The Evolution of M&A Functions

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I'm doing great. Thanks for having me here. I'm looking forward to this. This is my first live stream, so I feel like I'm finally joining some club that I should have been part of.

Thank you for taking a break from doing deals to have this conversation with me. Can we kick things off with a little bit about your background?

I've been at autodesk for almost 20 years. That part is easy. Before I joined Autodesk, I started in the tech MA Banking industry in San Francisco. A little bit of the dot com boom, which was a lot of fun as a junior person. Hey, this is really exciting. Things are going really well. And then a whole bunch of the dot com bust, which was just awful and miserable and taught me that I don't want to be an investment banker for the rest of my life. Around 2003, I was lucky enough to find Autodesk right as we were standing up their initial corporate development function. I joined as an associate in the group and just kept going. Took over running the group about a year and a half ago or so. It's been a great ride.

Wow. So start with a banking career, made the transition to corporate development and went along this journey where you, you gotta see that function get built out, mature, and then now to the point where you're leading it.

Every once in a while I think, oh, maybe I should have switched or done something different. But I've just been very fortunate. Autodesk has been a terrific place to work. It's been a terrific place to grow a career. And it's just kept changing and evolving and kept keeping me engaged, interested, et cetera. There's been a bunch of different phases and right now I'm just in the latest one and we'll see what's next.

That's where it may be interesting to have this conversation. I've seen a number of companies in the past years that are standing up an M and A function. You're seeing more and more companies do a pre IPO. Now, essentially it's like a prerequisite to go IPOs to have some kind of M and A function bubbling. But then what's ahead? Because when you talk to a lot of those practitioners, it's a lot of figuring things out as you go. There's not a real playbook on this stuff and that's what I'm hoping to get out of you today. So maybe we can talk through your experience. How have you seen M and A function evolve over the years?

Like I said, I joined Autodesk when we were first first building an official corporate development function. So this was like I said, 2003. We were a 20 year old company at that point and we had always been acquisitive. We'd done lots of acquisitions, but they had been informal or done by various people. There wasn't a formal function. Right before I joined, they decided to make the investment and hired a VP of Corp Dev and started building a team around it. So I was lucky enough to join then. The initial phase was very much around just kind of the internal investment banker type role. We weren't deciding what deals to do. We had a voice, but maybe not really right, more just hey, the strategy, the product team's executives, they want to do these deals. We're not going to hire bankers, just go in and get them done. We did a lot of that and I got a lot more deal experience on that standpoint than frankly I had during my banking days. I did a handful of sell sides on the banking days and a handful of buy sides, but there was a lot of downtime in the dot com bust, a lot of pitching. I got very good Excel PowerPoint skills at the time. They're pretty rusty now, but I built them out and put them to use just doing a whole bunch of acquisitions. So the kind of first phase of my experience was just lots of deals. Learning how you get a deal done internally in a corporate environment versus a banking environment. Learning how the company works and how you push things to resolution and to conclusion. Learning about the culture of Autodesk and how you lead through indirect authority and influence and those sorts of things because I didn't have anybody working for me. But I had to try and get all these people to due diligence and sign up on stuff and create slides and get the deal done. So there was a lot of that and just learning to partner really closely, right? Learning what works, what doesn't work from execution standpoint. So that was phase one for a few years.

So phase one transitioning from the banking and the experience. Could you help me clarify what did you see as the difference between banking in terms of deal experience as a banker versus a corporate development?

The whole reason I wanted to make the shift, which is what a lot of people do is hey, you want to be part of the decision making. You want to take away the inherent conflict of interest of getting a commission on whether you do the deal or not. And frankly, I wanted to be at a company long enough to see if my suggestions or ideas panned out and were successful or not. I wanted to see if hey, I could live or die by the deals that I recommended. It hasn't gone exactly that way, but that's the approach I've taken. If I'm advocating for deals that we do and they all suck and destroy value, maybe I should go find a different career. So luckily it hasn't turned out that way. But that was really a different mindset going from hey, I'm just trying to get a deal done and move on to the next one. And I know not all bankers do that and I'm not accusing them of that, but that's the business model to hey, I want to be part of the long tail here. I want to be part of the whole tail, frankly. The pre tail, all the strategy stuff, the evaluation, the scoring different targets, the conversations and all those sorts of things. And then the long tail around the integration and actually achieving value, those sorts of things. That was what attracted me to the buy side overall. And that's a large reason of why Autodesk has been a good spot for me for the last 20 years.

