Despite all the studies and articles regarding M&A activity eroding shareholder value, the reality is that companies are improving their M&A planning and execution. M&A activity is as old as dirt and dates back to the early years of the Industrial Age. Andrew Carnegie reportedly scribbled a number on a napkin while playing golf that was later accepted by J.P. Morgan and created one of the more visible mergers of that time thus forming U.S. Steel. Of course, thanks to Hart Scott Rodino, senator Paul Sarbanes and representative Michael Oxley, and many regulatory organizations such as the SEC and the European Union, you can no longer do a deal on a napkin. And luckily M&A executives moved from napkins to banker-boxes and in the past few decades with the advent of the personal computer and spreadsheet software, dealmakers have gotten much more organized and methodical in their due diligence and post acquisition integration. Still most of the advances and regulations are less than a decade old. But thanks to more advanced processes and systematic procedures, world class acquirers are narrowing the gap of M&A failure.

My last blog entry discussed the Conference Board event I attended in NYC in April. In numerous conversations I had with M&A executives at that event many echoed that they had made vast improvements in their processes and procedures and they are finding less and less failure within their own M&A activity. I’m not sure AOL Time Warner got that memo and Robert Bruner’s book, Deals from Hell, points out many other failures, nevertheless many corporations have taken, or are taking, measures to streamline their M&A efforts and eliminate costly mistakes – the kind of mistakes that cause customer and employee attrition subsequently eroding shareholder value.

M&A professionals at Cisco have refined their playbooks to precision. Graham Wood, head of M&A at Cisco, will tell you that they’ve reduced the risk by instituting world-class playbooks and new systems that are optimized to help them execute more effectively. Additionally, Cisco is improving their processes with technology provided by Big Blue - IBM. David Holder of Baxter International is using technology from PowerSteering Software to help manage the more technical aspects of their M&A projects. And Mike Renard of Beckman Coulter is evaluating how to streamline their processes with the help of M&A consulting firm OnPoint Consulting. What all these companies have in common is that they have moderate to active M&A activity, and they are instituting tools to help them execute flawlessly. After all world-class playbooks and executing flawlessly is what will ultimately reduce deal risk, speed execution time, decrease cost and costly mistakes, and ultimately drive deal value.

At the risk of self-promotion, TX2’s clients also share a similar distinction. They are striving for excellence with their M&A strategies and that is why they were adopters of technology like ours and those technologies mentioned above. More and more companies are adopting similar best practices, instituting deal dashboards that help monitor progress in real-time and retain corporate memory. Companies are striving to reduce deal failure that includes evaluating and redefining current processes, creating world-class playbooks and instituting technologies when and where necessary. The last thing you want to happen after the deal close is to cause customer and/or employee attrition and erode deal value. Therefore, speed and execution excellence is of the utmost importance.