Robert Sher, a Forbes contributor and author of the book “The Feel of the Deal,” offers an extremely succinct set of questions for any senior executive considering an acquisition. They should be part of the CSEE (C-Suite Entrance Exam).
Writing in the Forbes Leadership Forum, Sher sets the stage by asking this simple question:
Why is M&A success such a crap shoot?
To which he answers thus:
The sad fact is that most deals look great on paper but few organizations pay proper attention to the integration process – that is, how the deal will actually work once all the paperwork is signed.
His five key questions address the following critical issues:
- Management capacity
- Cultural compatibility
- Alignment with corporate strategy
- Purchase price and integration investment
- Alternative uses of the invested capital