And you said part of that was learning to lead through authority, indirect authority.

Yeah.

Tell me more about that.

How do you influence people to help you out and do what you want to do? Especially where it's not necessarily part of their day job. It's a constant battle. I'm sure there are corp dev folks here that understand this. Well, this isn't part of my day job. This is incremental and trying to convince people that we've been doing deals for 20 years, we've done them for the last 10. You've been part of lots. It's part of your day job at this point. This is how we do things. That's a piece of it. More importantly, just. And this is an Autodesk specific thing and I'm sure it's part of every company, but we're not one of the super top down driven companies where the CEO, the chairman or the private equity owners say go do this deal and everybody just gets in line. It's an old school company that's got lots of matrices and those sorts of things. And so try to figure out how you navigate the intricacies and get stuff done. Convince people that it's in the best of everyone's interest and be empathetic to what their issues are or concerns are and how can you help them get their job done to ultimately get the right outcome for the business. So that was that learning process. It kind of fit well with my personality, which probably why I stuck around. People come in and they're used to that sort of command and control approach and doesn't fit that well within Autodesk. They tend to not last too long.

What was the volume of deals you were doing in the early years?

We went on a bit of a tear. I think the max we did in that timeframe was 12 or 15 deals in a year. Now, that included some very small acquisitions, some IP purchases type stuff. But there's a lot of deals. It wasn't just me. There was a person running the group, There were a handful of directors, There were some other junior people. It was a proper team. We did 12 or 15 deals in one of those years. 2007 or eight or something like that.

You know, I know in a prior conversation we were breaking this down into phases. And this sounds like the one you described. Phase one of acting like a bank.

Yeah.

When you're essentially really building the mechanics to do essentially what the bank does in house.

Yeah, that was it. And as a junior person, I was still the deal junkie at that point. So it was a ton of fun. We were doing deals all over the world and getting to travel. My wife still makes fun of me. We were doing a deal. The company had two offices, one in France and one in Poland. And I told her, I'm going to Poland. And then right as I walked out the door, I mean, actually I'm going to France. And ever since then she's going, would you work for the CIA? What's going on? What are you doing? So, yeah, it was great.

What did the next phase look like.

That was really cleaning up all the mess that we bought. It was building an integration practice to support all this stuff and figure out how we actually get value. The deal guys buy value. The integration people, I shouldn't say guys. The deal people buy value. The integration people create value. And I know some deal people, they just can't be bothered. They have no passion, they don't care about it. That's fine for me. I always viewed it as part of what I wanted to do. So during that phase, I spent a little time running the group while someone was on an extended leave. And so I got pretty in depth exposure to what was going on. I was part of the initial building out of functional Playbooks and building the team. We did a larger acquisition, a company called Alias. It was bigger for us. I forget. I think it was 60 or 80 million in revenue. @ the time, we were less than a billion. Not a huge deal, but it was like a decent size. We did a full integration on it. We defined Playbooks. We got consultants to come in and help us write everything out and make it an official process. So that was phase two, building out the integration function in connection with the execution side of the group.

How far into building this M A function do you start? Getting to that point when there's a clear realization we got to rethink how we integrate companies.

