An increasingly competitive world virtually demands growth strategies accelerated through mergers and acquisitions, but achieving M&A success is daunting.
The chief executive must set the context for M&A strategy and focus the organization on forward integration of new resources, processes and values, a corporate development expert told the AIM CEO Connection recently.
Doug Flood, Vice President of Corporate Development at LoJack Corporation, said that M&A requires new metrics, leadership and capabilities. The CEO must communicate relentlessly, Flood said, to integrate the new business successfully with the core business.
It is that integration that drives most value in M&A, according to Flood.
He made his comments during a discussion on Growth Strategies with a dozen chief executives taking part in the CEO Connection in Medway. Flood told the CEOs that integration planning and process are critical to handling the surprises that inevitably arise in the rapid-change environment of a merger or acquisition.
The CEO must:
- Define the corporate plan that is the foundation for M&A strategy as a means to reach the envisioned future of the business;
- Commit the necessary senior leadership time;
- Build relationships to mitigate risk as the new business is explored and change is executed;
- Define and follow a disciplined M&A process with deliberate speed and passion; and
- Drive focus on integration according to plan, and according to what the team discovers including the unanticipated.
“Above all else, the CEO must drive the focus on appropriate integration of the new business,” Flood said.
“That means preparing the company to be changed amid accelerated growth - ensuring the right leaders and champions are in place, and communicating the strategic context and execution progress to all stakeholders so they can understand and contribute.”
Veda Ferlazzo Clark, the former chief executive who moderates CEO Connection, said participants choose the topics for each meeting and that there was keen interest in the management role in M&A. Each session of the CEO Connection includes a presentation from an outside expert, open discussion and a company tour.
“These CEOs learn a tremendous amount from one another. It’s a uniquely valuable exercise for people who are sometimes very much on their own in making important decisions,” Clark said.