Saquib Vali Disney and 21st Century Fox. CVS Health and Aetna. Walmart and Flipkart. Loblaw and Shoppers. In business today, the biggest headlines involve mergers and acquisitions. M&A has become the ultimate growth strategy, the easy way to boost market share, acquire technologies, break into new categories, or intimidate or buy major competitors. In the first half of 2018, M&A activity hit a record $2.5 trillion – a sign of corporate leaders’ faith in this strategy. But the fact remains that most mergers don’t deliver the anticipated value. In 2016, leading business academic Roger Martin observed that “70% to 90% of acquisitions are abysmal failures.” There’s nothing wrong with the concept of M&A. When two companies provide complementary product lines, distribution and growth opportunities, 1 + 1 can indeed equal 3. Unfortunately, it’s the awkward merging of cultures – the coming together of two companies with different histories, processes and trajectories – that often results in sub-par outcomes. One inherent problem in M&A is the tendency of the acquired side to feel like they “lost” in the transaction. This feeling of victimization can turn top leaders into reluctant followers, eroding the culture of success that made the acquired organization a desirable target in the first place. It doesn’t have to be this way. In my involvement with acquisitions in my career, I have seen teams come together to make sure both sides win. Ironically, the biggest opportunity often lies with the acquired team. If they can shed the mantle of “victim," they can create new opportunities for growth amid the larger reorganization. I call this: “Be the cause, not the effect.” If we can focus management teams on creating their own best future – not clinging to past glories – we can make mergers and acquisitions a more predictably successful process. In my experience, organizations on the selling side can take three steps to maximize the benefits of a merger for both sides. 1. Cast off the “victim” mindset. Leadership is about powerlessness and passivity. Change the attitude of the team from “But, we’ve always done business this way” to “Let’s get on board and accept the mandate of the acquirer” – for everybody’s sakes. 2. As leader, actively seek to understand the acquirer’s motivation. Why did they buy the business? How do they wish to unlock its value? As the true experts in this business, how can we help them achieve – and even exceed – their expectations? 3. Create a culture of change, not stability. An acquisition presents a rare opportunity for a management team to push for substantive change. Ask, “What activities can we change (or drop altogether) to strengthen our core competencies? How can we manage our own affairs so we can reinvest in our most crucial activities?” Let me give you an actual example of how this process has played out. In one case, I was heading up a division of a multinational organization that had just been bought by a third party. I decided the best way to serve both organizations would be to take charge of change – and make sure my organization started contributing quickly and productively. As soon as the deal closed, I actively pressed my new superiors for answers. “Why did you buy this company? Where do you want to take it?” Sometimes our new leadership didn’t have the answers yet. But by initiating these tough conversations, I ensured we became part of that dialogue. I advised my team that the management that bought our organization expected to see us reduce costs by a certain percentage. That’s how acquirers unlock value: through synergy and simplification. But it had been some time since our organization had rigorously reviewed its operations, so I challenged my team to double that amount. “Tweaking” operations might get us through the current crunch, but it wouldn’t create new thinking. The acquisition was giving us a once-in-a-generation opportunity to ask, “How would we run this business if we could start all over?” Our team went to work with gusto. No longer victims, they unleashed their energy and creativity to take charge of our future. We inspected every business fundamental with an outsider’s eye. With the help of external consultants to guide our discussions, we asked, “What’s necessary, and what’s not? Where’s the value-add in every process? ” We discovered new epiphanies and efficiencies, and sacrificed some parts to enhance the whole. Given a situation we couldn’t control, we created a meaningful initiative that demonstrated we were still winners. In the end, our team was so successful creating new value that we were able to reinvest some of the proceeds back into our business. By acting instead of reacting, we were still determining our own destiny. We were cause, not effect. Over the following year, as the two corporate identities fused into one, our people retained their pride and their faith in the future. If your organization is wrestling with change initiatives, or anticipating an M&A event, remember that optimists accomplish more than pessimists. Focus your people on the bigger, positive picture. Help them win. There’s an old nautical saying: “I cannot control the wind, but I can adjust my sails.”

