episode 

Developing Leadership in M&A

Scott Hile

This episode with Scott Hile, Senior Director, Corporate Strategy and Development at Enviva will be discussing how to develop leadership in M&A, different types of important leadership skills, and how you can develop them.

Jeff Desroches
VP of Corporate Development at Atlas Copco
Ivan Golubic
Former VP Corporate Development at Goodyear
Erik Levy
Group Head Corp Dev and M&A at DMGT PLC
Kison Patel
CEO at DealRoom

Developing Leadership in M&A

10 May
with 
Scott Hile
Or Listen On:

Developing Leadership in M&A

Developing Leadership in M&A

"The reality is, whether you acknowledge them (your weaknesses) or not, other people see them. So getting the feedback, understanding where you have blind spots that we all have, is the key to really rounding out your ability as a leader." - Scott Hile

 

Self-awareness

Good leadership starts with self-awareness, which includes recognizing your vulnerabilities and understanding that you don't need to know everything. You need to lean on your abilities and strengths, mitigate the weaknesses, and help the team achieve the goals. 

Empathy

When it comes to M&A, empathy is crucial. Understanding the other party's position will help you understand their drivers better. Also, it will help you gain their trust faster. 

Accountability 

As a leader, you need to take accountability for your entire team. You need to have the mindset of "everything is my fault". Only then will you step back and think about the things that you could have done better. You have a higher chance of repeating failures if you don't take that time to understand what you could have been doing better as a leader. 

Communication and Listening

One of the worst things you can do as a corp dev leader is to walk into a room and assume that everyone will understand your message. You need to walk in there and take your time to communicate and fully answer your team’s questions. 



special guests

Scott Hile
Senior Director - Corporate Development at Enviva (NYSE: EVA)

special guests

Scott Hile
Senior Director - Corporate Development at Enviva (NYSE: EVA)

Hosted by

Kison Patel
episode 

Episode Transcript

Intro

I'm your host Kison Patel, CEO, and Founder of M&A Science and Dealroom. Joining me today is Scott Hile, Senior Director - Corporate Strategy & Development at Enviva. 

Scott is an accomplished mergers and acquisitions and global business leader known for uniting globally dispersed teams around cohesive project visions and achieving organizational goals.

He's got over 20 years of experience inM&A and worked on over 80 deals. He's also got a law background. Today, we're going to talk about what important leadership skills are and how to develop those skills. Scott, how's it going? 

Great. Thanks for having me. 

Can we talk a little bit about your M&A experience? 

I started on the legal side of the house, practicing in a law firm back in the first of the com run-ups, way back when my hair was less gray and worked on a lot of ventures in M&A deals.

Back then moved back East, went in-house GC for a company doing deals globally in operations, about 32 countries around the world, moved on to another company that had operations globally and was continuing to grow as well.

Most recently, I got coerced to come back into corporate, found a great company that I'm with now that has M&A, so I keep learning. 

How important is self-awareness as a leader? 

It's a good one. I'd say that has to come first, to be honest. Over these years, I wouldn't say that when I was a younger professional, but at this stage of my career, self-awareness is key. 

If you look at leadership, as a good leader becomes something you pursue for your whole career be honest. I don't know if you ever really achieve it at the level that you want to, but harnessing and honing your self-awareness, your empathy, your relationship management. 

I think that's really the key because you need to build trust. And to be successful in M&A with all the complexities that come around with it, being able to quickly build trust requires a level of self-awareness and empathy that you have to focus on to become a good leader.

And with that self-awareness most times it gravitates towards recognizing your vulnerabilities and understanding that you don't need to know everything. 

But you need to be able to lean on your abilities and your strengths, mitigate the weaknesses that you realize and help the team achieve the goals.

The vulnerability, it's hard for everybody, right? You don't want to acknowledge your vulnerabilities many, many times. And the reality is whether you acknowledge them or not, other people see them. 

Getting the feedback, understanding where you have blind spots that we all have. It's the key to really rounding out your ability as a leader, that can be a technical side.

I always joke when I'm in meetings that I know enough about cross-border tax issues, to be dangerous, that realization that self-awareness came, that I know enough to know to call the subject matter expert. 

I know enough to know that it can add a lot of value in deals and you need to look at things earlier, rather than later. Those are the life learnings of self-awareness that came, but I would never claim to be as smart as someone who's keeping up with all the day-to-day changes. 

And when you add the complexities of multiple jurisdictions, it's too much for any one person to keep up with. I also think about vulnerabilities from a leadership standpoint. This is one I still work on. I'm a kind of a big presence in the room. 

