As of this writing, the value of M&A in 2015 is on track to rival last year’s, when deal-value announcements totaled about $3.4 trillion—levels not seen since 2008. That level of activity raises the stakes for companies reexamining their own business portfolios, as the shifting competitive landscape creates new opportunities—and threats. It may also explain why respondents who perceive their companies to be more successful at M&A are also significantly more likely to report looking for opportunities more often. Whether companies are successful because they look for opportunities more often or the other way around, we can’t say. But the correlation, combined with the fast pace of M&A activity in general, does suggest that more frequent portfolio reviews may be better.
These are among the findings of our newest M&A survey, which asked executives about underlying trends, what M&A capabilities their companies do (and don’t) have, and the effectiveness of their companies’ M&A programs relative to competitors. When we looked at what makes a company good at M&A, the results indicate that while it’s important to perform well at every step of the M&A process, the “high performers” differentiate themselves from others by evaluating their portfolios more often, moving faster through their due-diligence and execution processes, and building stronger capabilities for integration. According to the results, though, even the highest-performing companies could benefit from giving their M&A teams more effective incentives and from proactively connecting and building relationships with their potential targets.