The one area that could be strengthened is the piece on ‘strategic due diligence’. Having worked on this a bit with PWC, it looks like financial due diligence still overwhelms all other issues in the acquisition planning process. I’ve never bought the ‘acquisitions don’t work’ findings that everyone seems to just accept as true. All the studies I’ve seen look at the wrong indicators to arrive at this conclusion – often short- to medium-term movements in stock price. But we’ve seen repeatedly that stock price movements are a pretty useless indicator of strategic value, probably because investors have little clue how a company’s strategy relates to longer-term earnings prospects.

Good acquisitions not only give rise to immediate synergies [which may or may not give a financial pay-back on the deal], but also

1. give access to additional resources that enable the merged company to drive performance that was otherwise not accessible, and
2. [even better!] enable faster development of yet more resources and capabilities that will drive performance still further in the future

Neither of these are usually sufficiently recognisable to outsiders at the time, and are too distant to be well-reflected in the stock-price.  

One reason strategic due diligence is so hard to do is the abstract and confused terminology on the very issues that make it important – resources and capabilities. This makes it hard to measure these things, and even harder to work out their impact on longer-term performance. See chapters 9 and 10 of Strategic Management Dynamics for a clarification.

Seven Ways Forward from Booz & Co’s strategy+business on, with specifics for Manufacturing, Consumer Products, Aerospace and Defense, Telecom, Finance, and general guidance on rebuilding capabilities for long-term growth.

Surviving the Downturn: Lessons from Emerging Markets from Sloan Mgmt Review [title self-explanatory]

Three Opportunities to Seize in the Downturn a blog post from Harvard Business Publishing [HBP] makes the case for two points I’ve raised before [a] that there’s cheap talent on the market right now, and [b] there are cheap opportunities to acquire key assets or entire businesses … which leads to the 3rd point, that there will be new winners and losers out of all this.

How Recessions Shake Up Industries in the Daily Stat from HBP [their link takes you to a different article] reports studies from McKinsey and BCG on how industry leaders fall and new leaders emerge in downturns – a reminder for your strategy to be intentional and targeted about challenging specific existing and new rivals, not just trying in some vague way to do better than others [a shortpiece on this at the end of chapter 5 in my book].

Timing Strategic Moves in the McKinsey Quarterly explains how scenario approaches can help avoid moving too soon or too late in these uncertain times. It’s rather focused on macro-economic and stock-market indicators, rather than [I'd prefer a more assertive stance be taken - choosing what to do and when in order to make the future play out as you want, rather than the passive response implied if not actually stated in this.]

Strategic Planning: Three Tips for 2009 from McKinsey Quarterly explains the value of scenario-based planning, the need to intensify monitoring to detect how the recovery is changing things, and the need I have emphasised to look beyond the crisis. [Shame most firms were not doing enough monitoring before the recession!]

Also some good content in Taking Advantage of Tumultuous Times from Monitor.

Full article at Rethink Your Strategy: An Urgent Memo to the CEO.

Much of the advice is generic, and requires much more work than the brief headlines suggest. It also implies undoing much of the foolish activity that firms engaged in during the boom – by cutting fringe activities, shedding marginal businesses, conserving cash. [Where was the advice on these basic principles over the last 4 years?]

Then, as I’ve argued before, look for M&A and other opportunities to rationalise competition to your own advantage – see more on pushing out rivals from chapter 7 of my book.