And when I'm in a meeting or leading a meeting with team members, I have to be conscious of the fact that without intent, I might drive things too much and I want my team to show off, my team's doing a lot of the heavy work.

Now, I need to make sure that they have a voice and they're developing. Making sure you step back and understand that you don't have to be the biggest one in the room at times. It's something else that I've become aware of over the years. 

What would you point to as some of the practical ways that you can start developing this? Because it's easier said than done. 

A lot of times I ask for feedback, those who work for me or have worked for me. I got done with a meeting and I asked, what could I have done better?

Initially when you're new to a team or someone's new on the team, they might have felt uncomfortable. But I feel one of my jobs is to make them comfortable enough to give me honest feedback. 

I can't get better without feedback, and they can't get better without honest feedback, it has to be constructive. It has to be helpful and part of how you're looking to build upon your career success, but you have to get that feedback. 

Don't be afraid of feedback, embrace it. But one thing I would challenge younger members looking to grow with and corporate development to do is to gain that self-awareness.

Vulnerabilities, I think we are all generalizing, but most people kind of understand their key ones. They might not want to admit it. You might try to hide them. What you need to do is embrace them as well. 

And for some of them, you can work on. For some of them, you can take active steps to figure out different ways to address them, to mitigate them as I mentioned earlier, but denying them is where I think you run into problems. 

We all have folks that we probably know that are still successful, who don't necessarily ever recognize that they have vulnerabilities at least outwardly. That’s more the exception than the rule. 

And the reality is you might not know that they spend a lot of time working on their vulnerability. 

You never really know the people that well to know that they haven't been working on it for a long time, even though at this stage of their career, they see this not really having player vulnerability. 

Can you challenge it? Can you come out and say, Hey, Scott, I wanted to take your time and get some feedback from you and how I can push myself to be better, or some of that where I want to encourage the criticism.

There was a personality test that we did back in one of my prior companies with the team and you got the team dynamics in there, and I'm one of those people whose score is really high for ego strength. 

So that means that you can say whatever you want to me. And I might react like a flash in the pan, but it's over with, and your best friend afterward. Not everybody's that way. And you have to find the best way for your personality type to feel comfortable getting feedback. 

So what I can handle, what I might ask for might not work for everybody. But I think that there are methods to get it in a way that can be digestible for each person's personality type. 

And then once you have that information, that's power, you can do things once you know. It's hard to guess what people think, and it's hard to guess the way that people view you. And I think that's just a key part of developing leadership skills. 

Vulnerabilities and understanding your weaknesses also allow you to use them in a way because other people are going to see them, whether you want them to or not. 

Use them to your advantage. When you know them, you can control how they're perceived by others better. 

So when you're starting an M&A deal, and you're trying to gain the trust of another party. However, that is whether you're sourcing a deal, whether you're negotiating against other people, it will give you a powerful tool to gain that trust.

How do you develop trust as a leader? 

As I've come up through the years, the big thing I've realized is everybody has their different ways of approaching things. So I'll caveat everything I say today with everybody needs to find their own voice, their own way of achieving. 

I've had successes in my life. I hope to continue to. I still have failures, and I can see whatever I want, I'll continue to. But you've got to develop your way of doing that.

For me, I find being empathetic comes easier, but it's been that way since I was a child. It's changed over the years because I've gotten wiser and my remarks and things are better and my openness to differences is much more attuned now. 

And it's come from years of experience. This is all about practice, right? Through all the deals I've done, like try to be better on each deal I worked on. For me, it really comes down to understanding the other party. What are their drivers? 

For those folks that are coming out of business school, you read some of these books like getting the yes and other folks about negotiation.

You kind of understand the other party's position to be successful because then you understand their drivers as best you can. 

And you can tailor how you approach your negotiations to address their concerns because they will have them while still trying to achieve your goals for the deal. 

But the only way you're going to get that information out the other side is to build their trust when they share it. For me, that's coming in different ways. It's coming from in-person meetings. 

We live right now in a world where that's not the same, unfortunately, but there are still benefits. It's hard to gain trust the same if you're on telephone calls and emails all day. 

The positive thing that's come out of the past year, there are many, but one is the video that we're using now that's more widespread. People have gotten used to it. 

You can see people's facial expressions without a mask at your home. And you can have more of a personal interaction. And that's ultimately what people want. Yes, some people know how to manipulate that, but I think they're in the margins.

I generally think people want to feel connected to others, especially in M&A. Yes, the big corporate deals where money is the key driver. 

If you're working on a middle-market deal and it's a private owner, it's their little baby that they started from scratch, they want to know is going to a good home.

So I work on understanding them as a person, making them feel comfortable enough to share the type of information that I can use to help hypothesize sometimes or guess. 