It was pretty soon. It was definitely not a sequential process. There was a lot of overlap. Things were going on in parallel. It's kind of obvious, but it's also. You don't know what you don't know. When you get into it, you kind of think integration. Oh, we started with the IT people, I think. And then we realized that, oh, this finance stuff is pretty hard too. We should probably get someone in finance. And the HR stuff is difficult. So we had to convince the HR team to hire someone to be full time and support all these things. And level one or beginning level, what's the bare minimum we need to do? We just need to keep the wheels on and keep the lights on, et cetera. And then over time, you evolve it. Hey, this isn't good enough. We can be better here. We can do more things and culture integration or those sorts of things. It's easy to recognize the need. It's a lot harder to build out the support and the teams and the capacity.

I take it that's something that also evolves over time.

Since I took over the group, I've been spending more time on integration than on the deal side than I ever have in the past. It's important and it's something I'll work on. I'm probably swung the pendulum a little bit too far right now, but I'll go back eventually. We're trying to do some stuff to uplevel where we are and to make some bigger improvements that we think will position us for more success longer term. And it just needs some care and feeding.

When you look at the overall M and A function, you have this first phase with building out the capabilities essentially of a bank. Second phase, building out your integration muscle. What's after that next phase for us.

Was really going back to the first piece and moving beyond just executing the deals that we were told to. And it's forming a thesis or a strategy of your own, trying to advocate for it, going out and meeting companies and having a position and a point of view and pounding the table and say, hey, here's what we should do. We think this makes sense and not just relying on other people to make those decisions. And we don't have strategy in our title and we're explicit about that. We're not in charge of this, but we think we have a voice and a point of view that's relevant and should be part of the discussion. And so it was really building out that. And the impetus for a lot of that for us was our expansions beyond kind of the core work that we had always done and the core industries and customers we served. And as we started to explore mobile and even some social stuff, we had some consumer stuff for a while. We had these areas where there's deep expertise inside Autodesk around what we do. I'm never going to out domain some of these people on what they've been doing for 35 years, but they may not know that much about mobile at the time. For example, they've been doing desktop stuff for all that time. And so it provided an opportunity for us to get out and spread our elbows a bit. That was another one of these evolutions that I talked about. It kept me interested and engaged and excited. And so that was. Phase three is building on what we had done to try and provide more strategic insight, value upfront and to be more of an external voice internally. To turn the mirror on our desk and say, hey, here's what we say, but let's look at it practically, like maybe we could be more critical of ourselves to make ourselves better, basically. So building that muscle.

Yeah, it's some kind of like strategic vision that you're expanding on or helping amplify, essentially.

Yeah, exactly. And trying to take an external viewpoint that maybe other people inside Autodesk won't easily access. We're talking to startups, we're talking to investors, we're talking to bankers, we're talking to competitors, maybe potentially more. It's another angle to bring on the problem you're looking at.

Okay, I wrote down amplify, slash, expand strategic views.

Perfect.

What's phase four?

For me, phase four was taking over the group and growing into leadership and getting beyond that sort of stuff. The real thing we're working on phase four is this kind of next evolution of the integration function that we're talking about. So deal side integration that's been taking Up a ton of my time for the last several months. Plus around the We've got the basics, we've got the foundation, but we're not getting all the results and the impact and the benefits that we can. So how do we connect these things more effectively and drive more value out of the deals that we're doing sooner and with more confidence?

Connect the gears. You've been part of this M and A function and you've seen it from different angles. You've progressed your career within this function, I get the opportunity to lead it. What were those big initiatives that you had?

We're still a company and I still have a boss. And I had big visions around building a bigger pipeline. And we're $5 billion company, roughly now we need to be a $10 billion company. How are we going to get up there? And the executive like, yes, that's great, but first fix this integration stuff and then we're going to build on that stuff. It's a bit of both. But my big things were building on all the stuff that we've done, the work around being an effective team, getting deals done, knowing how to do at least the basics of integration, having a strategic viewpoint to try and make a bigger impact on the company. I have a shadow pipeline of my own where I've got deals that I think we should do and that have bigger revenue and that, frankly, some of the executives are. Executives may totally disagree with, but I'm going to keep them on my list and take the opportunity to make pitches, et cetera. Those are some of the big things. And then really, ultimately, now I have no excuse for why we're not driving the right value through integration. There's no one preventing me from taking the right things to CEO, staff or to whatever executive I need to and say, here's what I think we should do. At the end of the day, I might not be able to tell them what to do, but at least I made my point in my pitch. And if they decide to do something else for competing business reasons or whatever, can at least stand by the fact that I'm doing everything I can to try and drive the most success from these deals.

