If your organization is making acquisitions to deliver more strategic value to the customer, some tactical product management might be in order before your next purchase.
Acquiring a company can be a lot like buying your next electronic gadget. There’s the anticipation and excitement of “new” and the promise of many benefits. Then, just like your new gadget, the acquisition loses some of its sheen when reality doesn’t live up to the hype – and there’s never any shortage of hype!
Before the hunt for your next strategic acquisition begins, there’s a bit of tactical product management that will go a long way toward preventing buyer’s remorse.
On the surface, identifying your next acquisition target is pretty simple, right? Understand the strategic goals of your target customers, identify the obstacles standing in their way, determine the gaps in your product portfolio, and let the financial and technical due diligence begin.
But there’s one critical component of due diligence that many companies skip – defining the tactical business solutions (from the customer’s perspective) that an acquisition will ultimately help you deliver. Without operational knowledge of your customer’s business, the acquisition may not deliver the strategic impact you or your customers are looking for.
Product Management’s Pre-Acquisition Deliverables
Before your team starts looking for acquisition targets, product management should offer up the following to complement the financial and technical components of the due diligence process:
- Define the Tactical Business Solutions – From the Customer’s Perspective
In simple terms, it’s a one-pager with a couple of bullet points for each heading. No need to create a novel! Define the customer’s business goals, the biggest obstacles preventing them from meeting those goals, and why those obstacles exist.
- Business Process Workflows
Identify specific business activities and workflows (use cases) that have the biggest impact on those business goals and create a couple of “high-level” visual diagrams that illustrate how customers do their work. Highlight the steps in each of those workflows that the acquired products/services have to support and use them as filters during the product evaluation. It will clarify up front, the extent to which the acquired products do or don’t contribute to the solutions.
Prioritize the business workflows in order of most to least impact on the customer’s goals. They’ll provide a consistent measuring stick and apples-to-apples gap analysis as you’re evaluating each potential acquisition.
On the surface, many acquisition prospects look attractive because the products appear complementary. But if you don’t look at those acquisitions through a tactical customer lens — specific use cases that have to be addressed — you could be in for a few post-acquisition surprises.
When armed with these product management deliverables, your acquisition team can set out on its journey with a very clear picture of the ideal target and the functional product criteria required to make the short list. It will not only expedite the product evaluation process, it will expedite the post-acquisition product integration necessary to deliver the ultimate solutions. And most of all, limit those post-acquisitions surprises to the little things.