But other times, really hear from them. What are their chief drivers? Where are they trying to achieve this apart from getting paid a lot of money? 

How do you actually develop that leadership ability to be more empathetic?  

Empathy is something that you can learn. Some people obviously have a kind of a natural skill easier than others. 

And you've got to find a way that you can be comfortable dealing with it because empathy also is like we've got to catch emotions. What kind of conversations do you have when you ask them in a deal context? 

Here's a good example. when I was younger, a lot of times whether I was representing a client or even in the early days doing deals, we would show up, there's a process running and you go to the first meeting of management.

You are prepared to talk.  We might talk about the company, but you're not presenting about your own company, you're like, I need to know this about you. Here's my list of diligence questions. Here's what I have to know. You talk to me. 

Over the years, my teams said like, how would they have a pitch deck for us? So that was bred out of competition and processes. 

But in the end, it was something that we use for all kinds of processes, even ones that we sole-sourced ourselves because you're selling the party on who you are. You're making them feel comfortable about who you are as a potential acquirer or investor.

And at the same time, that makes it like a little bit of a quid pro quo. They're going to be sharing lots more information than you'll share with them. But you start it off by sharing a little bit about yourself. 

And that’s the normal tactic that people use as humans to show empathy and to gain trust, such a simple thing. There are so many simple things that I've seen over the years that I see companies or teams not do. 

And it's not because they're not very smart teams or very smart people and they can still have success, but there are things that can make their lives easier. And a lot of them are kind of these simple things.

How do you get the understanding from the other side of the table and what their vision is, and really bring it together? 

It becomes even more important when you're transitioning over to the integration side of it, which we all know the studies show, 9 times out of 10 is what drives success or failure for acquisition is good integration.

And I had been told or read, I can't even remember now, it's been so long ago but have implemented this idea that like that first week, when we're on-site, the team is not allowed to ask questions to the partner. 

For an hour we're trying to integrate who is going to become part of our company. They're there to listen because these people have been answering questions to us, to other potential buyers for however long it takes, could be months.

No one's really asking them questions. So we implement that. So we just did a deal last year here and the first thing we did. Today, the next day, you guys get to ask us questions. So you start to understand their issues because that'll help drive how you approach them. 

Otherwise, you're making assumptions. And assumptions we all tend to have a feeling that people are the same way as us. The reality is everybody's different. 

Some of them will be the same way as you, but other people will be different and you can't get a good approach that will be beneficial to the entire team you're trying to integrate unless you take the time to hear from them. 

What are other skills leaders need to have Scott? 

If we're talking about books, one that really resonated with me is a book called Extreme Ownership. When you read that you've got retired, US Navy Seal team officers Jocko Willink and Leif Babin. 

Military Navy seals are different from just going on with life and death. This is true, they've done a great job of showing or realizing actually if you read the book, how much some of what they learned and experienced can be applicable in the business world. 

Simple things, admitting failures, checking egos, delegation, leading up the chain. They're all simple concepts, but they do a good job of pushing that. And this idea of a leader having to have extreme ownership, but the team performance falls on you. 

That has to be the key driver all the time. Not that you didn't know this, but it became more pointed to me after reading the book. When something doesn't go the right way, If the team fails at whatever it's trying to accomplish, what did I do wrong, right? 

We have a good team. It can't be viewed as what's their fault, they're not good enough. Did I give them the level of training? Did I help them understand the goals that we're supposed to achieve? Did they get enough support? They have enough information to be successful. 

So that's one of the things as a good leader in M&A you step back. And if there's a mistake or an opportunity for improvement, how could you have done differently? 

And lots of M&A professionals and I've fallen into this, other times, you're busy, these deals can get very hectic and, and taking that time seems like you don't have time for it.

But the reality is the team is never going to advance. The team will have a higher probability of repeated failures. You don't take that time to understand what you could have been doing better as a leader. 

One of the most hilarious things is they're lying in there saying the first rule of leadership is everything's your fault.

That’s what the mindset you need to have as a leader. So there's a bit of advice for kids maybe, but it's really the truth. As a leader, it falls on you and what does that mean? And how do you deal with that as a leader? 

I worked for a renewable wood biomass company. So it's kind of tongue in cheek to some extent, but seeing the forest for the trees, this is really something you have to keep in mind. 

You can get so far in the weeds on things that you're missing the strategic goal. That has prompted it and there are lots of other good groups out there.

The big three consulting for sure. I was lucky enough to have a boss in the past who harped on this. We came out of big three consulting, but it's keeping that strategic picture alive in everyone's mind throughout the process. 

