Adapting to the new world order of M&A

With the era of the mega deal over, Elias Mazzawi MBA93 reveals the new way of thinking that underpins mergers and acquisitions


As the world pivots driven by recession, higher interest rates and supply-side challenges, the nature of M&A has changed dramatically. Gone are the days of the mega deal; incoming are the days of opportunist and strategic add-ons that might not have been possible while the economy was booming.

Deal size is reducing and companies are looking for disproportionate value-add from integration. The emphasis is increasingly on the revenue line. Put simply, that means finding opportunities to leverage the client base and the product set across the whole company.

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“Revenue synergy opportunities where the whole is greater than the sum of the parts represent substantial – and possibly game-changing – value-creation scenarios”

For many, this requires a new approach and way of thinking. A new ball game in terms of skills and activities. New levels of knowledge, trust, alignment and motivation need to be built into the organisation’s DNA. For some, the new opportunities require new skills and activities; for others, they mean an upgrade to and rollout of what, not so long ago, were niche practices. 

Three strategic building blocks

Integration becomes key; and the opportunity is not limited to post-M&A.

Strategy 1: Cross-sell

Cross-selling is often the jumping-off point because selling a discrete product or service from one part of the organisation to a client of another is the most straightforward. In terms of potential, it typically delivers incremental rather than game-changing revenue; one product at a time. Organisation and infrastructure-wise, it requires channels and processes that can be one-off or campaign-based; mobilised typically through pragmatic CRM operations, incentives and comparatively focused pipelines.

Strategy 2: Client management synergy

For businesses with an overlapping client base across multiple divisions or (acquired) OpCos, this is typically the next step-up. Actively managing clients across organisational and product boundaries.

In terms of potential, it can have much higher revenue impact than cross-selling; delivering larger and broader key accounts that are arguably stronger and ‘stickier’. Implementation-wise, it is unsurprisingly more complex and far-reaching; going deep into specific accounts and crossing organisation boundaries.

Openness, co-operation and information sharing are essential. Often achieved one client at a time, through light-touch client account planning and management. Building ‘community’, trust and often a culture shift that requires and relies on an effective alignment of objectives, incentives and KPIs at OpCo and individual levels. 

Strategy 3: Proposition synergy

For businesses with complementary products, this integrates offerings across organisational boundaries. It can be one-off for specific clients or systematic and repeatable; and can range from adding-on a newly-acquired niche product to a core offering to boost its competitiveness to, at the other end of the spectrum, a ‘match of equals’.

Making it happen

In practice, businesses tend to mix and match bespoke combinations – starting where there is low-hanging opportunity and organisational ‘will’ and enthusiastic stakeholders. 

Successful ‘cross-OpCo organisations’ display a number of common traits and pursue a number of familiar themes:

  • Aggressively and single-mindedly build group-wide community as an overlay to business-as-usual; nudging the community to take responsibility and be accountable
  • Allow the strategies to intermingle and actively evolve
  • Take a semi-structured approach to client management and triggering opportunities, allowing ‘structured serendipity’ to flourish
  • Drive a highly visible pipeline of activity and up-rate commercial excellence programmes to accommodate and encourage cross-unit activity
  • Deploy an in-house broker to catalyse and facilitate – at least at the outset.

Four potential next steps

Successful strategies are typically mobilised through an overlay to business-as-usual, being a balancing act between independence and accountability on the one hand and an added element of cross-OpCo connection on the other. Successful paths are many and varied, bespoke and situation-specific. Useful lessons from experience include:

  1. Assemble a community as early as you can
    Start small and expand. Focus on information sharing and relationship building. ‘Quick and dirty’ and light-touch works: signal intention clearly and make it clear this is on the top-table agenda. Find ‘excuses’ to get a cross-unit community together to share information and network, have just enough strategy to be credible, and demonstrate top-down, active and interested sponsorship. Mobilised right, the community will fill in the blanks, develop the strategy and kickstart it. I’ve used a project team, focus groups and networking events at different times and in different ways to generate and marshal enough conversations to build momentum.
  2. Nudge the community to take accountability
    Measure activity and outcome, use pipelines, visibly and loudly celebrate success, and remember that imitation is the sincerest form of flattery. Be clear that progress is expected, but allow ambiguity around how that progress is achieved. Put cross-group reporting on the top-table agenda and, at the right time, create a cross-group growth committee. Track everything back to a pipeline that is ‘sortable’ around person, group, proposition and client; make that pipeline highly visible, at least in the early days, and consider reporting account-focused pipeline development up to board level. It works when the network or the community sees value in it
  3. Nurture, catalyse and navigate – actively pursue ‘structured serendipity’
    The biggest and best opportunities have always come from connecting people rather than from rigorous strategies. Instil enough ‘prompts’ to trigger connections, create the environment to allow opportunity to flourish, light the touchpaper, and unblock and mobilise as needed. With the right people involved, and in the right environment, interaction will trigger opportunity. Asking teams (often of two or three people) to develop a loose strategy around (say) 10 clients, or around a possible proposition overlap, can be more than enough (“what do we do now, what can I do for you, what can you do for me, what can we do together that we couldn’t do before?”). That cross-group client management discussion quickly veers into sharing client intelligence around strategy and challenges, which in turn morphs into a discussion around a cross-group proposition. There’s a big chunk of luck (or serendipity) in what comes to the fore, and some structure needed to create that luck. Light-touch account planning around a handful of accounts works. Opportunity naturally emerges.
  4. Deploy an internal broker
    Driving whole-greater-than-the-sum-of-the-parts revenue is a complex ‘matrix task’ that relies on skilled stakeholder management and organisational alignment. An internal broker – someone seen to be complementing and supporting management and leadership – makes it happen. These are the qualities they require:
  • Sufficiently independent to work across borders and appropriately senior and experienced to earn trust at ExCo level and multiple business-development levels
  • Sufficiently knowledgeable and value-adding to win the ear of stakeholders across the business on matters that are not always core to that unit’s scorecard
  • Visibly able to problem solve and unblock the unforeseen, particularly at the pilot and precedent stages, and able to mobilise solutions to revenue and resource allocation (for example), and to align metrics and incentives.

The change we are seeing as a result of macroeconomic factors is significant – but so is the opportunity. In sharp focus for new M&A and relevant to existing ‘portfolio’ businesses. Capitalising on it requires a multi-stakeholder and light-touch approach. For some organisations, these are ‘old-hat’, for others new skills.

Elias Mazzawi is a former senior executive at multinationals and mid-size organisations internationally, and a consultant at a leading global strategy house. Elias is a consultant at 4H2D-Ltd.



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