ECI recently hosted Duncan Painter, CEO of Ascential plc, for a webinar on preparing an effective M&A strategy. Before joining Ascential plc, Duncan was an executive at Sky plc, Global Product Leader at Experian plc, and Founder and Chief Executive Officer of ECI-backed consumer intelligence company ClarityBlue which was acquired by Experian in 2006. Throughout his career Duncan has seen the impact of M&A, including delivering 17 acquisitions and disposals since joining Ascential plc. Here are some of the key insights from the session:
1. If you’re making strategic acquisitions, be clear on the strategy
This may sound obvious, but this is where many M&A failures stem from. Whilst you may have agreed a clear strategy, often lines in the sand become distorted when faced with the available opportunities to buy. From a leadership point of view, you need to have real clarity and rigour so that when things come up opportunistically you can hold yourself to account on what you’re trying to achieve through the acquisition.
It’s also worth bearing in mind that business strategy is different to acquisition strategy. For example, you may want to acquire something in a different area of digital marketing, but that’s a business strategy not an acquisition strategy. A shopping list of what you would like to buy also isn’t an acquisition strategy. An acquisition strategy is about what the business you want to acquire will really bring to your business, how will it move your strategy forwards? Once you have that as something you won’t compromise on, the rest all falls into place much more easily.
2. Be customer-led
Most businesses understand the need to prioritise customer needs in their acquisition strategy, but it’s always surprising how few of them actually talk to their customers about their M&A plans. Ask them how they will feel about certain acquisitions and take on board their views as to their needs, to give yourself clearer visibility as to the benefits to your company.
One way of sticking to that, which we do at Ascential, is to design a jigsaw of customer needs, which will help you to work out what they are missing and what would they value. Map where the adjacencies overlap, and what related problems they’re trying to solve. The more specific you can go on understanding customer needs, including understanding what the problem is and why they might trust you to solve it, the more direction it will give you for your strategy.
3. Take time to get to know the CEO and business
M&A is always risky, but by taking the time to get to know the CEOs of the businesses, you can often avoid surprises down the road. At Ascential we try to spend two years getting to know the CEOs of acquisition targets, and that gives us the opportunity to really understand why they want to do it, and to get a good read as to their longer term plan beyond the acquisition. I can’t stress how important it is to make that an open dialogue – from CEO to CEO. These are good conversations to have, and build a strong foundation for post-acquisition, where both parties know each other’s priorities and are aligned on expectations.