So when you're getting deep into diligence, when you're worrying about integration planning, when you're heavy in negotiations, you know, what's the ultimate goal?

Why did you start this process, and staying on course for the strategic reason you started it in the first place? That helps you avoid getting fatigued. 

Helps you avoid getting too pregnant on deals, not being able to take that step back and see the deals gone the wrong way. And it's not the right decision to continue.

Those are hard decisions to make, but when you keep that strategic view, a high-level view at the top of your mind, and everything that you're doing in the process for the team too, it helps the team understand why decisions are made. 

It gets lost. You talked about it, in the beginning, a lot of times, or there's some high-level statement of strategy. 

And then you're just in the middle of this deal and taking that step back and making sure that at least you, as a leader, are maintaining that strategic view, that 30,000-foot view is the key for  success as a leader in M&A.

How do you prevent that from happening? What can you actually do to really make that stick and it doesn't get forgotten? 

It becomes a top part of slide decks and enforcing folks to tie diligent risk assessments and how we're looking at valuation, how we look at integration. 

The steps, the timing, how much of your staff you're going to put on one thing versus another need to be tied to that strategy. 

I've seen companies just let folks loose. And some companies bifurcate the integration team as the operational side of the house. They don't even necessarily know what deals are taking place. 

And then the next thing, they're like, Hey, we just have to revive this company, go make it work. And sometimes they don't even get a full view of what was thought about at a senior level and executive level for the strategic driver.

They're going to get it done. They're competent people. They're going to integrate in the broader sense of the word, but if you want to integrate successfully, you can't destroy value. You need to capture the value that you expected. 

And if you don't communicate all those things down through and tie your priority activities, you're scorecarding through those.

So for instance, on our scorecard, the metrics that we're watching have to do with those strategies. If its sales team is super important to you the last thing you can have is high attrition of that sales team. 

And if you decided that you thought it's more important to make sure some other area of the company was going to get all the resources and you kind of just figured that the sales team and the target would stay and they leave, that could destroy the whole value.

If they take the customers with them that are not under non-competes and they're gone, no matter how good you did at integrating your IT systems, it doesn't matter because you lost your revenue. 

Those types of things can lead to big mistakes. And there's nothing too small.     

And another one on my list would be the idea of communication and listening. These all tie together.

Communication seems in general, in business, like one of the bigger challenges. We have so many new ways to communicate with each other, but in so many ways, we don't actually communicate. 

And as simple as putting together slide decks and internal, and you're using acronyms and you're not defining them. If you haven't thought about the fact that maybe there's a new executive that's going to be in the room, they didn't come from the industry.

And even if they had, it's not an industry term, it's a company term that puts them in an awkward position. If it's a key part and it was so simple, just sit there and define it. 

It could be at the bottom, but just give people the opportunity to understand everything that you're communicating and make sure that you see that they are hearing you and understanding.

One of the worst things I can see from a corporate development standpoint is you walk into a room and you make an assumption about your audience, internal or external. 

And you set your communication up as if they understand it and you walk into there and you don't take the time to fully communicate what went on? Whether it's your work, an example for that would be you knocked out some options in your analysis to present a structure.

So you walk in there with just that proposed structure. You're going to beg the question by executives. So your smart folks, they're gonna start raising this. 

And you're going to be on the defensive saying: ‘Well, we did think about that”, but your presentation didn't present that. You could put it at the bottom. You can say, we thought about it, it was better. 

But that's going to give them a level of comfort that not communicating that same information doesn't provide. And then listening and communication always go hand in hand. 

You’ve got to listen first. And then turn that to how you communicate when I'm in meetings with executives at every company that I've been at. Executives have certain things that they're worried about. 

If you walk in there and you keep presenting the same thing that might happen the way they did it before, but you didn't realize it has the same problematic questions.

And if you're the executive, it's like, why are they not listening to me?  I'm telling them, I care about this financial metric. I'm telling them I care about this risk. Why aren't they addressing it? 

And then you're losing the audience because you didn't listen the last time, change your communication the next time. It's a simple way of solving things. 

And it's a way to build trust with the executive leaders who ultimately are people you're trying to get over the hump to take a risk. You want to minimize that risk. Decision, that's usually a very important one for the organization.

It's just an opportunity loss. So yes. Can things get done, even though you did that? But could you have been doing it better? Could you have made the conversation run more smoothly and focus on other key areas where you really need them to think and pressure test? 

And instead of the pressure testing something that you just didn't take the time to think about ahead of time that you knew was an issue for them.

Are there any thoughts around that? When we look at communication and listening are practical tips for others to improve that in their practice? 

It's a big deal for corporate development folks, to not look at legal documents, for instance, as something that lawyers do, because then you've lost control of your transaction. 

