Practitioner Perspective: How culture plays a role in deal speed and how Agile methodologies can, once again, help.
• Bank and finance
• Corporate Development
Culture Role in Deal Speed from a Practitioner’s Perspective
While many factors contribute to deal speed and efficiency, top M&A practitioners note culture clashes often hurt deal speed and lead to discord among stakeholders.
Moving to a more Agile approach, therefore, can not only improve deal speed, but also improve the working relationships between stakeholders.
Here are suggestions from M&A practitioners at Fortune 500 companies regarding how specific stakeholders can apply Agile principles to their toolboxes in order to be more efficient and boost deal speed:
1. Bank and finance
There is often friction between bankers and M&A teams because bank culture has historically focused on all the details relating to a deal during diligence before moving forward.
Successful, Agile-based M&A teams, on the other hand, have begun to realize that when it comes to deals, everything cannot be done all at once. With this in mind, Agile practitioners focus on smaller tasks that have been prioritized.
This approach allows for fewer roadblocks because information can flow between the bankers and Corporate Development teams much faster, which means workloads can become balanced - team members are not waiting for the bankers to get back to them, then suddenly becoming slammed with work when the bankers do.
This also means work related to the deal never comes to a complete standstill.
By learning to “chunk” their work and focus on a few key tasks rather than on all the details, bankers will benefit as well by reducing excess work.
Specifically, sometimes deals really do not need every single question on “the list” answered before moving forward (in fact, 20-40% of requests are usually not reviewed); giving M&A teams the information that is truly needed to move the deal to the next task, and not more, will free up bankers’ time and make for a smoother working relationship with practitioners.
Similarly, Corp Dev teams note that the Legal arena tends to operate like that of the banking culture.
Again, the emphasis is often put on covering all of the bases upfront, but really some of the information gaps and tasks could be addressed later in the process without compromising the deal’s value.
Lawyers and legal analysts working with M&A teams could improve deal speed and limit wasted time and energy by thinking of deals more in terms of sprints and delivering only key information necessary to reach the next step in the deal.
3. Corporate Development
Historically, there has been a trend of secretively when it comes to large corporations and their M&A deals and strategies.
However, more and more Corporate Development teams are realizing the fundamental methodologies of M&A are somewhat universal and can be better adapted and applied through education and honest conversations with expert practitioners.
Agile methodologies are really universal practices that can be organically implemented to improve M&A processes in the world of technology, healthcare, retail...the list goes on.
One struggle for Corp Dev teams that has long gone unaddressed is that their multiple work streams often use different tools.
Addressing this issue by centralizing work tools can greatly improve M&A practices and lead to smoother integrations.
Agile can be Applied to Many Different Company Cultures
Many M&A experts have explored how company culture can affect deals, for example retailers tend to move quickly, while more academic-style corporations are known for taking their time; however, very few of these experts have explored the complex relationships between stakeholders.
Ultimately, stakeholders need to examine their work cultures and be open to adopting new methodologies.
Moving away from a predetermined plan or chain of events and becoming more flexible, adaptive to change, and small-task oriented will help all stakeholders navigate the waters of M&A more effectively, saving both time and energy...and ultimately, money.
These Agile approaches will also boost communication between stakeholders and build stronger, more balanced, working relationships.