"Acquire not just for scale but also for capability"

Balkrishan Goenka chairman, Welspun Group, on five ways to effectively manage an overseas acquisition 

Support your strategic intent: While it isn’t wrong to be attracted to an exciting opportunity, always ask yourself, ‘is this something I really want to do?’ The decision to acquire or partner with a new venture must always support your vision and the strategic intent you have for your business. Acquire not just for the scale but also for the capability, since that is what will pay off in the long run.

Organisational culture can make or break an acquisition: Make sure the people from both sides have similar DNA. Your culture audit must be in place and your people, aligned. Insensitive behaviour from either side can lead to disharmony post an acquisition.

Consider all stakeholders along the way: Consider all stakeholders — customers, business partners, vendors, suppliers, civic authorities and regulatory bodies. Objective stakeholder assessments will enable you to ascertain how to approach specific groups. Also consider how to engage your stakeholders to facilitate your strategic intent.  

Have a crisis management plan: Put in place a capable crisis team of experienced professionals who can monitor and assess the possibility of future risks. The team needs to proactively work on scenario analysis and contingency planning. Resilience is a quality that we can prepare for and build.

Have an exit strategy ready: Don’t be pessimistic but always have a plan-B ready. Deals could go wrong in spite of everything being in place. Think about what you could do with joint assets, financial liabilities and workforce if things do go wrong.