The Insider’s Guide to Innovation by M&A S12 Ep36

Is Innovation by Acquisition a Strategic Advantage?

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There is an explosion in companies who are securing innovation by M&A (mergers and acquisitions). In the last 36 months, 57% of M&A deals were based on innovation.

When companies find themselves behind the market, “innovating by acquisition” becomes a quick way to catch-up through the work of others. At the same time, if an orgnization is not careful, they can put their own R&D and innovation efforts at risk.

In this weeks show, I shared my experiences in managing innovation by M&A. Topics covered include:

  • Is innovation by M&A  the “easiest way” to catch-up?
  • Isn't this approach a way to hide a corporate culture where failure is not tolerated?
  • Are the M&A teams within an organization ready for this shift?
  • Do these teams need to change their tools, methods and decision criteria to be successful?
  • Does innovation by M&A have an impact on R&D/innovation activities within an organization?
  • How do competitors respond?
  • What are the six elements/steps to having a market leading innovation by M&A capability?
    • Define your M&A/Innovation strategy
    • Think through your options
    • Develop a new approach to deal evaluation that accommodates “innovation value
    • Negotiate and close the deal with innovation value in mind
    • Integration is harder than it sounds
    • Implementation doesn't stop on ‘Day 1'
  • What are the most effective strategies for innovation by acquisition?
    • Having a clear road-map
      • Clarity of objectives
      • Defined product road map that is flexible to accept innovations from accusation
      • Go-to-market that flexible to accommodate new innovations from the outside
    • Strategic Integration
      • Team retention and integrations with a strong consideration for culture
      • Aligning the innovation by acquisition with long term strategic visions
    • Ownership by sponsors
      • High degree of involvement by the deal sponsors can greatly improve the success of the deal

 

Additional Resources:

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