Many executives don’t always give enough pause and thought to the foundational aspects of M&A. The focus is often on doing, not thinking. Of course, it’s natural to get excited about an acquisition, but before you jump into the action, take a step back and think about the “why” of a deal.
- Why are you interested in acquisition? – This is your strategic rationale.
- What benefit can you get from an acquisition that you can’t get otherwise?
Grounding questions are necessary, especially in an environment where the world is changing fast and customers are demanding more services, capabilities and cutting-edge technology. There are a million possibilities for growing your company, but realistically, you’ll need to focus on just one in order to make progress. Answering these questions provide guidance and helps you develop a strategic plan.
Acquiring for the sake of acquiring is rarely, if ever, beneficial; so, spend some time answering these questions with your leadership team. When you begin pursuing an acquisition you’ll be glad you took the time to reflect on these essential questions.