My EVP and I were talking about it just recently. You're running this deal and that deal the ultimate commercial deal is getting paper, and if the paper doesn't look like what you've negotiated, then that's a failure on you as the leader of the transaction. 

When you go grab these legal agreements, that fin of agreements, they can't look like a foreign language to you. 

More so, even when negotiations happen and I found this to be a constant when you're dealing with cross-border deals, where English isn't the native language with the other side. 

If you can understand how to describe why this is in the agreement. The business party and the other side hearing it from you can be more impactful than the lawyers. 

It's not always the case when it comes to commercial terms. If you can explain it, this matches what we've agreed to, that's going to be much more impactful. That means you understand it. 

Not just say I'm sure it does and then if their lawyers point out that it doesn't, you're losing trust. I think that's just a key thing that you always have to be conscious of is understanding how all the communications that come across through those sides are impacting the listener. 

How do you influence leaders to start thinking about integration earlier rather than later and include the target in those discussions which would show a great deal of empathy?

We have been successful in doing that. I will tell you that initially, and this was prior to my current company, it was not thought of that way. 

And we had to take the time and show statistics and studies that one, how important integration is that was the key linchpin to getting executives on board. 

When you show them, even if you can go look back at prior deals that maybe weren't as successful as, a company would lie that the failures really emulated from the integration failures. That's going to be the easiest way to get people past. 

Past examples of your current company and statistics on the outside of what other companies experienced who's successful and who failed. 

That's where we started that got us into a position to have us have a decision to put and then select an integration manager early in the process like at the time of signing an LOI and have them there. 

They're not going to add much value. It's not about them adding value. It's about them hearing how you get to the deal closing. So they understand the key drivers, not only for you as the acquirer, but also for the issues that the other side has. 

Because that will help define the way that they will ultimately approach integration that turns into we'll look at integration early in the process.

I worked for a private company before my current one. So we didn't always have the luxury of a long break between signing and closing for various approvals. So we did a lot of simultaneous signing, closed. 

The problem with that is you didn't want the target, employees necessarily knowing about it. So your access was limited. That was an excuse in the past for some folks as to why you couldn't do much integration because you're like, well, we can't talk to these people. 

In reality, I said, that's not a good excuse. You need to acknowledge how important this is and do the best you can and have hypotheses and mitigation, countermeasure strategies. 

So that when you do have the real people in front of you, you're not sitting there hoping that you figured out the answer in real-time, which takes time.

You also can tell the senior executives and appreciate this, that if they haven't ever been on the acquired side, they've never been a seller. They don't always appreciate what it's like when somebody comes in. 

The perception isn't that the acquirer doesn’t know what they're doing. The presumption is that they've thought hard and long about this. They've been targeting this, they've done all this diligence and they're going to walk in there and have all the answers. 

And you're not going to have all the answers, but you can definitely plan and you can plan and have approaches and timing on things. That's going to show the target a lot of empathy for the situation.

It's also going to show that you appreciate their side of the equation and ultimately, they need to be successful within the combined organization. 

Barring the exceptions while you're, it's a company that you buy the assets only and the people are coming along, but that's not the majority of deals. The majority of the deals, how people need to feel engaged and so use real-world examples.

And there's nothing better I've found to help executives understand the value of those real-world examples. 

Any thoughts on how to communicate the strategy differently for the board, media, and employees. 

It's something that I've struggled with and found some solutions to the public discussion of disclosure has the most views on it because you're going to have a team of people that care immensely about how the public perceives that discussion. 

But as we've gotten to closings, you have a kind of a three-headed beast approach to this. So what's going to be the story to the market, the customers, the third parties that are going to be involved in the acquisition for the target. 

And your own potential customers who may not love that you acquired that company for competitive purposes or whatever. You've got your board who needs to understand. 

In reality, I'll be more surprised if the board wasn't sure of the strategy, in the first place, and part of the setting the strategy that ultimately resulted in needing or pursuing the acquisition to the extent that they were not fully involved in that. 

I think that's about being concise and tying it back to what should have been normal conversations going on with the board and keeping it in line with what your executives have been presenting to them.

From an employee standpoint, you have two sets of employees, right? You have your own internal employees, which I think sometimes people forget about them as well. Most companies find out about the deal because there's a public announcement. 

Lots of companies still do that. That’s how that approaches the optimal way that I would like to see it done is that you have an internal communication and set the tone for what this means for the company, with this acquisition and what the expectations are.

So as far as how that plays would like more detailed elements of the strategy and the metrics that you're looking at. Obviously, there are things that need to be at a higher level. They need to be maintained confidential. 