I think we can all agree, it’s been quite a year. From a global pandemic to a rapidly changing work environment and economic uncertainty, the changes we’ve seen this year have come to affect us all. In one way or another, we were all blindsided by COVID-19. But I don’t think we should have been. The main reason the pandemic came as such a shock was because of how universal the effects were. COVID-19 has spread to every major country on earth, and we’ve been forced to evaluate our lives and our business strategies. As CEOs, we’ve been left to find a solution to a problem none of us really expected to face. We’ve had to adjust. Here at Spyder Works, we’re known for our insights and long-term thinking. As a strategy firm, we look to help our clients better understand the future and provide them with the foresight and the ideas to deal with what might come their way. Since the pandemic began back in March, I have been thinking about how Spyder can help corporate leaders make sense of the future and its uncertainty. While speaking to clients and colleagues internationally, I developed a session that would help them make sense of the current situation going forward. Over the past seven months I developed an hour-long program titled “Macrotrends and the Next Abnormal.” We ran our first test session at the end of September to an international group of leaders from innovative and forward-thinking firms, drawing strong praise from the entire group. My goal was to discuss how macrotrends—long-term directional shifts that can impact your business on a global level—are impacting company operations, culture, marketing and more. By building an awareness of macrotrends, which range from anything like automation and ruralization, to pandemics, artificial intelligence and sweeping social media platforms like TikTok that are now being viewed as a cloak for security and privacy rights, CEOs can ensure their organizations continue moving forward in the best way possible. People are always talking about the “new normal” or the “next normal,” but they rarely talk about the abnormal, which is what I believe the future is all about. On a business level, this year has truly been abnormal. Travel, restaurant and retail industries found themselves making virtually zero in sales for a number of months, and there was nothing they could do about it. On the other hand, companies dealing in online technology and e-commerce are enjoying unprecedented growth. They were prepared for the future and it came faster than they ever imagined; it all happened in a matter of months. It’s clear to see that the definition of long-term is shrinking. When I earned my first business degree, long-term was probably 10 years. Now, as I work on my doctoral degree some thirty years later, long-term can be months, depending on the industry. Having foresight and an understanding of where we could be going, as well as the future challenges we may face, becomes much more important with the accelerating pace of business. During the first session, each member was asked to put their strategic, CEO hats on to discuss a number of macrotrends. During the hour, we shared insights with each other as we spoke about the trends and how company leaders can prepare their organizations for the future. The main takeaway of the session related to the art of the pivot, which is at the core of my Dynamic Organization model. The Dynamic Organization speaks to a fundamental change in the organizational structure of our businesses. CEOs need to learn that the interface between their brand, their company and the consumer now channels through operations. If you want to learn how to keep your company healthy and vibrant, you need to see operations as the pivotal core to your business. There is a need, now more than ever, for companies to preact the future and meet the needs of potential disasters (which seem to be happening every other week this year). Ignoring the future won’t make it go away. Organizations need to understand the future, see how it may come to affect them and be ready to adapt as is necessary. What I want to do is help CEOs and leadership teams learn to identify true macrotrends, ones that will affect their industries for years to come, and recognize the most relevant ones for their business. If you learn to understand the macrotrends and have the tools to embrace them, then you can prepare your organization to pivot and become winners in the long-term.

You know their names well: Apple, Shopify, Johnson & Johnson, P&G. Their total market capitalization dominates the stock market, and for good reason. What differentiates these companies from their competition is that they are Market Makers: companies that have mastered not just the art but also the discipline of innovation and used it to establish their dominance in the market. And nowadays, everybody wants to be a Market Maker! After nearly 30 years, Spyder has helped hundreds of products, brands and companies be just that, across many sectors and dozens of countries. And we have done so as a discipline; powered by process, resilience and perseverance. In this four-part series, I will be sharing the insights I’ve curated over 30 years of experience. For this blog, we will delve into the four Market Stages and the path to becoming a Market Maker. There’s a difference in how you behave, how the market perceives you and how you lead, depending on which stage you’re in. So, let’s get started.

Take a moment to think about a business you love. Now ask yourself, what are their core competencies—the resources or capabilities that comprise their strategic advantage? For me, a few come to mind. McDonald’s has standardization. It serves nine million pounds of French fries every day, and every one of them has precisely the same taste and texture. Apple has design. The intuitiveness of its devices and their interfaces gives them an edge over other competitors. Google has powerful algorithms, high-end software engineering, and an amazing office culture with a drive to innovate. Walmart has buying power. The sheer size of its buying operation gives it the ability to buy cheap and undersell competitors. And when you think about it, almost every successful company has at least one core competency that helps it stand out from the rest. Netflix is the prime streaming service because it has prioritized the development of content. While its competitors are releasing a new show every week or month, Netflix is releasing one almost every day! Put simply, a core competency explains what a business can do better than anyone else, and why. It can be a product, process, service and more. To live up to its name, a core competency must accomplish three things: It must provide superior value or benefits to the consumer. It must be sustainable long-term and fit into the overall strategy of the company. It must be difficult or cost prohibitive for a competitor to replicate.