To begin with, to be honest, inside the strategy development realm we climb onto the shoulders of thought leaders such as Drucker, Peters, Porter and Collins. Even the world’s top business schools and leading consultancies apply frameworks that were incubated through the pioneering work of the innovators. Bad strategy, misaligned M&A, and poorly executed post merger integrations fertilize the company turnaround industry’s bumper crop. This phenomenon is grounded within the ironic reality that it is the turnaround professional that often mops inside the work of the failed strategist, often delving in to the bailout of derailed M&A. As corporate performance experts, we’ve discovered that the operation of developing strategy must be the cause of critical resource constraints-capital, talent and time; as well, implementing strategy have to take under consideration execution leadership, communication skills and slippage. Being excellent in both is rare; being excellent in is seldom, if ever, attained. So, let’s discuss a turnaround expert’s check out proper M&A strategy and execution.
In your opinion, the essence of corporate strategy, involving both organic and acquisition-related activities, could be the search for profitable growth and sustained competitive advantage. Strategic initiatives need a deep understanding of strengths, weaknesses, opportunities and threats, along with the balance of power within the company’s ecosystem. The corporation must segregate attributes that are either ripe for value creation or at risk of value destruction including distinctive core competencies, privileged assets, and special relationships, along with areas susceptible to discontinuity. With these attributes rest potential growth pockets through “monetization” of traditional tangible assets, customer relationships, strategic real-estate, networks and information.
Their potential essentially pivots on both capabilities and opportunities that may be leveraged. But regaining competitive advantage by acquisitive repositioning can be a path potentially full of mines and pitfalls. And, although acquiring an underperforming business with hidden assets and other forms of strategic real estate property can certainly transition a firm into to untapped markets and new profitability, it is advisable to avoid investing in a problem. All things considered, a bad clients are just a bad business. To commence a successful strategic process, an organization must set direction by crafting its vision and mission. Once the corporate identity and congruent goals have established yourself the path might be paved the next:
First, articulate growth aspirations and see the basis of competition
Second, appraise the life cycle stage and core competencies with the company (or subsidiary/division in the case of conglomerates)
Third, structure an organic assessment process that evaluates markets, products, channels, services, talent and financial wherewithal
Fourth, prioritize growth opportunities starting from organic to M&A to joint ventures/partnerships-the classic “make vs. buy” matrices
Fifth, decide where you can invest and where to divest
Sixth, develop an M&A program with objectives, frequency, size and timing of deals
Finally, have a seasoned and proven team prepared to integrate and realize the worth.
Regarding its M&A program, a company must first know that most inorganic initiatives don’t yield desired shareholders returns. With all this harsh reality, it is paramount to approach the task using a spirit of rigor.
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