There’s an interesting dynamic to doing deals inside a company. Most likely, you’re going to be measured (and rewarded) based on the deals you’ve done. When you tally your achievements at the end of the year, what you hope to find is a litany of deals successfully closed at great valuations, integrations achieved within the allotted time and budget, excess synergies created, thriving joint ventures – you get the idea. What you can’t take credit for is something that’s every bit as important and which in some years will account for the bulk of your time at work – deals that don’t get done.
Probably 80+% of potential deals shouldn’t be done, and to be effective as a corporate development professional you’ve got to have the ability to quickly identify the stinkers and cut them loose before you waste too much time on them. Sometimes you don’t have a choice – if you’re evaluating a major strategic merger or acquisition that senior management is behind, that deal will suck you up in its vortex, and there you’ll toil for months until the wheels fall off. I spent a good chunk of 2002 in such a place. However, on smaller deals that you lead, you must eliminate the non-starters before you’ve invested too much of your time. By all means, take the time to think creatively about whether something can be done. But look very critically at every deal at the earliest stages. Look for reasons to kill the deal – over-rated talent or products; potential integration nightmares; senior management reticence to back a particular deal structure or product area. Scour the financials and treat any forecasts as pure fiction. This is no place for rose-colored glasses.