When executed effectively, mergers and acquisitions serve as powerful growth accelerants for businesses. Yet too many organisations continue to approach M&A as occasional transactions rather than developing it as a core capability. This traditional approach not only limits potential growth but often leads to disappointing outcomes and wasted resources.
After working with technology companies across countless deals, we've observed a clear pattern: companies that build systematic M&A capabilities consistently outperform those that treat acquisitions as isolated events. The evidence is compelling – organisations that develop an "M&A mindset" transform their growth trajectory while others struggle with
integration challenges and unrealised value.
The Transformation to an M&A Mindset
The fundamental difference between companies that occasionally pursue acquisitions and those that excel at M&A lies in their mindset. Many of our clients have successfully transformed from completing one deal every two years to acquiring 2-4 targets annually (some even more). This shift doesn't happen by accident – it requires deliberate capability building.
An M&A mindset fundamentally changes how the entire organisation thinks about growth. In these companies, everyone understands that acquisitions will be ongoing and regular. This awareness creates two critical advantages: first, team members can contribute meaningfully when called upon, and second, they proactively factor potential M&A activity into their planning, anticipating that business-as-usual may be periodically disrupted by acquisition work.
Once this shift occurs, it becomes normalised within the organisation's culture. No longer are acquisitions seen as extraordinary events that throw the company into chaos – they become an expected part of how the business grows and evolves.
The Hidden Costs of the Deal-by-Deal Approach
Companies that approach M&A on a deal-by-deal basis typically overlook crucial capacity requirements. Acquisitions demand substantial work from those involved, and it's unreasonable to expect employees to effectively manage their day-to-day responsibilities while simultaneously supporting M&A activities.
What typically happens? Work gets outsourced to third parties – often reactively and without proper planning. This reactive approach leads to higher costs, inconsistent processes, and loss of institutional knowledge that could inform future deals.
Even more concerning is how the deal-by-deal mindset affects integration planning. Firms without regular M&A experience tend to postpone thinking about integration until after the deal closes – which is far too late. Effective integration planning should begin at the investment planning stage, mapping out all possible scenarios and outcomes well before any agreements are signed.
This planning gap represents one of the most significant hidden costs of the occasional approach to M&A. Without early and comprehensive integration planning, companies find themselves scrambling to make critical decisions under pressure, often resulting in suboptimal outcomes and unnecessary value destruction.
Integration: More Than Just Combining Operations
Integration is fundamentally about weaving the acquired business seamlessly into the acquirer's operations. While some companies choose to leave acquisitions unintegrated, this approach unless well managed rarely delivers sustainable value, particularly for organisations pursuing regular acquisitions.
Effective integration planning addresses several critical elements. First, it defines the target operating model post-deal – how the combined entity will function operationally. Second, it clearly articulates deal outcomes and how they will be realised, including both cost and revenue synergies. Third, it identifies skills gaps that need addressing. And finally, it thoughtfully assesses cultural aspects of the combination.
In our experience, the most successful ones feature bidirectional cultural exchange. The acquired company learns new approaches and processes, but crucially, it's not just the target firm that changes. The acquiring company must remain open to learning from the acquired business's strengths and incorporating those elements into the broader business.
Preserving the "Secret Sauce"
Target companies typically possess some unique element – what we call their "secret sauce" – that makes them successful and valuable acquisition candidates in the first place. Understanding and preserving this essence is critical to realising the full value of the deal.
Too often, acquiring companies inadvertently destroy value by imposing their culture, processes, and systems wholesale on the acquired business without taking time to understand what made it successful. By doing so, they risk losing the very attributes that made the acquisition attractive.
Companies with mature M&A capabilities recognise this risk and take deliberate steps to identify, preserve, and even leverage the unique strengths of acquired businesses. This requires humility and curiosity on the part of the acquiring company – qualities that are often in short supply during the excitement and pressure of deal-making.
Building M&A as a Core Capability
Developing M&A as a core capability requires ongoing learning and improvement. Each deal provides lessons – both positive and negative – that should inform future acquisitions. The trap many companies fall into is becoming complacent after a few successful deals, which can lead to overlooking critical details in subsequent transactions.
Building this capability means maintaining rigorous attention to the value drivers that make M&A successful and fostering a culture within teams that embraces the change that inevitably comes with acquisition strategies. It requires discipline to avoid replicating past mistakes and openness to continually refining your approach.
For technology executives specifically, this means balancing technical integration considerations with broader business objectives. It means investing in the necessary infrastructure – both human and technological – to support regular M&A activity while ensuring alignment with the company's overall growth strategy.
Why M&A Fails to Deliver Expected Value
Even companies that regularly pursue acquisitions can fail to realise expected value. Based on our experience, three primary factors account for most M&A disappointments:
First, poor deal rationale – acquiring businesses for the wrong reasons. This often happens when companies respond reactively to inbound M&A opportunities rather than proactively identifying targets that align with strategic objectives. Without a clear strategic rationale that links directly to company goals, acquisitions are unlikely to deliver meaningful value.
Second, inadequate post-acquisition management. Weak or nonexistent integration leads to value drain as either key staff depart or the original intent of the acquisition isn't pursued. This results in the acquired company essentially being "put on the shelf" – consuming resources without contributing meaningfully to growth or competitive advantage.
Third, leadership changes that disrupt continuity. When deal intent isn't properly communicated and ingrained throughout the acquiring company, leadership transitions create significant risk. If key members of the original deal team leave or senior management changes, institutional knowledge about the strategic rationale for the acquisition can be lost. This leaves people "scratching their heads" about why the business was acquired in the first place, making it nearly impossible to realise the intended value.
