Focusing Less on Cost Synergies in Order to Increase Deal Value Creation
Hosted by Kison Patel
Synergies cannot be the prime reason why companies, go and acquire other companies. It should always be hinged on growth, and the capabilities you build.
On this Episode
Kison speaks with Anirvan Sen, the Founder and Managing Director of Fifth Chrome, a professional advisory firm that specializes in M&A integration and operational growth. With a strong background in growth strategies for companies like GE, AkzoNobel, Coca Cola and Stryker, Anirvan is also a regular trainer at the Institute for Mergers, Acquisitions and Alliances.
In this podcast, they discuss creating deal value by focusing more on growth capabilities and revenue synergies, instead of cost synergies.
I think what's very important is that you have a very, very clear value strategy defined up front. This should be your number one priority on day one. You should have a blueprint rather than a checklist of things that you need to do. And when I say value creation, I mean value creation, not just by doing financial and organization restructuring by saving costs here and there, but more importantly, how do you sort of unleash the hidden efficiency opportunities? Once you've got the blueprint, I think what is very, very important is that you back it by a strong leadership team
00:00 Introduction and Anirvan's Background
02:21 The Harm of Focusing on Cost Synergies During Post Merger Integration
04:40 Examples of Approaching Cost Synergies Incorrectly from Anirvan's Experience
07:57 The Correct Way to Approach Cost Synergies
13::56 Techniques for Process Improvement that Companies Often Miss
17:35 Step by Step Approach
24:29 Aligning and Prioritizing the Customer Journey
26:02 Tips for Aligning Teams Around Customer Journeys
29:05 What Should Practitioners Focus on To Optimize Value and Growth Capabilities
31:22 Why Do Revenue Synergies Plans Often Fall Through?
36:04 How to Validate Revenue Synergy Goals Early in Order to Understand the Impact
42:30 Example of a Deal That Focused on Optimizing Growth Instead of Strictly Costs
47:20 Ways Practitioners can Optimize Value and Post Merger Success
51:00 Craziest Thing Anirvan has Seen in M&A
53:46 The Conventional Way of Capability Building
56:12 Closing Remarks and Ending Credits
Now available on Spotify