M&A deals are normally run like football team without a coach. Each specialist has a particular skill set, but each specialist is not positioned to understand how his or her activities relate to the ultimate deal success (value creation). Companies need to take an integrated view of the entire deal cycle. For example, M&A strategy decisions should be informed by integration experience (when things go wrong) so that the strategy assumptions have real-world validation, and can avoid sending a company down an unnecessarily difficult road.
Companies need to implement a new role into every deal: the deal manager. This is not project management. A deal manager has to be an M&A subject matter expert and a leader. The deal manager is more like a coach, conduct or CEO, because they need to have a vision for where the deal is heading, and need to lead the deal efforts.
Below are 5 keys deal management duties in a M&A transaction:
- Big Picture View: Throughout the deal, the deal manager must maintain a big picture view of the deal and what it takes to make the deal successful. There are many handoffs between the teams and services providers (bankers, lawyers, due diligence teams, integration, management, etc.). The deal manager needs to understand how all these tasks interrelate and intervene when necessary to keep the deal on track.
- Subject Matter Expertise: The deal management requires subject matter expertise across the deal lifecycle, not just in one or two areas. Just knowing strategy and M&A advisory is insufficient, or just know integration is insufficient. A deal manager needs to understand every role in a deal so that they can proactively monitor progress and intervene if someone is falling off the rails.
- Feedback and Coaching: With subject matter expertise, the deal manager must provide substantive feedback to the stakeholders and coaching where the team members could use assistance. There will always be someone new to the team or lacking M&A experience. When this occurs, the deal manager must recognize this and provide coaching to the new members.
- Collective Wisdom: As the deal transitions through the different stages, the deal manager must retain the collective wisdom learned in each deal stage and disseminates this information to other teams. If the sales team looks weak during the due diligence phase, the deal manager must ensure that the sales team is supported after integration and must set up specific KPI(s) to track their progress. With most companies, these learnings from diligence was lost in the handoffs and are never tracked, even though it was a known problem.
- Deal Process: Finally, the deal manager must ensure that each step in the M&A process is completed and sufficient attention has been given to the relevant issues. This is the classic project management aspect and is an essential role in M&A. However, without the other 4 roles above, project management is a net negative to make a deal successful.
Once companies adopt the deal manager role, they will wonder how they ever lived without this role. The deal manager will lead to value creation in M&A and to making deals successful.