How has the strategy evolved over time?

At the end of the day, in my mind, people think of strategy sometimes, or at least maybe when I was more junior, I thought of this as this scary thing. How do you do strategy? It's the wizardry or sorcery. How do you make it work? And the more I've done it, the more I've been just dumbing it down and making it simpler and simpler. The mindset I take with any sort of strategic document that I'm working on with my team or a pitch. You shouldn't have to be a PhD in these things for it to make sense. Our board of directors, they meet whatever four or six times a year. They know our business. They're not PhDs in our business if they can't understand it like we're doing something wrong. That's maybe more of a personal thing, but it should really just be common sense. It shouldn't be that difficult. And unless you're doing landing rockets on Mars or whatever, for most of the stuff we do, it should be straightforward and basic. That's the personal evolution we've seen. The other thing we've seen is just companies used to. In our space at least, they used to be much more in their spheres of influence, and we've just seen much more blurring of the line. So we've had to really expand the way we look at strategy across industry, participants and competitors, et cetera, around how people could enter, exit, compete, play. It's more interesting, it's more fun. It's just. It can get more complicated and have to keep a lot more company names in your mind than I had to 15 years ago.

You had a method for doing that. I feel like that's a whole task of its own.

No, there's no secret sauce for that. I take a lot of notes and then I try to spend some time every day to keep them a little bit organized and put them somewhere where I can find them in the future. Because, yeah, if I don't write it down, it doesn't exist. I don't have a perfect answer for that. I do spend as much time as I can getting ahead of what I need to do in the future. So just getting organized. Start the year. What are the things I need to do this year? What are the big rocks? It's not just goal setting, but it's more. Am I looking at the most impactful thing and trying to stay organized? And I had a person on my team recently say, oh, you're very organized. It's very great. I was like, oh, that's a huge compliment. So I was pleased that came through because in my mind, I feel very disorganized. So if I can at least show that I can remember stuff and be organized, that's great.

You score opportunities or keep them in some kind of like, descending list of priority.

So, yes, there's always tiers high, medium, low. We're Also trying to build a bit more quantitative aspect into it. So we've been doing scorecards and charting things based on different criteria, strategic versus financial stuff, and seeing how they plot. The criteria is subjective going in. So it's not like deterministic tool that this is the number one deal. But if you pick the right criteria and it's not too many pieces, you can compare deals just much more effectively. And things like, hey, is it the most important strategic thing? How difficult will it be to integrate? Is the business model consistent? Can we drive high synergies or not? Some of those sorts of things. And then it gives you a framework to compare the company. So you know, you could do it with Harvey Balls. We've been putting stuff on charts lately and plotting them on an X versus Y type thing. But yes we do. And it's a tool to use. It's not like I said, deterministic. It's not answered. But it can help facilitate the right conversations if they're done right.

Yeah, I like the idea. It's breaking it down into some key characteristics that you can actually compare deals with each other and. And maybe that helps to prioritize as well.

It's all about the conversation and the thinking and trying to force people to think about things with some level of consistency. Every deal has their unique pieces and they also have some of the same aspects. Trying to have some level of comparing apples and apples even though we're not just doing that.

Thinking back to the organizations pretty early in staying up at M and A function, is there anything you can do to speed up the evolution for efficiency?

No, I probably don't have a silver bullet there other than having executives that really care about it. We always had executives that cared. But one thing you don't appreciate, or I didn't appreciate as a junior person in M and A function is the executives have 50 things to worry about. I think M and A and deals and strategy all the time. They might think 50 different things every day and can't expect them to come with the same level of attention to detail and care. And you have to help get them there. Having an executive that buys in is looking for leadership and you can help tell them how to support you to move it quickly. That's something that probably could have moved us a bit quicker. In some of the areas, people tend to not be able to choose their executives. So you might not be able to influence that too much.

