role. You need to understand the products, your competitive advantage, how the back office and supply chain works, the whole nine yards.
“How are you going to buy a business, plug into your business, if you don’t even understand what your company is doing.”
You can’t add value to the business if you don’t understand their processes. The first thing you should do is identify what they are doing right to preserve that. Then you can start adding value or creating playbooks. It’s how you can establish your credibility.
One of the things that helped Michael’s process was the Agile methodology. The key point was to involve integration in the diligence process, to have that continuous flow of information between the two teams is crucial.
Now, knowing the best practices is one thing, but adapting it is another. People don't always welcome change. Michael said the biggest challenge in adapting change is the conviction. People are always going to ask, “why not do it the old way?” You often create extra work for somebody when trying to add value, so they will always try and push back. You have to have conviction in answering these questions. It doesn’t have to be complicated. You just have to deliver it with confidence. Always give people the “why.”
Using project management tools also helps a lot in your process. Bringing visibility to the entire team is essential, especially between diligence and integration teams. It is important that everybody sees who's working on what because it’s never “just a task” because every task is cross-functional.
The only way that the silo issue gets solved is by communicating. Calls and emails don’t get answered all the time, so you have to utilize communication tools.
If you want to be an effective corp dev leader, make sure you understand the business’s ins and outs. It will give you a better understanding of what the company needs to grow. Use the Agile methodology for more efficient deals, and utilize tools to improve team collaboration.