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Think finance is about to get more stressful – CFOs

Think finance is about to get more stressful – CFOs

Concerns about stress were widespread amongst executives in 13 countries, the survey suggests. In the UK, for example, 78% of CFOs predicted that finance jobs would get more demanding. The results were similar in countries such as Germany, Chile, and Singapore.

The vast majority of CFOs expect work for finance employees to become more stressful by 2020, according to a global survey Robert Half UK conducted with 1,800 respondents.

Despite the executives’ grim expectations, relatively few companies had taken action, according to Robert Half UK. Only 34% of respondents said that their departments regularly discussed health and wellness. About 53% allowed flexible work schedules, while 39% encouraged employees to give feedback to management.

Stress on the job is already prevalent amongst finance professionals. The looming deadlines, overlapping priorities, ever-recurring monthly close, quarterly financial statements, and tax time they face can even lead to sleeplessness, especially amongst younger employees.

5 TACTICS TO COUNTER STRESS

To counter the increase in stress, Robert Half suggests these tactics:

Take breaks. Short breaks can offer big health benefits. Set your alarm to force yourself to get up from your desk at regular intervals. Go on occasional head-clearing strolls, preferably outside. Stretch and do some light exercise. Refill your water bottle. Meet a co-worker in the break room for a snack and some chitchat.

True breaks are needed to fully recharge and recalibrate your approach to the job. Studies have shown that people are happier and more productive when they take time off. Having your feet in the sand but your fingers scrolling through your Outlook calendar is not “disconnecting”. If you truly lack the resources to take an extended break, schedule a few long weekends throughout the year or even a midweek day off here and there to relax and focus on yourself.

Never let conflicts fester. Given the amount of time you spend with your creative colleagues, you’re bound to bump heads from time to time. The problem comes when the tension is never addressed effectively. Try to nip problems in the bud. Stewing leads to stress, and you risk damaging your own career if you lack the ability to be seen as a team player.

Don’t be afraid to ask for help. If you’re working as hard as you can and still feel buried in projects, don’t suffer in silence. Your manager can’t help you if he or she is not aware of the problem. Before you set up a meeting, think of a few solutions you can suggest that would ease your pressure, such as offloading some of the work to a freelancer or adjusting deadlines.

Try some time management tactics.Identify your most critical and time-sensitive tasks, and then make a prioritised to-do list. If you frequently must dig for files buried underneath piles of sticky notes and lunch receipts, perhaps it’s time to clear the clutter and make a clean sweep. Be willing to tactfully say no sometimes. Also, protect your time by guarding against scope creep. If you’re a hard worker with a reputation for meeting deadlines and fulfilling obligations, don’t feel guilty about occasionally delegating or pushing back against unrealistic expectations or an unmanageable workload.

Practise mindfulness. Mindfulness is about being actively attentive to your situation and your mental and physical responses to it. A few intentional changes, such as mentally preparing for your day, running more mindful meetings, and actively practising stress management, can go a long way towards making the workplace experience less stressful.

Source : GCMA

How to incentivise executives to take a long-term view

How to incentivise executives to take a long-term view

Executive pay structures that rely on bonuses can encourage decisions that prioritise short-term gain over the sustainable performance and ethical conduct of the business. This, in part, is why executive pay has become a topic of increasing concern to regulators and shareholders alike.

But there are steps boards can take to encourage leaders to focus on the long term, according to Wim Van der Stede, CIMA Professor of Accounting and Financial Management at the London School of Economics.

Remuneration committees should take the following factors into consideration when putting together compensation packages, Van der Stede said. When it comes to bonuses, measurability and sustainability are key.

Annual bonuses can be quite effective in settings where performance can be adequately measured, especially where there is a direct link between the actions and decisions taken and their results, which can help to alleviate some potential short-term dysfunctional consequences of large bonuses.

Because this is a lot to ask from any incentive system, firms should not exclusively rely on short-term, annual bonuses, but rather complement them with other types of incentives, Van der Stede added. Doing so provides the opportunity to mitigate any measurement problems or address any areas where the goals are not aligned with the long-term objectives of the business.

Regulators and shareholder groups are increasingly interested in the link between performance and bonus pay, but transparency in this area is also important to internal stakeholders. When employees perceive executive bonuses to be unjustified or disproportionate, this can trigger resentment and undermine engagement, with knock-on effects for performance and culture.

