Working with the Business Leader to Build an M&A Strategy

M&A is already hard enough, but it could be worse if you don't have the right relationship with your business leaders. They need to understand that every acquisition must have a strategy behind it.

Helping us dive deeper into the importance of working with business leaders and how to make it successful is Michael Frankel, Senior Vice President Managing Director at Deloitte, New Venture Accelerator and Justin Goldman, Senior Vice President, Strategic Finance and Corporate Development at MediaMath. 

"You're either setting yourself up for success or failure based on the relationship you have with the business sponsor." - Michael Frankel.

One of the biggest problems when working with business leaders is the idea that everyone can do M&A; it's a specialty, one where few people have expertise. It is usually the first problem that you will encounter and it can be a challenge to make business leaders realize that they need expert help. They most likely have day jobs and will not be able to dedicate the required time to finish the deal effectively. 

Business Sponsor Lab

One strategy to get alignment and focus from your business leaders is to bring them together for a day, with no laptops and cellphones. This will allow you to develop a clear action plan and start a discussion about the deal uncertainties. 

Build-Partner-Buy Analysis

It also is important to get the business leaders to focus on the strategy first, rather than pursuing targets. One of the things you can do to achieve this is to do a "build-partner-buy" analysis. Why would you want to buy this company? Can't we just partner with them? Or build it in-house? Why or why not? This is a great way to reset everyone's thinking and positions you as a better buyer once you know the answer to each question.

Motivation

Motivation is another significant factor for business leaders. You have to keep them motivated and accountable for the deal post-close. Ensure you have very realistic expectations around financial performance and operational goals so that they take the business case seriously. The fastest way for a business leader to lose motivation is to feel like their goals are unachievable.

The worst thing that can happen is when the business leader starts doing unforeseeable things to achieve those numbers and goals that hurt the deal and lose value. Make sure your goals are clear but also have a backup plan in case your initial goals become unrealistic.

Conclusion

Working with business leaders can be difficult. It is the corp dev team’s responsibility to educate the business leaders because they can see what's coming, know what's going to happen, and what it will take to make the deal a success. Make sure to keep them on point and that they understand the dedication required to finish a deal.













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