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Google’s New Game Plan for More Successful Mergers and Acquisitions

“The nature of M&A is designed to be transformative, it’s designed to be disruptive, therefore it doesn’t fit often times in the nice, neat bucket that your company is operating in.”

Google’s New Game Plan for More Successful Mergers and Acquisitions

An M&A Science Podcast

Hosted by Kison Patel

On this Episode

Google’s Principle of Corporate Development Integration, James Harris, discusses how the company is utilizing a software development strategy called Agile to produce more successful M&A outcomes. James explores which traditional practices, such as playbooks, often fail M&A processes and intricacies.

In this podcast, James describes the ways in which M&A practitioners can implement a more Agile approach to each step of the deal, from due diligence to integration.  

Show Notes

00:00 Intro

01:45 James’ Background

4:00 Traditional M&A vs. Agile M&A

7:45 Shortcomings to Traditional M&A

11:20 How Agile Causes Goals to Shift

12:45 Identifying Risks Faster

13:55 How Agile Impact Processes and People Aspects of Working Together

15:30 Agile Techniques that Enhance Collaboration

17:45 Agile Team Structures

21:15 Addressing Collaboration Pain Points

22:40 Agile Process Efficiency

24:35 Closing Deals Faster with Agile

26:25 Challenges to Introducing Agile

27:10 How to Introduce Your Team to Agile

29::35 The Backlog Approach

35:10 Additional Techniques James Uses

35:35 Maintaining Clarity Post-Close

37:08 Integration Planning

40:15 Proof Agile Has Worked, Google Example

James’ Background

James has been working with M&A for approximately 15 years on and off. During his “off” periods, he was an engineer, a developer, and debt manager.

In the beginning of his career, James utilized waterfall methodology until he learned about Agile. Once he started to apply Agile concepts to his some of his teams, he realized that it actually worked. 

Traditional M&A vs. Agile M&A

Traditional M&A is often referred to as a playbook. It’s a very structured, set process with clear phases, deliverables, and checkpoints. The traditional M&A process usually weighs heavily on upfront planning and scheduling. A large pain point for those following this format is that it has little wiggle room for new inputs and alterations that inevitably come up. 

On the other hand, Agile methodology moves away from set structure and schedules. It leverages continuous improvement and responsiveness to the deal environment. This allows space for new inputs and constraints such as time, the flow of information, and market pressures. 

Shortcomings to Traditional M&A

People becoming too task-focused when using checklists. It is easy to become so fixated on accomplishing the listed tasks that people often don’t step back to make sure that they are grounded in the key objectives. It is crucial to answer key objectives first because you can iterate them as you move forward.

Another common shortcoming is that there is not much space for change. When you are set on working through checklists, you could miss new opportunities and areas to investigate that could be beneficial to your deal. James recommends to not only have key objectives, but secondary ones as well. 

How Agile Causes Goals to Shift

During a deal, you are constantly faced with new information and variables that could cause your goals to shift. Agile allows you to look at different pieces and pivot the direction, emphasizing open-mindedness, learning, and growth.  

Identifying Risks Faster

When identifying risk factors, James recommends looking for the “showstoppers;” the things that give you pure heartburn. Focus on those first and let them surface. This allows for more time to address challenges that could arise and modify processes accordingly.

How Agile Impact Processes and People Aspects of Working Together

James remarks that there is a bit of an iterative process around deals and the flow of information and negotiations. He details a weekly sprint of different teams working through the information. It gives them time to process it, ask questions, etc. In the end, they’re all trying to finish the deal together and are focused on the long-term. 

Agile Techniques that Enhance Collaboration

James emphasizes sprints, phases, and goals. He detailed an example where they wanted people, but did not have enough physical space at the current office. This information is a one sprint result that now needs transferred to another team that’s actually building out the infrastructure. The infrastructure team has to sprint to find more details and how they can make it work. The process continues, iterating to a point where they are at a clear understanding of what they should be doing. 

Agile Team Structures

Deal teams are typically composed of two major subgroups: deal and integration. In Agile M&A, there is an added layer of cross-functional team support. This allows for issues to be tackled more robustly and to give more support and resources where needed. 

