How to Use M&A for Business Growth

Here’s the deal: traditional M&A processes are reactive, inefficient, and often set buyers up for failure. 𝐁𝐮𝐲𝐞𝐫-𝐋𝐞𝐝 𝐌&𝐀 flips the script with a five-pillar framework designed to put buyers in control and deliver long-term value.⁣⁣ ⁣⁣ Let’s start with the first pillar: 𝐍𝐞𝐯𝐞𝐫 𝐌&𝐀 𝐨𝐧 𝐈𝐦𝐩𝐮𝐥𝐬𝐞.⁣⁣ Deals fail when buyers jump in without a plan. A winning strategy begins with clear goals and a proactive approach. Don’t sit back and wait for opportunities—identify and target companies that align with your vision and objectives.⁣⁣ ⁣⁣ Here’s a truth we all know: 𝐛𝐮𝐲𝐢𝐧𝐠 𝐢𝐧 𝐚𝐧 𝐚𝐮𝐜𝐭𝐢𝐨𝐧 𝐩𝐫𝐨𝐜𝐞𝐬𝐬 𝐬𝐮𝐜𝐤𝐬. The real winners in M&A are the ones who’ve established relationships early, often securing deals—even with lower bids. Engaging early puts you in the driver’s seat. You define the vision, evaluate cultural fit, and build an integration thesis—all before signing the LOI.⁣⁣ This is about intentionality. Ask yourself:⁣⁣ ✔️ Why are we buying this company?⁣⁣ ✔️What does success look like post-close?⁣⁣ ✔️Are they bringing unique capabilities or customer value?⁣⁣ ✔️How will cultures align, and what will it take to integrate effectively?⁣⁣ This isn’t about closing the deal—it’s about making it successful. It’s about creating a roadmap for what the combined company will look like and ensuring every decision aligns with long-term value creation.⁣⁣ How is your team taking a 𝐁𝐮𝐲𝐞𝐫-𝐋𝐞𝐝 𝐌&𝐀 𝐚𝐩𝐩𝐫𝐨𝐚𝐜𝐡 to sourcing and executing deals? 

I've led 17 M&A integrations. Here are the 5 critical lessons I've learned: 1. 𝐋𝐞𝐚𝐝𝐞𝐫𝐬𝐡𝐢𝐩 𝐚𝐭 𝐭𝐡𝐞 𝐓𝐨𝐩 𝐑𝐞𝐪𝐮𝐢𝐫𝐞𝐬 𝐚 𝐃𝐢𝐟𝐟𝐞𝐫𝐞𝐧𝐭 𝐌𝐢𝐧𝐝𝐬𝐞𝐭 Traditional leadership development fails during integration. Why? Because uncertainty demands a different kind of leader. Through these integrations, I learned to identify leaders who: • Thrive in ambiguity • Adapt their style instantly • Read situations before they escalate • Drive change without losing people 2. 𝐋𝐢𝐬𝐭𝐞𝐧 𝐚𝐧𝐝 𝐋𝐞𝐚𝐫𝐧 𝐁𝐞𝐲𝐨𝐧𝐝 𝐭𝐡𝐞 𝐍𝐮𝐦𝐛𝐞𝐫𝐬 The true value isn't just in products and revenue. Some of the best discoveries can come from understanding what made the acquired company exceptional in their: • Human resource strategies • Cultural dynamics • Inclusion practices These are often the hidden gems that should reshape the acquiring company, not just the other way around. 3. 𝐈𝐧𝐭𝐞𝐠𝐫𝐚𝐭𝐞 𝐰𝐢𝐭𝐡 𝐇𝐞𝐚𝐫𝐭 𝐚𝐧𝐝 𝐌𝐢𝐧𝐝 Success isn't just about systems integration. It's about: • Seeing the faces behind the spreadsheets • Understanding transferable skills • Creating meaningful roles that honor expertise • Walking in their shoes through the transition 4. 𝐁𝐞 𝐚 𝐒𝐭𝐫𝐚𝐭𝐞𝐠𝐢𝐜 𝐏𝐚𝐫𝐭𝐧𝐞𝐫 𝐭𝐨 𝐋𝐞𝐚𝐝𝐞𝐫𝐬𝐡𝐢𝐩 I've watched great managers crumble during integration. And seen unexpected leaders emerge from the chaos. Here’s what differentiates: • Challenge assumptions constructively with market intelligence • Balance short-term wins with long-term strategic goals • Support decision-making with clear risk/benefit analysis • Act as a bridge between acquired and acquiring leadership teams 5. 𝐋𝐢𝐦𝐢𝐭 𝐁𝐮𝐬𝐢𝐧𝐞𝐬𝐬 𝐃𝐢𝐬𝐫𝐮𝐩𝐭𝐢𝐨𝐧 While integration is complex, maintaining business momentum is critical. Focus on: • Preserving customer relationships • Maintaining operational excellence • Protecting revenue streams • Keeping top talent engaged Through these integrations, I've learned that success isn't written in manuals. It's carved out in moments of uncertainty. The best strategies emerge when we dare to look beyond traditional playbooks. And see the full picture: products, people, and possibilities. 👉 To my fellow Corporate Development and M&A experts: What crucial lessons would you add from your integration experiences? Share them below so we can keep learning from each other.

