A longer-term perspective helps leading companies use M&A transactions to leapfrog performance.
Instead of folding a new entity into the status quo, company leaders build an intelligent enterprise, a dynamic organization that is built for agility, resiliency and growth. They focus on differentiated outcomes across the new combined company, spurred by the opportunity for innovation. The right blueprint focuses on long-term value, a mix of combined efficiencies and new capabilities that exceed what either company had prior to the merger or acquisition.
For example, one oilfield services company improved revenues and margin by more than 40% in the two years following the acquisition. How? Across the combined organization they took a bird’s eye view, changing:
- What work was done, eradicating duplication across the company to be more efficient.
- Who did the work, better utilizing ecosystem partners where it made sense.
- How the work was done, automating where it made sense to do so.
Predictive analytics can help companies during and after a deal because it makes it so much easier to balance short-term requirements with long-term actions. Through scenario modeling and data insights, they can get to value faster even in an environment that remains uncertain.
In addition, deals that bring more value in the long terms generally broaden and lengthen CFO involvement, capitalizing on financial expertise that can help guide actions from Day One. In addition to being involved pre-deal in pricing the transaction and developing synergy goals, CFOs should be accountable for post-merger value creation.