We all know examples of big firms that have either disappeared, destroyed value, or created less value than small ones. This is happens in all industries.
Confusion is often made between Size & Strength, but Strength is the real #1 driver for value creation.
Value is truly being built when all the following ingredients are also clear, strengthening continuously & aligning towards a long term purpose : vision, mission, values, solutions, market differentiations, leadership team, processes, tools, customer satisfaction (quality insurance).
Whether you invest in internal growth (organic) or in external growth (M&A), and before making any investment decision, you should get clear answers to questions like :
- How will this investment (or change, or acquisition) strengthen my existing business for the short, mid & long term?
- What will it help me build that I do not have today?
- How will this help differentiate my firm vs. competition?
- How stronger will my firm become after the implementation of this decision?
Not clear about the above? Then don't make the investment yet, your priority is to focus on getting clarity on the objectives & consequences of it.
Clear about the above & consensus is reached amongst leadership team? Then make your investment and focus on its very meticulous execution.