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Acquiring companies can be extremely rewarding if done right. To be proficient in M&A, a dedicated function must be established for continuous improvement. As the M&A function evolves, it increases the chances of deal success and value creation. In this article, David Hindley, VP of Corp Dev at Autodesk, shares his journey on how he evolved an M&A function from scratch.
“In the beginning, it’s all about doing the bare minimum and keeping the lights on. Then over time, you have to evolve it to do better. It’s easier to recognize the needs, but a lot harder to build the support, teams, and capacity.” – David Hindley
David started out his career as an investment banker and joined Autodesk as an associate when they were starting a corporate development function. Through the years, David has witnessed the evolution of M&A functions within the organization and is now leading the entire group.
Phase 1 - Leading Through Indirect Authority
In the beginning, when everything is very informal, the biggest challenge for corporate development is to receive help with acquisitions from employees when it’s not part of their day job.
One of the biggest roles of corporate development is to establish internal relationships with functional leads. Corporate development must learn how to best interact with each person and approach them with vulnerability and empathy. Tell them that their help is needed for the good of the company, understand their issues or concerns, and help them get their job done if possible.
Phase 2 - Building Out the Integration Function
After learning how to get deals done, corporate development must focus on building an integration practice. At first, integration is all about keeping the lights on. But over time, it must evolve and improve to preserve the value of the acquired company. Improving integration involves creating playbooks to make every process official, and building out a team. Playbooks must be something that everyone can see and understand.
Phase 3 - Amplify/Expand Strategic Views
It’s time to maximize the M&A functions and be more proactive in the strategy rather than taking orders on what to buy from top executives. Forming a strategy or amplifying the vision of the CEO is a huge part of the corporate development role.
Start by talking to startups, investors, bankers, customers, or even competitors. It’s all about gathering different perspectives on the problems that the company could solve with an expansion or an acquisition.
The strategy must be extremely simple and easy to understand for the board of directors and top executive management. If they can’t understand it, it’s useless.
Phase 4 - Improving the Integration Process
When deal execution and the strategy are already in place, everyone must now focus on continuous improvement of the integration function. This is where value is created.
To improve the integration team, get them involved during the whole deal process. This makes the deal more likely to succeed. At first, the deal team does more work, but as the deal goes on, the integration team takes on more tasks until they're in charge. This helps everything run smoothly.
David also does post-mortems to continuously improve their process. This helps them understand what they did wrong and what they could do better for future deals.
Speeding up the Evolution for Efficiency
To speed up the evolution of M&A functions for efficiency, help the executives understand the importance of the acquisitions and get their buy-in. Deals move a lot faster with great leadership.
Also, establish functional leads quickly. Having the right experts accountable during deals will help achieve repeatability and scale. Ensure everything is properly documented to increase consistency and understanding across different teams.