The M&A blueprint prompts business leaders to conduct a thorough self-assessment along with a comprehensive market assessment.Īs this example illustrates, success in programmatic M&A requires much more than just executing on a long string of deals. The result? The organization ended up wasting time and resources on deals that were mostly unsuccessful, and its executives unintentionally created an unwieldy portfolio of businesses. But the team did not have a clear plan for creating value from these targets nor for integrating them into the current business structure. Propelled by a healthy dose of FOMO (or fear of missing out) but lacking a clear set of priorities, the M&A team made multiple small bets on a range of businesses-even on some unexpected targets in adjacent markets (such as pet grooming). All had their own agendas (see sidebar, “Undue influences”). Other business-unit leaders saw potential in the markets for organic products and men’s grooming. Some senior leaders proposed expansion in greater China, the fastest-growing market for premium cosmetics. The CEO was pushing for a big bet on digital given the company’s superior financial position. Without an M&A blueprint to provide an incontrovertible fact base and action plan, the cosmetics company’s efforts to implement programmatic deal making turned into a quixotic, time-wasting effort. In his 1966 book The Psychology of Science (HarperCollins), psychologist Abraham Maslow stated, “I suppose it is tempting, if the only tool you have is a hammer, to treat everything as if it were a nail.” This is the approach the cosmetics company favored-establishing a well-organized M&A team but then using it to drive almost all growth rather than applying it only to those opportunities best suited to be bought, not built. It was swayed by deals sourced by third parties, and it ended up inventing growth strategies around possible, exciting targets without a clear understanding of how they could generate value. The M&A team at the cosmetics company, for instance, was reactive. Companies that continually chase down the next new thing run the risk of pursuing initiatives in the wrong order, skipping foundational tasks, or duplicating efforts and investments. The shiny-object syndrome-also known as extreme distraction. Send us feedback about these examples.The hypothetical case of the global cosmetics company points to two common cognitive biases that can emerge when any company attempts to pursue programmatic M&A: the shiny-object syndrome and Maslow’s hammer. These examples are programmatically compiled from various online sources to illustrate current usage of the word 'financial.' Any opinions expressed in the examples do not represent those of Merriam-Webster or its editors. Cora Lewis and Adriana Morga, Anchorage Daily News, 26 June 2023 See More Eric Griffith, PCMAG, 26 June 2023 That means tough decisions for many borrowers, especially those in already-difficult financial situations. Kevin Rector, Los Angeles Times, 27 June 2023 Finally, almost half turn to listeners for financial contributions. Olivia Evans, The Courier-Journal, 27 June 2023 Those caps do not apply to violent crimes such as robbery, rape or murder, to crimes for which specific probation periods are already spelled out in the law, or to certain theft or financial crimes. Time, 28 June 2023 After negotiating non-economic components of the contract, Teamsters and UPS have recently shifted to focus on negotiating pay, benefits and other financial elements. WSJ, 28 June 2023 Her father, Jit Singh, 71, a former officer in the Indian Air Force, provides her with considerable financial support, including the expenses of the court cases against Singh. Cara Tabachnick, CBS News, 28 June 2023 The chipmaker countered Wednesday by saying that global demand is so hot right now that any such new rules would not have a near-term financial impact. Evans, Fortune, 28 June 2023 In addition to these misleading practices, Publishers Clearing House hid shipping and handling costs from consumers until there was a financial obligation. Recent Examples on the Web Through classes and mentorship programs, the school side of the outfit works to teach its students financial literacy, nutrition, time management and entrepreneurship.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |