How to Evolve Your M&A Workflow Using Agile Principles

These days, M&A practitioners tend to focus more on integration, even Corporate Development leaders. People are now realizing that all the value is being created and destroyed in the integration process.

This is why according to Gina Sandon, Director of Corporate Development, M&A Synergy and Implementation at IBM, their organization has moved away from using the word integration into a focus on implementation. They embrace what’s unique and special about the acquisition and create with them the greatest value creation possible. 

IBM has been on a journey moving from a hierarchical approach to things, checklist-driven, with lots of individual silos to a much more forward-thinking, business outcome-oriented, and agile organization. 

Agile Accelerate

At IBM, they call it the Acquisition Agile Accelerate. This is where they shifted their checklist driven implementations to something that was more flexible that enabled them to move quickly and innovate along the way.

The Agile Accelerate was focused on the deal enablement and transition to operate process, right after the formulation of strategy around the portfolios and strategic alignment. It’s all about establishing a deal rationale and developing the due diligence around that, but also understanding the post-close operating model. This allows team members to really focus on the high-level picture of the entire deal, unlike a traditional approach that is very rigid and checklist dependent.

Gina reflects back to her days on the sell-side with Initiate Systems in discussions to be acquired by IBM. 1600 due diligence questions landed on her desk with a request to populate the data room in a week.  Imagine the task at hand for the seller and the emotions it provoked to the disclosed employees about to be acquired. The Business Development and M&A teams set out to rethink and reinvent the approach.  One that is focused on value creation. It starts with 3 fundamental questions:  

  1. Should we do this deal and what do we need to know to do this deal?
  2. Can we do this deal? What are the barriers that are preventing us from getting this deal done?
  3. How would we do this deal? What are the things that we need to do to realize and accelerate value creation?

Adapting to change

Adapting to change is never about age, it’s all about the mindset. The individuals that have the most success are those that have a natural intellectual curiosity and growth mindset. People need to be open-minded in order to adapt to Agile practices, and yet, this is still a journey that happens at a rate and pace different for everyone.

New ways of working  - with a focus on outcomes, speed vs. elegance, and transparency and trust reinforces the culture.  However, it won’t be easy. Most people have been relying on what worked for them for over 15 years. The change will not happen instantly. 

Empathy is one of the most important traits that you need to have in dealing with people going through change. Patience doesn’t hurt either. Together these traits enable transformation.

Ultimate Advice

Aside from reading my book: Agile M&A, Gina’s ultimate advice to M&A practitioners is to never underestimate the power of a retrospective. Sometimes, we are so keen on doing the next project (or we are under time pressure) that we think we can skip it, but there is a lot to be learned in retrospectives. You need to keep documenting the lessons learned on every deal so you can drive iterative improvement in process and outcomes in your next project. 

Lastly, you need to develop a culture of transparency. We all work in a space that is highly confidential, so it is crucial to building trust and transparency in your core teams without compromising nondisclosure agreements. You need to manage the flow of information effectively inside your teams and enable them with data-driven insights across the end-to-end workflow.  Be purposeful about how you organize deal materials, status updates, project tracking, and make it visible and available across the team when and where possible. 

One of the most effective ways to do this is with modern collaboration platforms. That way, when someone new comes aboard an implementation team and needs to catch up, all the information they need is readily available in an organized and transparent way that they can go through it quickly. Relying on email trails and what’s in people’s heads or on hard drives is a relic of the past.  This speeds time to value creation, which is what deals are about.

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