Ensuring Strategic Alignment
To avoid the pitfall of poor deal rationale, companies need rigorous processes that link acquisition candidates directly to corporate strategy. Every potential deal should fill a clearly identified value gap in the company's strategic plan.
This requires more than superficial alignment – it demands deep understanding of how the target company's capabilities, products, customer base, and culture will advance specific strategic priorities. The linkage should be explicit enough that anyone in the organisation can understand why the acquisition makes strategic sense.
When evaluating potential acquisitions, leaders should be able to articulate precisely how the deal will accelerate progress toward strategic objectives in ways that organic growth cannot. This clarity helps avoid opportunistic acquisitions that may seem attractive in isolation but don't meaningfully advance the company's strategic agenda.
Practical First Steps for C-Suite Leaders
For C-Suite leaders looking to establish M&A as a core capability within their organisations, we recommend four practical first steps:
Begin by developing a solid business strategy that clearly identifies the opportunities best served by M&A versus organic growth. This foundational work ensures that subsequent acquisition activity aligns with and advances strategic priorities rather than distracting from them.
Next, build a dedicated M&A team with the capacity and expertise to support ongoing acquisition activity. This team should include individuals with direct M&A experience who can bring proven practices and avoid common pitfalls. Importantly, this team needs dedicated capacity – they can't be expected to manage acquisitions on top of full-time operational responsibilities.
Third, make an M&A review (a review of both past and present deals) a standing feature in every executive and board meeting. This regular cadence ensures visibility into the pipeline of potential deals, progress on active acquisitions, and integration status and outcomes for completed transactions. It also signals the strategic importance of M&A to the broader organisation.
Finally, as deals progress from concept to execution, build out specialised teams to support specific aspects of the acquisition process. The most obvious initial requirements are in back-office functions like Finance, Legal, and HR. As the acquisition program matures, expand support to those responsible for managing the newly acquired capabilities and integrating them into existing operations.
Developing the Right Team Structure
When building an M&A team, the most critical ingredient is additional capacity – people who have the time and bandwidth to focus on acquisitions without sacrificing their primary responsibilities. Ideally, this team includes individuals with previous M&A experience who understand the complexities and challenges of the acquisition process.
The core team typically includes representatives from strategy, finance, legal, and operations, with subject matter experts brought in as needed for specific deals. This cross-functional approach ensures that all relevant perspectives are considered during target selection, due diligence, negotiation, and integration planning.
As the acquisition program grows, companies often develop specialised integration teams that focus exclusively on post-merger integration. These teams develop repeatable playbooks that capture lessons from previous acquisitions and apply them to future integrations, creating a virtuous cycle of continuous improvement.
Creating Your M&A Playbook
No company ever gets M&A completely right. Integration in particular rarely goes entirely according to plan. However, the lessons learned from frequent acquisitions allow organisations to create and refine playbooks that drive increasingly better outcomes over time.
These playbooks codify best practices, document lessons learned, and provide templates for critical activities across the acquisition lifecycle – from target identification and valuation through due diligence, negotiation, closing, and integration. They create institutional memory that persists even as individual team members change roles or leave the organisation.
The most effective playbooks balance structure with flexibility. They provide consistent frameworks while allowing adaptation to the unique characteristics of each deal. They also evolve continuously, incorporating new insights and refining approaches based on real-world experience.
The Communication Imperative
A key part of developing the M&A mindset is establishing dedicated communications capabilities. Effective acquisition programs include communications teams ready to engage with multiple stakeholders – employees of both companies, customers, partners, investors, and others – about the deal rationale, integration plans, and expected outcomes.
This communication isn't a one-time event announcing the deal; it's an ongoing dialogue that maintains alignment and builds confidence throughout the integration process. It addresses concerns, clarifies expectations, and reinforces the strategic rationale for the acquisition.
Without this dedicated communication capability, companies risk misalignment, uncertainty, and resistance that can undermine even the most strategically sound acquisition.
The Long-Term Competitive Advantage
Companies that successfully develop M&A as a core capability gain significant competitive advantages. They can respond more quickly to market opportunities, acquire capabilities more efficiently than they could build them internally, and integrate acquisitions more effectively to realise full value.
This capability becomes self-reinforcing over time. As the organisation completes more acquisitions, it develops increasing sophistication in target identification, valuation, due diligence, negotiation, and integration. This expertise makes each subsequent acquisition more likely to succeed, creating a virtuous cycle that compounds competitive advantage.
Moreover, companies with strong M&A capabilities often become preferred acquirers within their industries. Target companies recognise that being acquired by an organisation with mature M&A capabilities typically results in better outcomes for their employees, customers, and technologies. This preference can translate into earlier access to acquisition opportunities and occasionally more favorable transaction terms.
Moving Beyond the Transaction Mindset
The most important shift in developing M&A as a core capability is moving from a transaction mindset to a capability mindset. Rather than viewing acquisitions as discrete events with defined beginnings and endings, successful acquirers see them as ongoing processes integrated into how the company operates and grows.
This shift fundamentally changes how organisations approach acquisitions – from target identification through integration and beyond. It acknowledges that the work of realising value from acquisitions extends well beyond closing and requires sustained focus and resources.
For C-Suite leaders, this means transforming how they think about, resource, and govern M&A activities. It means investing in the people, processes, and technologies needed to support ongoing acquisition programs rather than assembling ad hoc teams for each new deal.
The evidence is clear: companies that make this shift consistently outperform those that continue to approach M&A as occasional transactions. They complete more deals, realise more value from each acquisition, and build sustainable competitive advantage through their acquisition capabilities.
The question for leaders is not whether to develop M&A as a core capability, but how quickly they can make the transition from occasional acquirer to systematic acquirer. In today's competitive environment, this capability is increasingly becoming table stakes for sustained growth and market leadership.
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