M&A - Mitigating Risk with Soft Due Diligence
Risk Averted through Post Acquisition Integration
Brexit may be slowing things down, but for many businesses this is a great opportunity to acquire and grow their business. The savvy risk takers, the real entrepreneurs, never follow the herd. They know their markets, their business models and can see the ‘patterns of opportunity’.
While some business people are waiting to see what happens next – real bullish risk takers are ready to make a killing. They invest in their confidence, read the patterns and shapes and in times of uncertainty they lead the way and forge new businesses and set up new ventures.
Fastest Growth
Organic growth still lumbers behind M&A activity. You can grow quickly if you pick the right business and the right deal, but you need to mitigate that risk through ‘soft due diligence’.
M&A Activity Dead or Alive?
Don’t think that M&A activity is dead – just because the Brexit deal is dragging. Seriously, who ever thought it was going to be easy does not realise the huge bureaucracy and rigid mindsets that have been forged over the last 40 years. What else could you expect when the single biggest change in European trading is about to take place?
2020 – Opportunity to Grow
As we move into 2020, there are ample opportunities to grow businesses through acquisitions and mergers. Acquisitions, if managed well, can grow very quickly. Mergers take longer to achieve the results behind the drive to merge, but they can work quickly if they develop a blue print for success.
Bullish or Not?
Although the economic climate has meant companies are awash with investors’ funds awaiting investment in expansion, many are still wary. However, as experience shows, the path of good intentions is littered with the remains of acquirer companies that failed to think through the purchase through further than the stage of due diligence.
Synergies not Delivered
For too many chief executives, the actual acquisition turns out to be the easy bit – and only then do the challenges of a less than-thought through integration appear and post-acquisition synergies fail to arrive, reflected in poor performance of the new venture.
Minimising the Risks
To remedy this, a new change or learning strategy can be launched to maximise the expected synergies, speed up the transition to the new ’business entity, and minimise the risks associated with mergers and acquisitions (including cross border deals).
Develop a Growth Mindset
Philip Atkinson says, “We recognise that many company growth plans are based on acquisition, mergers affiliations or joint ventures into new markets – but they just don’t work. Sadly, few go on to realise the full potential, and the reasons behind failure are not to do with lack of leadership, poor thinking or unrealistic business planning.
Cultural Integration the Cause of M&A Failure
Mergers and Acquisitions often fail because they do not achieve the synergies for which they were originally conceived. In reality, the barriers are cultural and behavioural.
Failure to Build the New Entity
Failure to envision a new entity is usually the problem. Instead of thinking of two organisations coming together – they should be thinking about how to grow the new entity. Philip Atkinson maintains that “for all the business development creativity in the minds of the new business owners there is a lack of imagination in knowing how to build the culture and behaviours which will power that new business entity”.
Inertia and lack of Energy
A new business entity is hidebound by its predecessors and the form of business it left behind. The new venture needs a new culture, vibrancy and core behaviours to take things forward.
A successful business is based on a strong and powerful culture driven by behaviours that take it forward
Overcome or go around the Barriers
Barriers to successful post acquisition integration are often cultural or technical and that mean that gains planned through synergy and cost saving simply do not happen. Too often the story is of disruption, misunderstanding and disillusionment.
Lack of Blueprint
According to Philip Atkinson, “Currently, few companies have a firm blueprint that can be applied when purchasing a company,” …further “It is usually an element of ‘deal fever’ that inspires the acquisition which often results in an inadequate road-map for successful integration.”
Atkinson’s proposition is that traditional “due diligence” is an incomplete diagnostic in predicting performance of the new venture and concentrates on hard financials.
The acquirer company often falls foul of cultural anomalies and systems inhibitors that eventually erode profitability for the new ventures.
Challenge the Odds through Post Acquisition Integration
“Some 83 per cent of acquisitions,” Atkinson stresses, “do not achieve the expectations of the investors. Similar failure rates apply to joint ventures and uncharted business expansion.”
Philip Atkinson’s expertise has been in implementing strategic projects and change initiatives with many companies. Specifically, he has spent many years working with major ‘blue chips’ on the post-acquisition and other learning strategies that have allowed them to become successful in their sector.
Current Due Diligence
Due diligence is currently only a partial analysis of the risks the new venture will encounter. If you want to develop a safe strategy, energise the new business and materialise the synergies faster, then you must expand the mindset and the diagnostics from simple ‘due diligence’ to also include ‘soft due diligence’.
This means focusing on management of the new business, creating a forceful performance driven culture. The benefits accrue quickly – the traditional association of confusion and ambiguity of the ‘cocktail of cultures’, so reminiscent of the orthodox deal, is rejected in favour of a clear vision for the new business entity.
Tailored Strategies
That is achieved through their tailored strategies of post-acquisition integration measured in blocks of 10, 20, 30, 100, 250-day post-acquisition strategies that give control back to the investors. Atkinson maintains “we have been there, we have the knowledge, tools and techniques to offer companies a much better opportunity to add shareholder value faster than the orthodox route.”