Fair enough. Is there anything else that could be a potential thing?

Practice. Be critical on yourself and the function. Don't hide the ball or sugarcoat everything around how things are going. Be accountable to yourself. Drive accountability with the other leads standing up, functional leads quickly. That was something we did. There's the nuts and bolts that you have to do. We were very slow and ineffective before we got functional leads in the right functions that we could have. Go to people. It started as designated people. You go talk, talk to Brett in finance, he'll help you out. But then eventually Brett becomes a full time person and eventually they get some people underneath them and then you start to build scale and repeatability and you're not starting from scratch. So yes, like that was a very helpful piece on the Big Deal. Using the big Deal as an opportunity to actually define playbooks and forcing people to actually go and document a playbook. Like lots of people would say, oh, we've got our playbook. And I said, great, show it to me. They say, well, it's kind of in my email and it's in my head and it's like, no, no, no, everyone's going to have a playbook. It's going to have these five chapters or pieces or whatever it is and then everyone can see them and people can start to understand, oh, HR is doing that well, the finance better need to think about doing this at the same time and you start to build that piece of it. So those were two very important pieces, I would say.

It seems like those are the key parts. Building your muscle for diligence and then integration. When you mentioned even early on the challenge of working with the functional leads, getting their attention for it, was there any approach that worked well? Did you emphasize the importance? Like, look, we're dropping $80 million for this company. It's a big deal. How'd you have to go about that?

You kind of have to learn each person and how the best way to interact with them is. I was a junior person at the time and so I would just go in and be open and transparent and maybe vulnerable and say, we need to get this thing done. Help me. You're the person. How else can we do it? It's important and those sorts of things and appeal to, hey, we need to get this thing done. Let's try and do it effectively. And yeah, for sure. You have to highlight the importance of the business or highlight that, hey, the CEO staff has a review on this date, we need this input by then get it to us and have it make sense type thing. One thing I probably did too much is just do other people's work. I didn't do finance Diligence when it came to presentations or reporting. You just wind up doing some of that for sake of expediency. That's probably a skill or not a skill, but a something I did too much of when I was junior and I'm trying to break that habit and hold people accountable to do what they need to do and just report on it as opposed to get it right all the time.

Was there anything that you did in terms of getting the functions sort of lined together more cohesively as a team as opposed to just independent resources?

We do off sites, we try to do events, we try to get people to talk about things that are other than M and A. It just builds some empathy and some group cohesion. We try to bring them on board that, hey, we're on a mission or a quest to do this piece and we need everyone's support to do it. And whether you're doing the accounting integration or the technical integration or the revenue whatever it is, we're all part of making this successful and we should be feel joint accountability for the overall success of the transaction. And we try to report and try to connect what they're doing with those value drivers and success metrics explicitly. It's not easy and not all functions want to hear it all the time, but yeah, we do those things. There's a big group of people that do this work and that's great. We're also trying to cultivate, hey, who are the key stakeholders that we can start to elevate and get them to think about things more strategically, get them out of the weeds of the integration, project management, and get more strategic around the decisions. We're making issues we're seeing making things better because ultimately I think that will provide you better results, but it'll provide better engagement and work satisfaction and intrinsic motivation and all those sorts of things. So we definitely do it explicitly. We're okay. If anyone has great ideas, please send them to me.

That sounds key in terms of building the integration muscle. Sounds like this stuff is all initiated through corp dev, those off sites and things like that. You're actually driving those events.

Yeah, take a step back. Everyone wants it. But when I came into the role, lots of people said, hey, we need to do this. We've done it in the past, so it's been on our radar for a while. We're not dragging people there kicking and screaming and then we're balancing getting input from people. What do you want to accomplish? What are the needs that you see that we have versus some of the stuff that we know is important and that we need to get done. And it's the beginning of a conversation, not the end. There'll be regular pieces and there's regular interaction and team building and all that sort of stuff.

