In mergers and acquisitions (M&A), the due diligence process takes center stage. This is where you review the target company’s historical performance, financial projections, marketing strategy and a host of other factors. The challenge, however, is that focusing on checklists, financial statements and other specific company details can produce a by-the-numbers, mechanistic approach to M&A, one that overshadows another important process — namely, strategic decision-making.
In fact, strategic decision-making in M&A is just as important as due diligence, but it is often overlooked, says James Schrager, clinical professor of Entrepreneurship and Strategic Management at the University of Chicago Booth School of Business. Over the course of his career managing corporate turnarounds, conducting research, advising CEOs and sitting in corporate boardrooms, Schrager has identified what he describes as three of the most overlooked strategies for sound decision-making in M&A.