Page 74 - HBR Leader's Handbook: Make an Impact, Inspire Your Organization, and Get to the Next Level

64 HBR Leader’s Handbook

If a full-blown external acquisition is indeed the best answer for your
new strategy, reach out early for the appropriate advice and support you
need from your own leadership and relevant external experts. You can
get ready for those discussions with some additional preparation:

1. Consider how a potential acquisition would directly enhance your
specific strategy. Remember that acquisitions are only a tool to
support a strategy, not a strategy itself. Know also that different
kinds of strategies will be served by different kinds of acquisitions
(e.g., depending on whether you are doing product extensions ver-
sus whole-scale reinvention of your business model; see the HBR
article “The New M&A Playbook,” by Clayton Christensen et al.).
2. Face the fact that acquisitions are almost always more compli-
cated and uncertain than they might seem at first; research shows
that some 70 percent fail or fall short of expectations. Are you
ready to handle the potential financial and reputational risk you
and your company may be taking on if you move ahead?

3. Take advantage of some advance what-if scenario analysis to
understand how viable your potential acquisition can really be.
Ron has laid out a framework for smart “backward planning” in
his HBR article “Are You Really Ready for an Acquisition?” He sug-
gests creating a high-level picture of what the combined company
or merger would look like after a year of integration (financing but
also organizational structure, processes, culture, staffing, etc.)
and then back-solving what it would take to get there, including
resources and time (investment, teams, processes), governance
and oversight, essential skills, and so on.

rates, and so on—of a new retail product at the heart of a transformed
consumer strategy.
The PBS children’s channel focused on a strategy of “where” that
would target children and parents (especially mothers) in member station