Not all Business Unit leaders are qualified to benefit from a strategic M&A program.
CEOs and Corporate Development heads owe it to the company to use strategic M&A wisely and this starts with rewarding only qualified Operating Executives with the privilege to pursue strategic M&A targets. Business Unit leaders that consistently hit their Revenue and EBITDA targets, that do not waste capital nor resources, that promote the corporate culture are the type of Operating Executives that should be rewarded with the privilege to pursue strategic M&A. Business Unit leaders that regularly underperform operating budgets should not be rewarded with the same M&A privilege. The exception to the rule is the opportunistic M&A deal that would not necessarily fit inside of an existing business unit but that would stand alone inside of a holding company with the acquired company’s CEO reporting to the holding company’s CEO rather than report into a Busines Unit head. Thus, CEOs should use M&A as a giant carrot with which to reward high performing Operating Executives.