Bonuses should be maximally motivating towards the achievement of long-term sustainable performance, but not excessive. However, excessive is a relative term, Van der Stede said. The magnitude of the bonus needs to be assessed within the sector to ensure that firms can offer a competitive pay package and attract, motivate, and retain the right type of talent. Excessive bonuses yield non-incremental benefits and, therefore, constitute an inefficient use of resources at best, and are likely to exacerbate short-termist behaviour at worst. Companies should tweak the design of compensation packages regularly to ensure that they remain competitive but not excessive.

Evaluating sustainable performance

To gauge whether performance is sustainable, some longer-term metrics must be taken into account.

“Some combination [of long- and short-term metrics] is probably best, where maybe only 70% of the incentive pay is based on the realisation of current performance and the remaining 30% is based on, say, three-year returns or market, equity-based performance for publicly traded companies, and/or some non-financial measures,” Van der Stede said.

The right split between short- and long-term measures depends on the length of the company’s business cycle and the nature of the business model. For example, when a pharmaceuticals company invests in research and development, it can be a number of years until the benefits of the investment are seen.

The horizon over which performance is measured also needs to be carefully calibrated. It needs to be long enough to establish whether the performance was sustainable, but the longer it is, the less motivating effect the bonus has, explained Van der Stede. So a balance needs to be struck between the various dimensions of inherently complex incentive plan designs.

“If you keep an eye on some of these non-financial measures related to customer satisfaction, employee development, share of sales from new products, and so on, you will have a gauge of your ability to continue to do well in the future, especially when the chosen measures are leading indicators of future financial performance.”

“Of course, non-financial measures can be manipulated, too, and thus even the best incentive systems stand no chance when not embedded in, or supported by, the right culture,” Van der Stede added.

Another option is to defer part of bonus payments, so, for example, only two-thirds of the bonus earned is paid out at the end of the period, and the other third is put into a bonus bank, Van der Stede explained.

The deferred amount that is eventually paid out will vary according to performance on that performance measure in future quarters or periods. So, if the employees, managers, or executives have done something to boost profits now, in a myopic rather than substantial fashion, it may never be paid out because the performance on which the bonus was earned did not prove sustainable.

Encouraging a long-term focus

Organisational culture, tone from the top, and career progression can also help create a focus on the sustainability of the business.

In an organisation whose leaders consistently and reliably maintain focus on the long term, employees will be less likely to choose the “earn while we can” option when faced with a choice between doing something that increases their bonus now and something deemed to have a beneficial long-term effect.

Similarly, an organisation that focuses on promoting employees who never miss their targets could be sending a message that hitting targets is the only way to progress.

A more holistic approach to performance evaluation which also considers all the key aspects of the job is likely not only to make for a more effective incentive plan, but also to help shape the culture, Van der Stede said. When people who place importance on factors such as collegiality, business development, talent development, and new delivery initiatives are promoted to leadership roles, they will also expect their staff to exhibit these characteristics, rather than simply prioritising targets to maximise their bonus.

Source : GCMA

Price rises are making a comeback at Australia’s major supermarkets ahead of Amazon’s arrival

Price rises are making a comeback at Australia’s major supermarkets ahead of Amazon’s arrival

Photo: Quinn Rooney/ Getty Images / File

You’re not imagining it: prices are ticking up at Australia’s major supermarkets, especially for fresh fruit and vegetables.

The sector, which has seen ferocious competition in recent years thanks to the arrival of German budget chain Aldi, saw a strong lift in prices for the first time in eighteen months, according to special research from Deutsche Bank.

The industry is waiting to see the full extent of US internet giant Amazon’s plans to enter the market, especially how aggressively it will compete in the fresh grocery category. The company is known to be building capability for its Amazon Fresh service, through which customers can order groceries online in the morning and have them delivered by dinner time.

Deutsche Bank, which checks prices around the country at supermarkets on fixed basket of goods each week, says fresh fruit and vegetable prices surged more than 7% in the December quarter, compared to a limp 0.7% in the three months to September.

The effect on across-the-board prices in the sector is seen in the chart below:

Courtesy of Deutsche Bank.

Between the major two supermarkets, the price rises were much more pronounced at Coles, compared to Woolworths which has been pursuing a turnaround strategy involving the closure of 30 stores and cutting 500 jobs. This shows the difference between the two:

The inflation in fresh goods is offset at the major chains by their continued investment in their private label products, which saw deflation during the quarter.

