Inorganic Growth and Independent Talent
After months of starts, stops, and unavoidable stalls, businesses are now making big moves to get back on track and take advantage of burgeoning demand. The need for increased resilience and flexibility is shaping current corporate goals, with inorganic growth strategy leading the way.
Though the pandemic largely spurred this shift, geopolitical changes have generated additional urgency. As companies merge and purge to scale quickly or jettison superfluous assets, independent talent are proving to be critical resources in facilitating these transformations.
Pair up or pare down
Traditional growth strategies generally center on saturating a market with established products, then diversifying and expanding to new markets with new products. The second part of this strategy often involves lengthy roadmaps and extensive testing, but when Covid hit, time became a luxury few could afford.
Certain industries, such as airlines and hotels, were caught off-guard and continue to struggle mightily to recover. Most others pressed pause on their plans so they could reassess their options and redirect their efforts and resources. Technology and logistics were well positioned to thrive due to the accelerated need for increased flexibility and digital everything. Though they fared best, speed remains their watchword.
During the pandemic, companies with plans for digital transformation had to abbreviate their timelines, and many turned to AI and IoT to survive. Now, they are looking to acquire these assets rather than building them entirely in-house. At the same time, pandemic fatigue is on the rise and valuations remain stable, creating attractive divestiture opportunities for weary owners.
Confidence despite recession concerns
Though an M&A boom isn’t something most economists would expect when facing an imminent global recession, Covid continues to defy expectations. Over the last year, companies have learned a great deal about seeking silver linings and prying open doors of opportunity, and inorganic growth is the gold ring many are reaching for right now.
Organizations along both legs of the world’s K-shaped recovery are finding SPACs (special purpose acquisition companies), M&A (mergers and acquisitions), and joint ventures to be the best path forward in the “new normal.” The PwC 2021 Outlook found that 53 percent of executives said their companies expect to increase M&A activity in 2021.
Furthermore, despite the fact that prospects of a recession remain high, so does confidence. As Anu Aiyengar, Global Co-Head of M&A for JP Morgan says, “M&A is a confidence game. With political certainty, the end of the pandemic in sight, and strong capital markets, the confidence levels in the C-suite and board rooms are high. That bodes well for M&A.”
Market confidence is being driven by pent-up demand as well as the political landscape. But while many expect greater predictability and stability to come, there’s also the likelihood of an increase in capital gains, which is putting pressure on corporations to complete M&A activities sooner than later.
On-demand success in inorganic growth
It’s clear that speed remains essential, yet transformations of significant size and complexity also require experienced leadership and guidance. For multi-billion dollar acquisitions, it’s common practice to employ the services of a large consulting firm and/or investment bank. It’s also increasingly common to bring in independent consultants for additional support—or as project leads on business unit-specific acquisitions.
Prior to the pandemic, on-demand talent had already begun to demonstrate its value in executive-level work. Since then, as companies scrambled to reinforce supply chains, implement e-commerce strategies, and overhaul HR policies, the demand for on-demand has only grown.
Leadership, strategy, and execution are where high-end talent add the greatest value. And though independent talent may not entirely replace the services a big firm provides, there’s still plenty they can do to help ensure the project’s success. With high-stakes inorganic growth activities such as M&A—where 90 percent of deals fall through—it’s critical to have expert support throughout the process.
As a leading marketplace for highly experienced independent talent, Business Talent Group (BTG) has helped organizations across a broad range of industries navigate complex transformations. BTG collaborates with Upwork to combine our high-end strategic talent and its creative, technical and administrative talent into a comprehensive skill set that allows us to consistently execute large-scale M&A projects.
Here are some case studies of how our talent have provided critical expertise throughout the M&A / joint venture lifecycle:
VALUATION
Client: Head of M&A at a global pharma company
Project: Acquisition of a target in India with non-core assets in Europe and the U.S.
Challenge: Understanding the valuation of non-core assets
BTG Talent: A team of four independent M&A experts and analysts, led by a former Bain and LEK consultant who had held senior corporate development roles across the specialty manufacturing and life sciences sectors
Solution: Using a revenue-based approach and public and purchased market data, the consultants completed valuation P&Ls and deal models for each of the target’s non-core portfolio, pipeline, and manufacturing businesses in just two weeks.
DUE DILIGENCE
Client: Head of commercial business development for a global biopharma company
Project: Potential acquisition of a target with indications ranging from gastrointestinal disorders to ophthalmology
Challenge: Absence of a key leader with the deadline for a non-binding term sheet rapidly approaching
BTG Talent: Two-person team consisting of a biotech investment specialist and market analyst
Solution: The specialist customized a model that evaluated multiple scenarios and helped size patient populations while the analyst assessed market access and competitive dynamics. Within a week, the company had the information needed to make a successful bid and move to the next phase of acquisition.
TARGET ASSESSMENT
Client: Regional head of business development for a US-based technology company
Project: Conducting M&A target assessments in the UK
Challenge: Gap in expertise related to laying out strategic rationale and building financial models to quantify potential opportunities
BTG Talent: A former McKinsey engagement manager and financial services strategist with experience in growth, innovation, new market entry and product launch
Solution: The consultant helped the client identify the most promising targets by researching competitive positioning, quantifying potential synergies and building preliminary discounted cash flow models and material adverse change clauses.
IMPLEMENTATION
Client: Director of product and portfolio management at a F200 biopharmaceutical company
Project: Replacing a team of Big Three consultants and rounding out internal resources
Challenge: Keeping an in-progress integration of a recent acquisition on track
BTG Talent: A team of three consultants, including: a former Accenture manager with experience in global change management; a former Deloitte manager with deep experience in M&A and organizational effectiveness; and a former Deloitte, Accenture and IBM consultant with experience leading transformation and operations initiatives.
Solution: The team took the reins on implementation planning and helped manage multiple functional workstreams to facilitate an efficient integration progress.
POST-MERGER INTEGRATION
Client: HR team for a F500 hospitality giant
Project: Integrating new employees from an acquisition that had increased the organization’s headcount by 50%
Challenge: Shortage of resources and expertise related to efficiently integrating the new employees
BTG Talent: HR growth specialist
Solution: The specialist took the lead on integration while also transforming the HR organization and its talent acquisition and search process. The resulting organizational redesign helped integrate the new employees in a way that merged two corporate cultures without having a negative impact on morale or productivity.
INTERIM LEADERSHIP
Client: Stakeholders at a leading health insurer and its joint venture partner, one of the largest non-profit health systems in the US
Project: Interim leadership following the launch of a new health plan
Challenge: Lagging KPIs and the abrupt departure of a key leader
BTG Talent: A healthcare executive with experience managing strategy, clinical, and business objectives for numerous healthcare organizations
Solution: The talent served as interim CEO, bringing experience from previous joint ventures to provide oversight of the leadership team, ensure alignment across both organizations, and develop strategic plans for addressing market potential and opportunities.
Move quickly, grow quickly
Things aren’t slowing down anytime soon, and the companies that make moves now will be those with the greatest competitive advantage as 2021 rolls on. With the potential for tax hikes on the horizon, and consumer demand set to skyrocket higher as the end of the pandemic nears, it’s critical for organizations to take advantage of the inorganic growth opportunities that abound right now.
By combining on-the-ground executive experience with deep technical expertise, BTG independent consultants and executives can help your company navigate inorganic growth initiatives, whether you’re buying, selling, or just assessing your options. Their ability to provide interim leadership and shape long-term roles for joint ventures and partnerships can help bridge gaps, clarify strategic goals, and set a strong foundation for growth.
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