For more information contact philip@philipatkinson.com
Brexit may be slowing things down, but for many businesses this is a great opportunity to acquire and grow their business. The savvy risk takers, the real entrepreneurs, never follow the herd. They know their markets, their business models and can see the ‘patterns of opportunity’.
While some business people are waiting to see what happens next – real bullish risk takers are ready to make a killing. They invest in their confidence, read the patterns and shapes and in times of uncertainty they lead the way and forge new businesses and set up new ventures.
Fastest Growth
Organic growth still lumbers behind M&A activity. You can grow quickly if you pick the right business and the right deal, but you need to mitigate that risk through ‘soft due diligence’.
M&A Activity Dead or Alive?
Don’t think that M&A activity is dead – just because the Brexit deal is dragging. Seriously, who ever thought it was going to be easy does not realise the huge bureaucracy and rigid mindsets that have been forged over the last 40 years. What else could you expect when the single biggest change in European trading is about to take place?
2020 – Opportunity to Grow
As we move into 2020, there are ample opportunities to grow businesses through acquisitions and mergers. Acquisitions, if managed well, can grow very quickly. Mergers take longer to achieve the results behind the drive to merge, but they can work quickly if they develop a blue print for success.
Bullish or Not?
Although the economic climate has meant companies are awash with investors’ funds awaiting investment in expansion, many are still wary. However, as experience shows, the path of good intentions is littered with the remains of acquirer companies that failed to think through the purchase through further than the stage of due diligence.
Synergies not Delivered
For too many chief executives, the actual acquisition turns out to be the easy bit – and only then do the challenges of a less than-thought through integration appear and post-acquisition synergies fail to arrive, reflected in poor performance of the new venture.
Minimising the Risks
To remedy this, a new change or learning strategy can be launched to maximise the expected synergies, speed up the transition to the new ’business entity, and minimise the risks associated with mergers and acquisitions (including cross border deals).
Develop a Growth Mindset
Philip Atkinson says, “We recognise that many company growth plans are based on acquisition, mergers affiliations or joint ventures into new markets – but they just don’t work. Sadly, few go on to realise the full potential, and the reasons behind failure are not to do with lack of leadership, poor thinking or unrealistic business planning.
Cultural Integration the Cause of M&A Failure
Mergers and Acquisitions often fail because they do not achieve the synergies for which they were originally conceived. In reality, the barriers are cultural and behavioural.
Failure to Build the New Entity
Failure to envision a new entity is usually the problem. Instead of thinking of two organisations coming together – they should be thinking about how to grow the new entity. Philip Atkinson maintains that “for all the business development creativity in the minds of the new business owners there is a lack of imagination in knowing how to build the culture and behaviours which will power that new business entity”.
Inertia and lack of Energy
A new business entity is hidebound by its predecessors and the form of business it left behind. The new venture needs a new culture, vibrancy and core behaviours to take things forward.
A successful business is based on a strong and powerful culture driven by behaviours that take it forward
Overcome or go around the Barriers
Barriers to successful post acquisition integration are often cultural or technical and that mean that gains planned through synergy and cost saving simply do not happen. Too often the story is of disruption, misunderstanding and disillusionment.
Lack of Blueprint
According to Philip Atkinson, “Currently, few companies have a firm blueprint that can be applied when purchasing a company,” …further “It is usually an element of ‘deal fever’ that inspires the acquisition which often results in an inadequate road-map for successful integration.”
Atkinson’s proposition is that traditional “due diligence” is an incomplete diagnostic in predicting performance of the new venture and concentrates on hard financials.
The acquirer company often falls foul of cultural anomalies and systems inhibitors that eventually erode profitability for the new ventures.
Challenge the Odds through Post Acquisition Integration
“Some 83 per cent of acquisitions,” Atkinson stresses, “do not achieve the expectations of the investors. Similar failure rates apply to joint ventures and uncharted business expansion.”
Philip Atkinson’s expertise has been in implementing strategic projects and change initiatives with many companies. Specifically, he has spent many years working with major ‘blue chips’ on the post-acquisition and other learning strategies that have allowed them to become successful in their sector.
Current Due Diligence
Due diligence is currently only a partial analysis of the risks the new venture will encounter. If you want to develop a safe strategy, energise the new business and materialise the synergies faster, then you must expand the mindset and the diagnostics from simple ‘due diligence’ to also include ‘soft due diligence’.
This means focusing on management of the new business, creating a forceful performance driven culture. The benefits accrue quickly – the traditional association of confusion and ambiguity of the ‘cocktail of cultures’, so reminiscent of the orthodox deal, is rejected in favour of a clear vision for the new business entity.
Tailored Strategies
That is achieved through their tailored strategies of post-acquisition integration measured in blocks of 10, 20, 30, 100, 250-day post-acquisition strategies that give control back to the investors. Atkinson maintains “we have been there, we have the knowledge, tools and techniques to offer companies a much better opportunity to add shareholder value faster than the orthodox route.”
For more information contact philip@philipatkinson.com
