M&A Best Practices

FountainBlue’s December 1 VIP roundtable was on the topic of ‘M&A Best Practices’. Thank you also to our gracious hosts at Intel.

Below is a compilation of ideas and thoughts from our conversation.

Our executives in attendance emphasized several times the importance of leadership and transparent communication, especially when companies and teams are undergoing great change. Below is some advice to support a successful M&A experience.

• It helps to have an experienced team representing the acquiring company, with exceptional communication and listening skills.
• Escalations and conflicts will happen, but if you work with a proven playbook, if you’re open about processes and procedures and cultural expectations, it increases the likelihood of success.
• Knowing the reason for the merger and acquisition in the context of the larger market trends will greatly impact its acceptance from within the company and also externally.
• Marketing and operations and IT all have roles in ensuring a smooth integration. Inspirational and authentic communication of intentions and progress will go a long way in growing the trust factor, which helps everyone involved better perform despite ambiguities.
• Empowering those in charge to take risks and make things happen during an integration is a key strategy for helping two parties get better connected. 
• Cut back in areas you need to as you integrate, but also make sure that you invest back in strategic, key initiatives.

Below is advice for start-ups who are seeking to be bought out by big corporations.

• Be big enough in size and stable enough in technology before you seek an acquisition. Consider also corporate investment opportunities even while you’re small.
• If you’re not ready for an acquisition, consider partner with an existing partner of the targeted acquiring company.
• Understand the larger market trends and technology needs and see where your solution might fit into these needs, and which companies might have an interest in your technology.
• Be ready for a culture shock going from start-up mode to corporate, which is by nature more slow-moving and process-driven.

In the end, start-ups are known for innovating, but not scaling. Larger companies are known for scaling and systematic processes, but not necessarily R&D. A successful marriage between the two would help all parties better deliver to customers, and better meet market needs in general.

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