How to Make Mergers and Acquisitions Work
M&A Integration: How to do it. Planning and delivering M&A integration for business success. Danny Davis.
I began to read this book out of curiosity and continued to read it out of interest. I found it a fascinating read. It’s a book that really makes you think. Davis illuminates all those dark crevices of the M&A process – from the acquisition to the integration – that a lot of executives forget about or just hope will go away. Davis asks the awkward questions, having seen so many mergers and acquisitions at first hand. That is one reason why this book is so good. Another is that he gives you road maps for making M&A work.
This book has been a long time in the making. Davis first thought about writing it four or five years ago, but time and a busy consultancy life got in the way of finishing it earlier than 2012. The result is a well-researched and deeply reflective book.
Most M&As fail, and for all sorts of reasons. Two of them are: a) neglecting the detailed implications of a merger or acquisition and b) underestimating the time needed to make it all work. Davis shows clearly how to create a successful integration and equally what can mess it up.
Mergers can fail not only because they’re badly implemented, but because their rationale was flawed from the start. The Achilles heel might be strategic or operational.
To reduce the risk of failure, the integration needs to be considered in depth alongside the due diligence. That’s painstaking and time-consuming, but necessary.
Davis makes a good case for separating what he calls integration governance from corporate governance. Keeping those two functions separate enables the integration team to check the feasibility of the plans from pre-deal into the post-deal phase.
Arguably the greatest value of the book lies in its examples derived not only from Davis’ own observations, but also from the experiences of those executives he has talked to. He gives us some great quotations from people who have learnt hard lessons.
This book is worth reading and re-reading. Every page is full of insights and advice. It’s also well written and for that reason easy to read. Above all, it’s very practical, but without being overly prescriptive. It’s a wise book.
WHAT PART DOES LUCK PLAY IN SUCCESS?
This is one of the questions posed in a new book Luck: What it means and why it matters, by former cricketer (ex-Middlesex captain) Ed Smith. He argues that luck has become a taboo subject in our culture. This is especially true, he says, in the world of sport. It is also widespread in other areas such as business, where hard work, strategic focus, implementation and talent are seen as the route to success. They all play a part in achieving success, but the role that luck plays is often dismissed.
Smith has touched upon a very uncomfortable truth, which is that we cannot control everything, and that chance performs a bigger role in our lives than we like to thunk. Even though we know this instinctively, we shy away from admitting it openly, When The Guardian reviewed my book on entrepreneurs some years ago it smirked at my comment that luck had played a part in some of the business successes. But I was only telling the truth. More than that, a number of those whom I interviewed pointed to the element of luck in their company’s rise.
How do you explain the experience of a fast-growing chemicals company, on the look-out for a specific type of acquisition, that not only finds exactly what they want, but discovers afterwards that the acquired company exceeds their wildest dreams? “It was an Aladdin’s cave of chemical processes,” the new owner said to me. Or, what about the company chairman, who needs to fill the post of research director quickly, who mentions this to a friend at lunch, only to be told: “I think I met the person you need this morning, and he wants to move. Your company could very well be the one he’s looking for.” Or, take the case of the start-up management consultant, who goes to a boxing match at the Grosvenor Hotel in Park Lane, London, and finds that he is sitting next to his first client, who then introduces him to others.
In his book Ed Smith cites one of the three Nobel laureates who discovered the structure of DNA, John Watson. Watson told Smith that he and Crick were lucky, firstly because he and Crick met at all, and secondly because their principal foreign competitors would not collaborate with each other. If they had, Watson speculates that it would have been they, not Watson, Crick and Wilkins, who would have earned the Nobel prize in 1962.
So be open to the chance event that occurs in your life and recognise its potential for your growth.
so this is quantum theory for the lay person!!
I found myself yesterday wondering around Waterstones and chanced upon the much-hyped new book by TV scientist Brian Cox. His book, on quantum physics, was written for the lay person, he’s said. Well, either I’m a dunce or Prof. Cox has no idea of your average person. What does he expect people like me to make of pages of equations?. His many female admirers will be in a funk.
I closed the book and opted for another without dense mathematics.