How many different business units do you have?

The way we're set up, we have really four kind of product groups in industry groups. It's aec, architecture, engineering, construction, it's manufacturing, it's media and entertainment. So that's film, visual effects, animation, Pixar, movies, those sorts of things. And then we have a platform product, technology team that does a lot of research and forward looking stuff as well. Those are just product strategy, marketing. They do not have sales. We have one central sales team for everyone. So they're not really business groups the way some other companies might do them, but those are the for industries that we serve and on the deal side in particular, we partner with as they grow their strategies and identify targets. And we're intimately involved in that whole process.

When you started, were there four groups or were there less than four groups?

Maybe there were five at the time. And they've merged and changed and split apart and kind of different things over the years that we've had.

That's fun stuff that happens. That's a whole other story. What I'm trying to get a sense is how your corp dev function is structured today because you have your corp dev team, which is roughly how many.

People on the deal side. I've got two directors and two associates, so it's not a big team. And then another couple people on the integration side.

We like nimble teams here at M and A science. They're the ones that do the best deals. And then you have a dedicated integration team or no.

Yeah, the two people. So the structure we have is a business partner on the deal side. It's a business partner approach. So each industry group, they have business partners, whether it's finance, hr, legal, that are part of the executive staff. They're part of every conversation. They're not just lawyers or finance people that talk about that. They're part of the executive staff for that industry group. Each industry group has a corp dev person that's on there and that participates fully in that. That's where the initial strategy discussions happen. There's lots of other places they happen. That's where the industry groups are reviewing pipelines, helping to prioritize, getting input from the product teams and strategy teams and other folks around, hey, what's most important for this industry? And then we as a team view that collectively across all the industries and make it work. So that's the approach we have. It's different than what it was when I came on. When I came on, like I said, we were kind of the internal banks, you know, we were the example. We use a short order cook. We're the short order cook. Throw it up there, we'll cook it up and put it back up on the shelf. And now we're trying to farm to table. Hey, we're part of the initial conversation. We're all the way through to the end and even beyond.

And then there's a corp dev resource in the bu.

Yeah. Dotted line into the. You basically they report to me directly. But those people that give most of the review information, they join all the staff meetings, they go to the off sites. Yeah. Do all that stuff.

Why'd that happen? Because this is interesting because like I said, they're all structured different.

Yeah. Well, it was an evolution. So when I joined, there were people in the divisions that were called business development. They didn't really do business development. They basically did corp dev, but they only did the upfront strategy, target identification and that was it. And then corp dev did everything. Passed. Then we did the valuation, the negotiation, the term sheet, the diligence. We did all that stuff. Right. That relationship was not super helpful or functional. It was a legacy of something that was before my time. So I came into this environment and then ultimately, I don't know, maybe 10 years ago, we combined those. A bunch of people had left and they made the decision, they combined those, but then they centralized them under corp jab with this kind of business partner model. So that was how we got there. And frankly, this approach definitely cause strife because these people, the business units sometimes want to do stupid deals. Right. And we're trying to say this deal doesn't make any sense, we shouldn't do it. We're overpaying. It's not going to do what we want to do. But the end of the day, we were there to be the bank and we got in line. But now it's much better. The end of the day, we're not the ultimate decider. We have a strong voice. Executives want to do a deal, we're going to go help them get the deal done. But we have a much stronger voice in this scenario and bigger seat at the table and stake in the conversation.

What about the accountability at the corp dev person in the V unit? Are they still running it through close and handoff or are they involved with integration to see through that part?

