Dr. Lajoux,
You bring up some good points. A few more Board members should also take into consideration are:
1. On the buyside, is the business unit where the acquired company is going to be integrated into operating effectively? Don’t expect an acquisition to fix a BU if that BU is not being run well and/or if its business proposition is not sound.
2. If your company is going to be acquiring additional companies in the future, make sure your company is gaining ‘institutional’ knowledge and not letting all the knowledge gain walk out the door with consultants hired to help.
3. There are M&A automation tools that can help speed up all facets of your company’s M&A processes. Get your company to review and use one. Just as your company wouldn’t try to run their entire accounting system via Excel spreadsheets, they shouldn’t try and run their M&A initiatives using them either.
4. Finally, make sure one or more outside directors has visibility into the M&A programs and processes. Be proactive and not reactive.
Hope these help.
Ken
Dear Ken:
This is excellent advice.
1. I like to think of the process as a decision tree: to buy or build >if buy, to keep or sell units A, B, C…; if keep A, to integrate or leave alone; if integrate A, integrate all A123 or part A1 only; if integrate A1, integrate all functions A1abc or part A1a only..etc.
2. A thousand times yes. M&A is a knowledge management issue, for sure.
3. Agreed. It’s a basic principle of internal controls that what can be automated should be automated, to reduce human error. The question of course is what can be automated. I would appreciate your views.
4. Amen again. Boards often form special committees to review a transaction, but the committees often disband after the closing. Why not continue to monitor postmerger management?