Positioning for M&A isn’t transactional - it’s simply good business. Too many founders and boards treat M&A as an afterthought, a capitulation, or a means to a recently prioritized end. This reactive mindset is exactly what makes M&A hard- and why outcomes are often mediocre. But beyond that, positioning yourself for M&A early on is simply good business, regardless of whether or not you intend to sell. Think of it as earning buy-in from those with the power to shape your industry, not just your exit. Building trusted relationships, evangelizing your story, and gathering intel on incumbents and competitors are table stakes for top-decile CEOs. This strategic posture generates opportunity, goodwill, and momentum. Generating buy-in, especially when it results in being acquired for the value of your vision, not just your assets, requires strategic, not transactional, thinking. Here’s what that looks like: → You’re positioned early, not scrambling late. Engage when you hit the Traction Phase (I gave up on the Series letters a while ago). When your tech is de-risked and there’s early commercial validation, that’s the moment to start building trusted relationships. It takes years-and it compounds. → You’re wearing the CEO hat, not just the founder one. Founders are often emotional and insular about their business (a strength-until it’s not). A strong CEO brings emotional detachment and navigates M&A nuance. Let your sales warriors battle in the arena while you sharpen your diplomacy and connect with incumbents- even competitors. These ties often yield intel, partnerships, and other unexpected upside. → You’re doing BD yourself, not outsourcing. You can hire a BD lead (I once was that guy- story for another time), but you can’t outsource relationship gravity. Leaders want to deal with leaders. Understand your potential partner’s vision. Empathize. Seek alignment. That level of connection is reserved for expert CEOs. → You’re selling stories, not assets. Assets get asset pricing. Story and vision yield equity valuations. Work with investors and advisors who know how to shape narrative. Think Stradivarius, not violin. Or as Hany loves to say, sushi, not cold dead fish. → You’re building, not burning bridges. Arrogance in the ecosystem closes doors - often before you even know they exist - and invites schadenfreude. Humility and real relationship-building pay dividends. Karma’s a b*tch. Accomplishing this “bought” posture takes maturity and perspective. It means being real, staying curious, and stepping outside your comfort zone. Done right, and with the right warm intros, it’s both natural and rewarding. Helping my portfolio founders get there is one of the most gratifying parts of my job. Companies are bought, not sold. Great CEOs are magnets, not merchants. Connectedness and respect breed opportunity and optionality. Play the long game.

I've found a strategy so impressive that I had to share it with my fellow MSP founders. 👇 By focusing on strategic acquisitions and enhancing customer loyalty, you can unlock a world of impressive growth potential. Here’s how to do it: *Identify Complementary Service Providers* - *Research Potential Acquisitions:* Find companies offering services like cybersecurity or cloud solutions. - *Evaluate Synergy:* Ensure their services integrate well with yours. *Strategic Acquisition* - *Conduct Due Diligence:* Check the company’s financial health and client base. - *Negotiate Terms:* Secure favorable acquisition terms. *Integrate Services Seamlessly* - *Unified Service Offering:* Develop a cohesive service package. - *Staff Training:* Train your team to deliver new services. *Increase Customer Stickiness* - *Offer Bundled Services:* Create bundles to encourage multiple service purchases. - *Loyalty Programs:* Reward long-term engagement. *Enhance Customer Relationships* - *Regular Check-ins:* Meet regularly with clients to understand their needs. - *Proactive Support:* Anticipate and address client needs early. *Market the New Value Proposition* - *Update Marketing Materials:* Reflect expanded offerings in all materials. - *Client Education:* Inform clients about the benefits of new services. *Monitor and Improve Service Quality* - *Client Feedback:* Collect feedback to ensure satisfaction. - *Quality Assurance:* Maintain high service standards. If you are curious about what your peers are doing and how to strategically outperform them in all of the 8 business areas (I.e. marketing, capital, service, and delivery plus 5 more), check out the MSP Business Evaluator and Accelerator https://lnkm.io/feXwO

Hard truth, most M&As fail. Yet, I have seen others succeed. The number one reason I have had clients succeed is that they prioritize people and culture. Significant research has been done on this issue, and here is a list of the top 10 reasons mergers and acquisitions fail: 1. They overpay for acquisitions. 2. Poor due diligence tanks the deal. 3. Cultural clashes destroy value. 4. Synergies never materialize. 5. Strategic rationale is weak. 6. Post-merger integration fails. 7. Human factors get ignored. 8. Communication breaks down. 9. Regulatory issues create friction. 10. Top talent walks away. But here's your playbook for success: 1. Strategic Planning & Execution ↳ Do thorough due diligence, set clear objectives, and build comprehensive integration plans. 2. Vision, Mission & Values ↳ Map the landscape of both organizations. ↳ Create an inspiring unified vision. ↳ Craft a compelling mission. ↳ Set shared values that guide decisions. ↳ Build a strategy that maximizes strengths. 3. Market Analysis ↳ Study the industry, customers, competition, and opportunities deeply. 4. Communication Strategy ↳ Build a clear plan to keep all stakeholders aligned and informed. 5. Integration Planning ↳ Form a dedicated team, create detailed plans, and tackle cultural issues head-on. 6. Talent Strategy ↳ Review org structures. ↳ Map roles clearly. ↳ Set selection criteria. ↳ Plan transitions carefully. ↳ Keep key players engaged. 7. Leadership Assessment ↳ Start during due diligence. ↳ Use data to drive decisions. ↳ Focus on team dynamics. ↳ Move decisively on key roles. Follow this framework, and you'll dramatically increase your odds of M&A success. The key? A systematic approach. Focus on clear communication, thorough planning, and smart talent management. Tell me, what was your strategy for a successful M&A? — P.S. Unlock 20 years' worth of leadership lessons sent straight to your inbox. Every Wednesday, I share exclusive insights and actionable tips on my newsletter. (Link in my bio to sign up). Remember, leaders succeed together.