Deutsche highlights that Woolworths stands to gain more than Coles’ holding company Wesfarmers from food inflation, simply because the diversity of Wesfarmers portfolio of businesses makes its earnings less sensitive to the impact of stronger supermarket revenues.

Deutsche has a buy rating on Woolworths with a $27 price target, and a sell on Wesfarmers with a $38 price target.

Source : Business Insider

Three economies helped by a commodities rebound

Three economies helped by a commodities rebound

Rebounding prices are lifting the incomes of three Asia-Pacific economies

By Jason Murphy

Being a commodity-exporting nation requires great stoicism. Just when you think you know what prices are doing, they swing dramatically.

Between 2011 and mid-2016 the world grew accustomed to the prolonged slide in the prices of coal and iron ore. Then, in the second half of 2016, the extended erosion of commodity prices was replaced quite suddenly by startling spikes.

The impact is being felt in commodity exporting nations such as Australia, Indonesia and Malaysia, where it is lifting forecasts of economic growth in 2017.

Coal and iron ore boost Australia’s bottom line

The prices of Australia’s major resource exports have jumped during 2016. Coking coal, used to make steel, rose in price from below US$80 a tonne in the middle of the year to more than US$300 by early November.The price of thermal coal, used mostly to produce electricity, rose more modestly over that same period but nearly doubled. The iron ore price has risen by more than 90 per cent in 12 months, trading at US$79 a tonne in early December.

Reserve Bank of Australia assistant governor (economic) Christopher Kent argues the price surge will lift growth and help cut unemployment. Commonwealth Bank economist Kristina Clifton describes the effect as “a solid boost”.

Despite this, Australia’s economy still contracted 0.5 per cent in the third quarter, compared with the second quarter.

Related: A fall in oil price becomes opportunity for Malaysia’s Petronas

If current prices of coal and iron ore are maintained through to April 2017, estimates Clifton, Australia could see a lift in gross domestic product (GDP) of between 0.5 and 1.5 per cent. If higher prices hold to the end of 2017, that bump could be 2 to 3 per cent.

Higher oil prices timely for Malaysia

The oil price, as measured by the futures price of West Texas intermediate crude oil, has risen from US$26 a barrel in February 2016 to more than US$48 in late November and jumped to over US$50 in the first week of December.This has been timely for oil-exporting Malaysia, where economic growth slid from more than 6 per cent in 2014 to 4 per cent in the second quarter of 2016. The mid-2016 oil price rise appears to have supported a recovery in growth, which improved in the third quarter, to 4.3 per cent.

The Asian Development Bank says the Malaysian economy had slowed due to weaker prices for oil, gas and manufactured goods but it now forecasts GDP growth of 4.4 per cent in 2017, attributing some of this to the speedier recovery in global economies and higher prices for oil and gas.

The bank notes, however, there are risks to its forecast, such as from any renewed price weakness or from interest rate increases in the US.

Meanwhile, another, unrelated, oil price spike is also proving useful to Malaysia. Palm oil prices have risen 23 per cent over 2016. Malaysia exported more than 6.3 billion ringgit of palm oil products in October, the most recent period for which the Malaysian Palm Oil Board provides data, up from 5.7 billion ringgit in the same month of 2015.

LNG supports Indonesia

A recent increase in the spot price of liquefied natural gas (LNG) is particularly welcome for Indonesia. Although most LNG is sold globally under contract,  the country’s director of oil and gas, I Gusti Nyoman Wiratmaja, expects a large share of its annual production – almost a third – to be sold on the spot market in 2017.The World Bank, in its June 2016 Indonesia Economic Quarterly, notes that while exports and imports are both falling in Indonesia, exports are falling more slowly, as commodity prices rise or stay steady. The bank expects GDP to grow by 5.1 per cent in 2016 and 5.3 per cent in 2017, above the 4.8 per cent annual growth achieved in 2015.

Japanese buyers are, however, threatening to spoil the party. As the oil price fell during the past two years, the contracted price of LNG began to look high compared to spot prices.
In mid-2016, Japan’s Fair Trade Commission began an investigation that could lead to renegotiation of Japan’s LNG contracts, with the potential to spread through the Asia-Pacific region as buyers sought to renegotiate lower prices for LNG.

“The consequences of this action, if successful, are truly seismic,” argues Geoffrey Cann, Deloitte Australia’s national director of oil and gas. South Korea, China and Taiwan could follow suit, he says.

