Embracing Change, Focusing on Delivery

I hope that all ACG readers look forward to receiving this publication each month. With the multitude of choices to make and various other demands on your time, we know it’s imperative to deliver content that compels and rewards your readership. One goal has been to use the final page of the magazine for an ACG Personal Journal opinion piece by a member who conveys what ACG has meant to his or her career and shares secrets of success. We hope you have found these expose’s interesting, and we encourage you to submit one to our editor. One purpose for requesting your participation and feedback is our hope that ACG and this magazine continue to be a means to enhance your skills. I am convinced that people who excel in M&A and corporate growth share many traits. First, these people confront reality. They understand that all products become commodities. The media may profile the relentless price declines in flat screens or memory, but there are others, like automotive suppliers, who also appreciate the pressure to adjust to the demands of their customers. China, India and other countries share some significant cost advantages in many industries and further have the enviable certainty of demand for products for years ahead because of the size and needs of their populations. While still a political issue, manufacturers and service providers alike need to accept that overseas sourcing today is similar to how the states competed 10 years ago by offering incentives for locating important plants in their communities. Successful businesses are setting explicit targets for margin, revenue growth and return on invested capital, and they are exiting products and lines that don’t meet their criteria. Successful dealmakers and growth executives also anticipate the next business model. Tech guru Tim O’Reilly has commented that in the Web 1.0, the user was consuming content created by someone else. In Web 2.0, the content is created by the user. 1.0 is an “architecture of consumption” and “read only”; the Web 2.0 is “architecture of participation.” Google, eBay, Dell, and others are creating and changing their business models and leaving it up to their suppliers and partners to align with the next iteration. The great dealmakers also apply the lessons they’ve learned to the business purchases under consideration or to the improved performance of their portfolio companies. Acquiring talent is a key driver of many acquisitions, and retaining and growing talent are imperatives for all firms today. Revenue growth comes through product innovation, solutions-selling, and focus on the right priorities — outcomes that require the best and the brightest minds at work. A related issue affecting many companies is connecting with an evolving talent pool. Unilever is launching a new deodorant with the message, “For risk-takers…it’s the scent of telling your boss he has not had an original idea since the late 80s.” This is not exactly a slogan designed to attract seekers of the status quo or those reluctant to change employers when the environment gets stale. Dealmaking also requires energy and enthusiasm. Dealmaking is about understanding what keeps the parties apart and finding a way to bring them together if it makes strategic sense. Successful corporate growth also requires selecting three or four key priorities and focusing relentlessly on execution until they are accomplished. ACG has reached a similar juncture. You have been helpful in offering suggestions, and we’ve taken your input and set strategic initiatives. Now we have to execute and deliver on the targets we together have set. Your involvement will improve our standings as we proceed: Consider now how you can contribute to your chapter and ACG to make ACG as a whole better and more worthwhile. I’m also hoping that this article will get you thinking about good dealmakers and corporate growth professionals you know to ask to become a part of this influential organization. Have a great month. Peter L. Coffey ACG President Partner, Michael Best & Friedrich [email protected] (c) 2005 Mergers and Acquisitions Journal and SourceMedia, Inc. All Rights Reserved. http://www.majournal.com http://www.sourcemedia.com