The statistics point to a fact that must be taken into account when talking about large acquisitions. Seventy percent fail.
On the other hand the current picture of the global market is that it has been virtually impossible to build a top-notch company just through organic growth.
One question then becomes: What do successful negotiators do differently?
Doing business has a very broad spectrum of activities that result in a combination of tools.
There are many types of business, mergers, business acquisitions, asset acquisitions, technology transfer, among others, that combined or isolated can generate strategic growth of a business.
Of course, these types of
business have different
meanings, for the
shareholder, for the
controller, for the lawyers,
for the investment banker,
and for other specialized
professionals.
For executives faced with
this challenge, it means
taking many decisions when
starting or completing a
transaction.
It is a generally challenging walk that is characterized by many unforeseen and, in many cases, fraught with managerial mishaps.
There are many recipes for a transaction to work out, but which one will be the best?
Of course there is a more
technical view of a business
transaction process such as
evaluating a business, but
our approach is more on key
decisions and how to do them
right.
From the point of view of
that family business, for
example, that will "sell"
your business, you must
remember that most likely
you have never had this
experience before, and you
feel insecure.
After all, they have built a business for years, and logically beyond doubt whether or not to sell their business, whether or not it is time to do so, they are faced with a situation technically totally different from the one they know of their own business.
Most executives and shareholders believe they are good decision makers. Now, they have reached the highest rungs of the corporate scale, or entrepreneurs, for having a strong track record. A history of making wise decisions.
But when it comes to making decisions about transactions, it turns out that patterns change. For many executives, conducting transactions turns out to be much different than touching the company on a day-to-day basis. Performing a transaction can quickly get an executive out of your comfort zone.
The mechanics of a merger, for example, may require, and generally require, a new type of competence. In addition, shareholders do not always have convergent opinions about the sale, or not of the business.
Think for a moment about the innumerable factors in a merger environment that are different from day-to-day activities. First, of course, there is the intense involvement of outsiders (bankers, lawyers, consultants) many of whom are unfamiliar with the organization.
Making a transaction is often complicated by the risk that these people are working for their own interests.