In this context, the recent bump in Asian LNG spot prices is welcome for LNG exporters such as Indonesia and Australia. LNG spot prices, as reported by market monitoring firm Platts, have risen from less than US$5 per million British thermal units (MMBtu) in April to more than US$7 in November 2016.

How sustainable are commodity price rises?

Coal and oil prices are notoriously hard to predict. That is especially true now, because recent rises depend partly on government decisions as well as market factors.

The coal price spike follows a Chinese government decision in April 2016 to limit production at certain coal mines to 276 days a year. This could explain some of the price rise. China will unwind the restrictions in March 2017 and this could cause some of the recent price increases to weaken.

Commonwealth Bank analysts believe current coal prices cannot be sustained indefinitely but argue prices will remain higher than expected in early 2017.

OPEC’s decision on November 30 to cut oil production by about 1 per cent of global output saw the price of West Texas intermediate crude jump to $US51.79. But it remains to be seen whether OPEC members will stick to their agreement and how much impact the cartel still has on global production and prices.

For commodity exporting nations such as Australia, Indonesia and Malaysia the consequences of these far-off actions will be felt very close to home.

Source : CPA

9 essentials of executive coaching

9 essentials of executive coaching

The rise and rise of executive coaching

In 2002, executive coach and clinical psychologist Dr Steven Berglas wrote an article for Harvard Business Review titled, “The very real dangers of executive coaching”. In it, he describes the botched jobs he’s had to fix after someone has been in the hands of an underqualified executive coach.

“To this day, not a month goes by when I don’t have a call about that article,” says Berglas from his Los Angeles home. “If anything, the situation has become worse in the last 14 years. The field is being flooded due to the lucrative nature of the work. There are so many degree-less professionals out there. It’s a horrific landscape for people to navigate.”

Berglas is not alone in his concern. The UK’s Professor David Clutterbuck, who some refer to as the “grandfather” of mentoring and coaching, was a keynote speaker at the International Coach Federation (ICF) Australasia Conference in October 2016 in Queensland. He has assessed hundreds of accredited coaches in centres designed for this purpose and says: “Seventy per cent of these coaches fail to meet even the basic standards of competence. That’s worrying.”

With low barriers to entry, no regulation and market confusion about what coaching actually is – definitions vary considerably – the ground is fertile for rogue players. Some of these may be hard to spot, as they include the well-dressed, former senior executive with many years of corporate experience, who deems specific training in coaching unnecessary.

In Australia, the coaching landscape is less likely to be “horrific”, as it has some of the most sophisticated buyers of workplace coaching in the world, according to Tony Mathers, CEO of the Institute of Executive Coaching and Leadership (IECL), which operates in the Asia-Pacific region. The coaching market in the UK is similar to in Australia in its level of maturity, says Mathers, with locations such as Singapore and Hong Kong a few years behind.

“Government and corporate purchasers [in Australia] know what they are doing in terms of the criteria they set, the qualifications they demand and evaluation required of the coaches they engage,” says Mathers.

However, not all purchasers are so experienced. So how can they know if the thousands of dollars they are spending on coaching senior staff is money well spent? And is price, which can range from about A$400 to A$1200 or more per hour, a reasonable indicator of quality?

“We cannot find any significant correlation between fee levels and competence or between fees and hours of coaching experience,” says Clutterbuck. “The difference appears to be mostly one of marketing expertise.”

As co-founder of the European Mentoring and Coaching Council, Clutterbuck was instrumental in putting organisational coaching on the map in the UK in the 1990s. He says an obvious trap that many workplaces fall into these days is automatically believing that all executive coaches are of high quality. “Few [providers] apply rigorous vetting to the coaches they offer,” says Clutterbuck.

Untrained coaches are a major concern of coaching practitioners worldwide, according to the 2016 ICF Global Coaching Study, conducted by PwC. The survey was completed by 15,380 respondents, 62 per cent of whom identified as business coaches, from 137 countries.

“[Coaching] fills a cultural gap for those in senior roles … where else can they have a safe and trusted conversation?” Dr Julie-Anne Tooth

Australia is leading the way in trying to tackle the problem, with Standards Australia publishing Guidelines for Coaching in Organisations in 2011. For all countries, part of the challenge has been trying to keep up with the rapid growth of the coaching industry.

Over the past couple of decades, executive coaching has grown from a relatively novel concept to a mainstream learning and development intervention in many organisations throughout the world. It is often used in combination with mentoring and training or to help embed the learnings from leadership development programs.