You don't wat to out in the market for how you approach things and you need to be thoughtful and use the appropriate people within your organization to decide what's okay to share and what we should put at a higher level for that audience. 

For the target employees

The same goes for the target employees. One of the key things there is making sure that to the extent you have senior management or any management staying on as part of the acquisition, that they're part of that storytelling. 

And that they've been brought in line with that earlier than the rest of the employees, because again if they didn't know about the deal, you haven't had an opportunity to build any trust yet. 

So there isn't going to be a natural fear that they would have. Coming from their own management. It's going to be easier to hear from them, but then they need to be the ones espousing your views and how you see this as a good thing. 

It's more than that. “Oh, we'll get great synergies. And this is going to be a great combination”. I'm talking about the next level down. 

We love your customer base and we want them to become part and benefit from the adjacent elements that we can now add on and bundle together to have a more robust package and to answer a lot of the issues or address a lot of the concerns that they have. 

If it's software, you know that the combination of these two is going to be more powerful, but this is how we're going to approach it.

This is how the integration team has been thinking about this for a while and has decided to approach this. Now we want your input on that, and then we want to roll this out quickly. So we don't want to lose that great first opportunity to reach out to those third parties. 

Mostly customers, but suppliers as well, and be the one that has that first message to them, especially before your competitor may be trying to get their air and say, “Oh, this is going to be a bad deal for you that they've acquired, or that they merged.”

How do you make sure your message gets through to your people during meetings? 

I didn't get to where I am and by far I'm not where I can ultimately get to, but without help from others. 

I had a boss when I first moved over from legal to corporate development, who had come from big consulting, had a great handle on how to approach presentation and presentations, in general, we all know typically means PowerPoint. 

And I found my career where a word was the only tool I used. I got into corporate development, started using Excel more. And then these days it seems like it's PowerPoint, PowerPoint, PowerPoint. 

But there's using PowerPoint. And then there's really mastering PowerPoint. I wouldn't say that I've mastered it, but we spend a lot of time on our presentations.

And one of the things I've done kind of repeatedly as I've moved through my career is to look at what's been done in the past, see where you can enhance that, and make sure you've got a consistent message to your senior leaders into your board. 

I don't think people understand the value it is for them to see things compared to apples, to apples, to apples.

It's not that there are no specific things you're going to cover that are different between deals, but certain elements, whether you're showing solution analysis, whether you're showing output from a DCF model, those should be shown consistently. 

And then they can come to expect it, they'll know where it is. And this goes into a bigger view on you've heard me talk before it's on about, pre-reads like I'm a big advocate of pre-reads. 

The obvious reason is it gives the opportunity for the audience to get up to date so that the discussions with folks that tend to have very tight schedules and not a lot of time, you can focus on the key issue.

That's kind of like the table stakes reason for a preread. And you can't be assured that everyone's going to have time to preread, but at least you give them the opportunity. 

And you walk into a meeting with people who are likely to be at least at a level of understanding to have a good, solid conversation and be able to make decisions.

I think the other thing about pre-read is you have to build a presentation that stands on its own. Presentations for these types of things that are TED talks. It's not about the audience waiting to see and wowing them during the conversation, it's not pitched. 

As much as it is a presentation that stands on its own that can be read and the logic holds true throughout the document. You've addressed the issues, you've identified the risks, you've shown what the team's done, and that takes time. 

And forcing the pre-read with a team, I've found it makes all of us work harder to make a better story, a stronger story, a more concise story. 

These days or another technology I still found myself at times doing old-school storyboarding. That's sitting there and grabbing some masking tape and sticking the slides up on the wall because it's easier to edit that way a lot of times. 

Everyone can see them and you can pull things out and put placeholders in. Those are the things I was taught long ago and I still use them.

Sometimes we do it from a technological standpoint, but I found that we were a big user of shared access so that everybody can be in documents which have its benefits for shortening the timeframe to get things done. 

Then the negative is if you lose control of that document, then you can have the messaging get mixed up.

And somebody that's got to be the leader has to take responsibility for making sure that you always are thinking through how it flows, so that when it goes out to the board to executives, to whomever that when they read it, it makes sense to them. 

From the executive summary, all the fruit of what you decide to include in the appendix. That's a big deal for me. 

Anybody who works has worked for me, or who's working for me will say that I harp on that immensely. How pretty it is, and everything else. That's a skill-level thing. 

The better you are, the easier you have with the audience. But I think I loathe things where people throw information up on a page.

And then expect the audience to see what they saw and not have the self-awareness that if you've been working on a deal for two to three months, and they're seeing this information for the first time, they don't have anywhere near your view and understanding of the transaction. 

