The Prince and Insights in M&A Success

The Prince and Insights in M&A Success

Business is often seen as war and statecraft. Take for example how we describe numerous management terms such as competitive positioning, stick vs. carrot, or war-gamming. If business is war then merger and acquisition, would be analogous to the capture and annexation of new principalities. In both scenarios, the acquirer must manage institutional complexity, cultural resistance and political machinations to  unlock economic value.

Machiavelli and M&A

In his 16th century treatise on statecraft  “The Prince“, Machiavelli offered at least 4 pragmatic take-aways for leaders  to achieve success in governing new principalities. These case based insights are ever relevant for senior executives today in executing M&A in the global market:

(1) Ensure the  leader  is “on the ground” and actively managing  rather than over-relying on delegating. Consider the following chapter 3 quote. (“…when states are acquired … especially those differing in language, customs, … one of the greatest helps would be that he who has acquired them should go and reside there. Because, if one is on the spot, disorders are seen as they spring up … [and] the country is not pillaged by your officials …)

(2) Stay tuned-in and forge alliance across the various constituents of the target organization, not just with the executive class. For example in chapter 3. (“The Romans … observed closely these measures; they maintained friendly relations with the minor powers … for when the evils that arise have been forseen, they can be quickly redressed”)

(3) Manage and contain powerful stakeholders with different interests and agendas. This comes up several times, as illustrated in the following chapter 4 quote. [“…and as if it were not enough to have aggrandized the Church, he wishing to have Naples, divides it with the King of Spain … thus King Louis (of France) lost Lombardy …”]

(4) All else being equal a strong top-down led organization is easier to integrate than a bottoms-up decentralized organization. Think Apple vs. professional services firm like Deloitte. Machiavelli writes in chapter 4. (“…no one will marvel at the ease with which Alexander held the empire of Asia, or the difficulties which others have had to keep an acquisition, such as Pyrrhus … this is not occasioned by the ability of the conquerer, but by the want of uniformity in the subject state”)

Its amazing that a 500 years old treatise on statecraft and power can lend insights into today’s M&A context.

If you enjoyed the above you may also like Spain’s Colonial Wealth and Enterprise Building.

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