Dr Hilary Armstrong is an executive coach and coach supervisor with Sydney coaching practice WhyteCo. She wrote the curriculum for, and led the delivery of, IECL’s accredited coaching program for 10 years and has witnessed the industry’s escalation.

“In the late 1990s, when coaching was just starting, it tended to be used for remedial purposes,” she says. “Then around 2010, when uptake by organisations really increased, it was commonly used to increase performance and productivity. Today, there is more of a focus on developing potential.”

Why is executive coaching so popular?

This is one of the questions that puzzled Dr Julie-Anne Tooth when she was working in a senior HR role 10 years ago. “I looked at this unregulated activity that wasn’t a profession yet was proving so popular in organisations, and I really wanted to discover what all the hype was about,” she says.

So, Tooth trained as a coach, and then practised as one. Still not satisfied, she devoted an entire PhD to the topic.

Tooth concluded in her thesis that at the heart of coaching lies a self-reflective practice that takes place within a trusted, confidential relationship.

“The opportunity to step away, reflect on your experience and learn from it is very absent from MBAs and the business world today, so it [coaching] is filling an important learning gap,” she says. “It also fills a cultural gap for those in senior roles who are ‘lonely at the top’ – where else can senior managers and CEOs have a safe and trusted conversation?”

When conducted well, does coaching actually work?

The University of Sydney is one of the few centres conducting academic research into the coaching industry. Its research and literature reviews suggest that coaching improves goal attainment, performance, mental health and resilience, as well as the ability to cope with organisational change. Through her PhD, Tooth also discovered that the coaching process leaves people more able to coach themselves.

Does it deliver a measurable ROI?

Clutterbuck says a number of studies on the efficacy of coaching show high returns of around 600 per cent. “Most of these studies don’t have control groups; however, it’s probably a reasonably accurate estimate,” he adds.

Some of the biggest benefits of coaching, he says, tend to emerge well after the coaching assignment and are more difficult to measure. “How do you put a value on someone growing in maturity, or moving from a mindset applicable to one level of leadership to a mindset suited to a higher level?” he asks.

The future of executive coaching

All indicators are that executive coaching is well positioned for continued growth.

 First, it satisfies self-interest. Who wouldn’t love having a conversation with someone for an hour or more, where the focus is completely on you, your goals and your potential?

Second, it meets a broader need. “The speed of change is so great today that loss of reflection in organisations has increased to critical levels,” explains Armstrong. “Reflection is an important part of our ability to learn and make wise, ethical decisions. It’s hard to put words to the value that many people derive from having that space … to stop, reflect and think about what has been happening and to learn about it.”

Meanwhile, the broader coaching community is divided on whether they think coaching should be regulated. According to the 2016 ICF Global Coaching Study, 52 per cent of coaches agree that it should.

Berglas will be frustrated to know that coaches in North America were the least likely to agree – just 37 per cent there said yes to regulation.

What is coaching?

Standards Australia defines coaching as “a collaborative endeavour between a coach and a client (an individual or group) for the purpose of enhancing the life experience, skills, performance, capacities or wellbeing of the client”. Executive coaching is defined as “a service provided to executives and line managers for the purpose of improving skills, performance or work-related professional and personal development”.

The checklist

When screening a coach, here are some of the key points to check:

  • Coaching-specific qualifications.
  • Supervision and ongoing development.
  • Theoretical framework and evidence base underpinning their approach.
  • Methods and assessment tools used.
  • General coaching experience – years in practice and depth of experience.
  • Industry-specific coaching experience: does the coach understand your context?
  • Business experience.
  • Commercial acumen, including reporting practices and stakeholder management.
  • Professional membership and ethics.

Trends in coaching

Professor David Clutterbuck predicts a shift towards using internal coaches, where someone with a normal organisational role is trained to be an accredited coach. The Institute of Executive Coaching and Leadership confirms this trend with its clients in Australia, Singapore, Hong Kong and South-East Asia.

“The results of line manager coaching have been disappointing,” says Clutterbuck, explaining that it’s difficult to be totally honest with someone who will also be doing your performance review. “New approaches, such as creating coaching cultures within intact work teams, are producing much better results.”
This is an approach that has been embraced by EY, where coaching comes in two forms:
“Big C” coaching, which represents formal coaching engagements, and “Little C” coaching, which cultivates a coaching culture through the informal, day-to-day conversations that help professionals to develop.