Addressing Collaboration Pain Points

Being aware of another team’s perspective is key to tackling collaboration issues. James encourages individuals to spend time in a different domain to understand their processes and how they work. 

Agile Process Efficiency

Agile processes ultimately promote efficiency by allowing for variability and ability to shift pieces around. Agile processes aim at building a foundation for a deal that could fluctuate very much rather than planning a structured procedure.  

Closing Deals Faster with Agile

The quality of knowledge and the deal in general are much higher with Agile versus in the traditional waterfall method. This is because Agile focuses on asking and answering questions that are key to the deal. 

As previously mentioned, James also emphasizes the importance of cross-training teams in Agile. This allows for you to see the other side and ultimately bigger picture, which could lead to finding issues that you could have missed if you were narrowed in on one aspect of the process. 

Challenges to Introducing Agile

One of the main challenges to employing Agile is working with domains that don’t understand coding. You have to reframe it and use language that fits the process side, but really creating an Agile process. This can include expressing the importance of focusing on key goals. 

How to Introduce Your Team to Agile

James asks individuals on the team about what they think the goal is for the deal, which begins to shift thinking. From there, he asks what do they know, what do they not know, and how do they plan to know more. He feels these questions help more than a structured list. 

The Backlog Approach

It is much more efficient to send questions in smaller groups of 20 or 30 or so instead of sending long lists with upwards of 200. This way, you can prioritize questions and requests and build off of them throughout the process. 

Additional Techniques James Uses

We are aiming to get the entire team to understand and feel comfortable about reaching the first strategic objective that came from the deal rationale. With such team to ensure any ambiguous items are well-defined by asking questions. 

James asks what something supports, where it fits, and it’s importance. If it’s not important, then it get knocked to the backlog list. 

Maintaining Clarity Post-Close

Many utilize some form of metrics when executing deals. While these work well, James looks at objectives. He mainly tries to ensure that the key objectives tie back to the integration objectives, which should tie back to the strategic rationale. He points out that while you want to push everything to finish as soon as possible, you don’t want to erode other aspects such as good values.

Despite pressures, everybody can live with later, as long as they know that you're really able to deliver on later. However, if later becomes never, then you've lost your credibility.

Integration Planning

Oftentimes there is an integration hypothesis, which is ideally how everything will work and fit together. James describes that you begin the process of seeing if it does or doesn’t. When it doesn’t, it acts as a signifier that you need to carefully go forward. 

Then, you create a checkpoint during the process. At the checkpoint, you can assess if this is the right direct to continue going or if you should pivot. This process of updating the hypothesis turns it into more of a thesis statement or sketch outline. Each layer adds more detail and clarity. Checking goals and evaluating whether they need to be refined is also important throughout the process. James usually has 30, 60, and 90-day check-ins. 

The other piece is feedback. Continue to hold weekly sprints to ensure that everything is moving forward. For integration managers, having a handoff process and proper delegation is crucial to keep the process continuing efficiently and with clear ownership. 

Proof Agile Has Worked, Google Example

James details his experience with a company called Titan Aerospace. Their idea was that you can have Internet connectivity coming from satellites.

Google and Facebook were both looking at these technologies. Facebook bought one company, while Google bought another. This is where James was brought on the team. He describes that it was pure Agile because it was not a core business of theirs. So as they started to do the diligence, they created a series of questions that they needed to understand.

They started out very high level, almost a purely philosophical perspective. And then as they started to execute the deal and diligence, they realized that they needed more domain experts. James worked with the HR team to start pulling resumes of people who had worked in aviation, solar power, etc. As he started bringing these people in and they were amazing domain experts, they would start asking questions about an FAA certification. And like, we haven't asked that question. So that was an FAA sprint.

James found it incredibly helpful to kind of have the flexibility to work through the diligence integration planning, because the deal moved very quickly. Every new domain expert brought in a whole new set of questions that the team hadn’t thought about. James recounts mini sprints because of all of the questions that they brought in. Overall, he thinks thinks that they did a really great job of getting the right people to understand what it was. They knew it was really high risk, but several members of that team are currently on other projects at Google, which is a great opportunity for them.

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