So what seems obvious to you may not be obvious to them and you have to learn and teach yourself the skills to take a step back and think if someone hadn't seen this before, how do I in a very concise manner, get them up to where I am and understand? 

How do I feed them the key things, how do I drive them to the way that they should review this? And that's about actually being more concise than it is more information. 

You have to build the trust before that you're doing enough work and doing that hard work and that diligence and the background, you're not just throwing up pages like it's a sales pitch.

But when you're showing them the information, it's call-out boxes, this is what you should be gaining from this. And then it's a backup to the call-out through visual graphs versus just words on paper.  

Words on PowerPoint look like just bigger versions or sometimes the same version as a word document. It just doesn't impact the audience at all. And you don't want people just reading things. You don't want to be reading things. 

That's a lack of self-awareness. I think that they're very smart people, but their impact on the audience could be different if they would've chosen a different approach. 

I want to get over to developing your team. As a leader, you need to develop your talent. So how do you foster an environment where they can improve?

First and foremost, they have to have an environment where they can fail. To learn there's a quote out there. I think Jocko sent a lot too, that there's no growth in the comfort zone. You had to give the people an opportunity to be in a non-comfortable zone. 

But when you're trying to develop them as future leaders, they have to have enough training to make the mistakes you've made. I made plenty of mistakes. You have to have people on your team who learned from their mistakes. 

If you have people on the team that will repeat the same mistakes over and over again, that's a bad sign, but I find that most people in our area of work are not the type that likes to make mistakes or type-A go-getter.

They don't like to admit when they don't know things. We talked about that earlier. So how do you allow them the opportunity to try things out and give them the protections for the information to be successful and then coach them up afterward? 

We spend a lot of time on that. You have to give people an opportunity to present in front of people, as you get further in your career, and you do have the voice and you are the expected person to present on things. 

You forget when you were back as a junior, maybe one, hoping to even be sitting in that meeting even if you just got to listen to take notes next to be able to say anything. 

It's only through being in those meetings and saying things and watching others, that you can learn how to do things. 

And every meeting has got different requirements on whether it's appropriate for a more junior person to speak or not, but having that opportunity and then seeing what they do with it is part of that learning process you've got to put them through. 

There are risks with that. Ultimately, as we've talked about Extreme Ownership, you own the results. And if they fail, as a leader, you have to think through why did they go to that meeting and not accomplish what you thought they could? 

If you don't have an environment where people have an opportunity to step up and stretch, and if they fail to be coached, you can't have a successful team.

When's the right time to bring the subject matter expert in? I still have a tendency to do that. I might be a hundred percent accurate. I might say the exact thing. That's a hundred percent right about something. 

Maybe the executives would rather hear that from the people that are getting paid to be the subject matter experts sometimes.

And you can feel comfortable that they're going to walk in and say what, who knows the truth and that's what she wants to accomplish. But as a leader, you need to step back and be like, what's the best way to do that? 

Do they really want to hear it from me in corporate development? Or do they want to hear it from the head of technical accounting?

So your job as corporate development is to know enough to know what the answer is, get the person, make sure they're aligned, have the answer, but invite them in to be the one or get information from them that they signed off on it. And that's what you prefer. 

And that could be way more powerful than trying to leave the executives thinking that you know everything and that makes you a better leader because I don't think it does. It's something I'm continuing to work on. 

How do you keep people motivated? 

Challenge, I think again, like most things as a leader, you have to constantly work at it. 

One of the interesting things, I'll tell you some practical stuff that I do, but one of the interesting things that I think you hear about, are all these differences in the generations. 

There are differences to some extent, but you're generalizing in that. One of the things that are different is the work environments are different.

So the way that a work environment was with me growing up with how people acted, a lot of it, wasn't good, things that I dealt with and worked through, I don't want to emulate.

But does that mean that team's not as good because they're not suffering? Like maybe I had to in my early days. No. It's like, what's going to motivate that team member to perform their best, to continue to grow. 

And it's not a one-size-fits-all. I don't want to, I don't have carbon copies. That would be awful. Because of that, I've got to understand and grasp what's going to help each of the team members be successful on their own. 

And being exactly like me. It's not a success, it's not a success for me as a team leader. Cause I'm not getting a diversity of thought. So that's kind of at the high level, giving them a voice and making sure that they're heard and respected that way.

We were all at that stage in our careers. We all thought that we thought at that stage. And if you remember back, I'm sure we all thought we had all the answers. 

Lots of times I did have really good answers and the folks that listened and thought about the best way to act on that were ones I view as some of the best leaders I worked on. Practically speaking, I think you've got to keep your motivation and morale up.