Workers worldwide question companies’ development programs

Workers worldwide question companies’ development programs

Around the world, workers have a foot out the door, or at least a polished-up profile on LinkedIn.

An increasing percentage of UK employees say they are unlikely to fulfill career aspirations in their current organisation. And two-thirds of Millennials in a global survey say that they hope to join a new organisation by the end of 2020.

To some employees, a lack of development offerings is holding them back. For others, a desire to broaden skills is part of the appeal of taking on a new role. And the search for a higher-paying job remains a motivator.

The two surveys underscore the issue of employees who seem disengaged enough that they’re considering work elsewhere. A UK survey by the Chartered Institute of Personnel and Development (CIPD) places job satisfaction at its lowest mark since late 2013. Thirty per cent of respondents believe their organisation is not providing opportunities to learn and grow, and 24% say they’re actively looking for a new job, a percentage not seen in 2½ years.

In the 2016 Deloitte Millennial Survey, workers who said they are likely to stay more than five years are more satisfied by their companies’ support of professional development (83%) than those likely to leave within two years (58%). This gap, 25 percentage points, is tied for the widest margin in the survey. Shorter-term workers are also far less likely to be satisfied with an organisation’s sense of purpose and personal recognition.

Additionally, 63% of Deloitte respondents say their leadership skills are not being fully developed.

The survey recommends several ways for companies to keep Millennials, in particular, in the fold, in addition to paying a competitive salary. Here are three:

  1. Encourage mentorship. Most Millennial employees with a mentor think they’re receiving good advice (94%) and believe their mentors are interested in the mentee’s personal development (91%). Mentorship programmes not only help current workers, but they also help to attract talent. Companies can point to formal mentoring as a perk that some competitors might not have.
  2. Have purpose beyond profit. Employees who are more aware of, and in alignment with, a company’s values will support that company with good work, and they are more likely to stay. Also, companies that can articulate their brand have a better chance at attracting talented employees.
  3. Provide development opportunities. Only 24% of Millennials are very satisfied with their companies’ development efforts. And, in an earlier CIPD survey, 33% were dissatisfied with their career progress.

 

Source  :GCMA

How to avoid common mistakes during high M&A activity

How to avoid common mistakes during high M&A activity

Conditions remain strong for mergers and acquisitions, prompting 63% of CFOs to anticipate pursuing deals in 2016, according to global surveys Deloitte conducted in the fourth quarter of 2015. More than half of the CFOs who expressed interest in an M&A said they are pursuing deals to expand in existing markets, diversify in new markets, or achieve scale efficiencies.

Low interest rates, accessible and inexpensive financing, and healthy balance sheets boosted M&A activity to $3.8 trillion in 2015, surpassing the previous record set in 2007, according to data compiled by Bloomberg.

Uncertainty that is curbing the risk appetite in some countries may also slow M&A activity, but exuberance during periods of rapid M&A activity can lead to mistakes that companies aren’t usually prone to make. The three most common are:

  • Lacking a clear strategy as to what role an M&A will play in the company’s growth.
  • Paying too much for a deal because average bid premiums are driving up prices.
  • Resorting to an M&A as a last-ditch option to drive corporate growth.

To avoid the mistakes, CFOs can take these five steps:

Assess strengths, weaknesses, and opportunities for growth. The CFO and executive management should assess the company’s opportunities for growth in revenue and value and develop a strategy to complement strengths and backfill weaknesses. That may include deciding which customer segments in which geographic locations to serve and how to distinguish the company from its competitors, as well as understanding the capabilities and market access required to achieve the goals.

Identify priority pathways for growth. As part of the strategic assessment, identify new products or solutions that should be brought to market by a specific business unit at prices adding value for customers. These priority pathways for growth can highlight gaps and the role of M&A across specific units.

Examine competitors’ deals. Deals competitors have made in the past, including the size and geography of the deal, customer segments affected, and capabilities, can help prioritise M&A targets based on the company’s strategy.

Strategically screen identified opportunities. Generate portfolios of priority M&A candidates by screening identified opportunities. Screening filters such as size, geography, technology, and management talent, are important strategic choices that can help management and the board understand why a particular target was identified in the first place.

Execute with discipline. Anticipate potential culture clashes, labour disputes, and distribution gaps in a particular deal and factor them in during the screening process. With the integration risk identified, differentiate M&A opportunities and determine resources and talent needed to integrate effectively.

Source :  CGMA  Magazine