This is an exercise I perform with my boards no less than once every several years in planning exercises attended by the board and senior management, sometimes augmented with an industry consultant or expert from the outside.
Use a white board visible to the entire group. Draw and label four columns and ten rows. The columns: “Name of candidate acquirer”, “what they want”, “what we want” and “likelihood”.
[Email readers continue here…] The magic of this exercise is not only in the organization of group focus upon the liquidity event and possible buyers. It is in revisiting column two of the chart. You will quickly note that at least four of the ten candidates, if each had perfect knowledge of your company and its resources, would want the very same thing from an acquisition. Whatever that is, it shines as the true core competency of your corporation, whether previously expressed or even recognized by management. It is in this area where I would redirect resources such as manpower and money, to build value more effectively and quickly than in any other area of the enterprise.
Occasionally, the insight gained from this exercise comes as a complete surprise to the board and management. And that is most rewarding to see.
Incredible powerful. If companies were build focusing their efforts on building value for their future potential buyers…they would build value indeed. Thanks Dave.
Dave,
This was incredibly helpful…as are all of your posts!
Thank you.