All of us have had challenges this past year because we got thrown into this COVID environment where you've got people that are teleworking. You're not near each other. You're not interacting the same way at a personal level. How do you keep that up? 

You have to think of something new to keep them motivated. On deals, not every company's out there throwing huge closing parties and bonuses and everything else for deals. 

But for me personally, I still do things out of my own wallet to try to be nice and to recognize folks that have worked hard. I truly believe that they were, and they deserve some recognition for that. 

What's your best advice for leaders?

You have to find your voice. Everybody has their own voice for things you're never as good as somebody who copied people say that all the time. And I think that's true. You can emulate things that you like. 

You have to find a way that works for you as a leader. That's a big thing. Look at folks that are really good leaders and some people get intimidated that they can't do that.

I don't think that's true. You just haven't found your voice. That's going to be impactful for the teams that you've managed. And along with that is what we just talked about. Don't assume that what motivates you motivates others. 

It's a simple mistake that we all can make that everybody's got the same view on things. If you do, you can try that at first. Maybe it does motivate them, but if it doesn't, don't keep making the same mistakes. 

We talked about trust. People need to trust you. Trust is earned. You can't get it any other way, but it takes time and effort to do that. 

In the M&A world where time is never your luxury you have to learn ways to do that more quickly, but how quickly can you gain at least enough level of trust in order to be more successful in a transaction? 

In preparation for this, I was kind of looking around and I saw folks from our sixth president, Quincy Adams, if your actions are inspiring others to dream more, learn more, to develop more, to be more, that's what leadership really is.

It's not about you as a leader. It's about the team and it's about the team's success. That's the basic stuff. It's MBA stuff, it's business school stuff, it's military stuff, but it's true. 

It is all those things. It's all of those places because that's the truth. So you've got to have the team be successful and that's a constant effort.

What's the craziest thing you’ve seen in M&A? 

Oh boy, crazy and M&A go together like chocolate and peanut butter I guess. There are lots of crazy things I've seen and heard and experienced. Let me split it into two. 

There's the craziest, really great thing and one of the other crazy things, it's a crazy great thing. It was early in my career, we were doing a deal with a company in the media. It was going fine, but it was kind of stalled in the negotiations and getting to final deal terms.

So not clarifying things we said: So let's meet in person, cause that does usually help to get over the lodge. And we picked New York because it was easier for them to get to. 

I didn't ask anything more. They said, sure, well, we get to New York. And before negotiating sessions, we meet up and do the social thing and take them out of the city. And they're talking about how they've never been to the US before. 

And they always wanted to go to New York. They were more enthralled with New York city that they basically gave on all the terms that we have had an issue because they just were excited about the opportunity to visit New York. 

And you're like, if I knew it had been that easy, I would have invited him to New York, like two months earlier and basically given them a reason for a vacation and a visit. It's little things like that that could surprise you.

At the other end of the spectrum, and this is a bit embarrassing for me, more than a crazy thing, but we were running two deals at the same time. 

My team was managing one of them for a domestic while I was off in Australia, but still maintaining a level of interaction. When that deal gets done I come back and I have to get on the steel and we were in for a negotiating session.

It was down to the final points. As a deal point, I knew a number that our board really, really cared about hitting. It would be very positive, even though we had the authority to go above that. 

The division president at the time was more concerned that they were going to walk away from the deal, maybe I was a little younger, but I was no more brazen.

And there was a big debate that went on while the other side was out in the breakout room. I said, look, we've got to trust me to do my job. If I'm wrong, you can get me fired on the way home. I'll call the CEO, myself that you're going to accept this. And you got to trust me on that. 

It was one of those moments where I kind of put it out there and then the deal.

So people walked back in from the other side, I put that offer out there and I've never seen the guy do that, but the other guy put his hands on it like that's perfect. And our provincial president jumped up, shook his hand, 

tThe deal was cut. 

I didn't lose my job thank goodness. We had a great closing dinner and funny stories to tell after that,  buy drinks, even later with the deal team.

But that was one of the crazier times when I put my job on the line because I thought I was right. We did save a good amount of money on the deal. So I might not be sitting here today if it has gone the other way.

Ending Credits

Thank you for taking the time to explore the world of M&A with our podcast. Please subscribe for more content conversations with industry leaders. If you like our podcast, please support us by leaving a five-star review and sharing it. I enjoy hearing feedback and connecting with our listeners. 

You can reach me by my email. It's kison@dealroom.net. M&A Science is sponsored by deal room, a project management solution for mergers and acquisitions. 

Additional educational content is available on Dealroom's blog at dealroom.net/blog. Thank you again for listening to M&A Science. See you next time. 


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