They're involved. I would say the expertise and history of both of the folks that I have in those roles right now is more on the deal side. Getting to close. We bring the integration team in very early. They're part of all of the diligence conversations. They start interacting with the BU or the division execs rate when we get to a term sheet, even before to start thinking about what are the big rocks, what do we need to be focused on. And then ultimately the evolution that we're working on is that becomes a slow transition. It's not this hard and fast. Hey, the deal's done. Integrations are off and running. The deal side is focused during the early phase of diligence, et cetera, and the integration people have a smaller impact and then that kind of grows over time. You get to close and you're kind of ready to go. Lots of what the deal folks appreciate that at Autodesk it's not just about getting the deal done. We care about the decisions that are made. We care about the assumptions that are made, the product and go to market. Integration decisions impact the revenue plan, which impacts the success metrics, which impacts what everybody cares about. It's very much a group effort. But the deal folks do tend to drop off a little bit after close and go working on the next deal. They do still stay involved in some of the reporting and connected to it, but not in the day to day of integration.

Then keeping those integration folks in the loop about the decision and really part of that deal early on. So they're part of the mission. Are there any secrets to doing that? Let them in the room, include them.

On the invites, get them in there. The thing that we're really doing is getting our leads and most importantly the I have a new person that's running integration for us. He joined maybe six months ago. @ this point, getting him to embrace and what I'm telling him is, hey, our vision should be the integration is a strategic advisor to the executive around what they want to accomplish. This is not a reactive, passive activity. It is a forward leaning and strategic advisor role to the executives. If you want to achieve this, here are the things you should do, here are the things you shouldn't do. Here are the issues that you should be worried about driving. Being proactive, being directive with the teams around. These are our standards. You have to hit our standards. And we're going to talk to the executives and confirm why and we're either going to say yes or no, just being much more directive and proactive. And it's Also up to the integration leader to some extent to force himself to be relevant and force his way in there and force decisions to be made early. Because I do think that one of the worst things you can do with an integration is just keep delaying and say, we can't talk about this. We got to sign. We can't talk about this. We've got to close. We can't talk about this. We've got to get this first thing done. You have to have the conversations early. And someone I admire made a statement I really like. I can fix a bad decision. I can't fix no decision. So just make a fricking decision and then we can move forward. That's a lot of what we're trying to do.

That's a whole thing of its own with all this integration stuff. It's huge volume of decisions that need to be made. Is there an approach to it? Is there a framework that you agree on, or is it just something that becomes part of the culture in terms of handling that to be better at integration?

Yeah, I don't have a great answer for that yet. And that's one of the things I'm asking my team on. It was just like, I don't want 1500 lines smartsheet. That's not useful for me at all. And frankly, I don't think it's useful for anybody. Maybe somebody somewhere has to confirm that all this stuff gets done. We need a framework to talk about things at a level that makes sense to executives. Kind of back to the strategy piece I discussed. Like, you can't look at this and understand what's going on. Then we're looking at it in the wrong way. We're trying to up level the way we talk about integration and the decisions that need to get made in a way that is more intelligible and can't just be this 900 line thing of stuff that takes two hours to go through. What are the big rocks? We have to rely on some of the functional people to just execute the job below that can and know the right thing to do once we set the higher direction. So that's what we're trying to get to. It's a work in progress. We're not there yet, but we're moving the needle.

Okrs. Have you heard of okrs?

Yeah, I've heard of them. That's part of it for sure. Trying to balance the desire of folks to make sure they have every I dotted and T crossed versus okrs, Bigger objectives, big rocks. What are the key decisions? And this is Where I think the creativity and the strategic advisor piece of integration can come in is what are the big rocks that we should care about with this deal based on what we know about the company, what we know about the buyer, what we know about, what it takes to integrate, what are the things that we should be most focused on pushing those forward. To me it's a lot more fun because you're having real conversations. You're not having conversations around oh, we're 79% done. 79% of what? Of everything. Something less of a thousand I care about. Is the channel activated? Is quote to collect integrated? How do we get at that kind of level in a way that's more useful to execs?

At least it rings well on a very small scale is what I'm working on internally is like bridging okrs to the actual task so you can follow the chain all the way through and then you can jump in the middle where you need to and click down when you need to. Can we talk about governance? I'm curious how you've seen the governance model evolve over time and we got different layers of governance, I guess, right? Because we got overall go no go decisions to are we creating steering committees for these deals and things like that.

We've bounced back and forth, right? We've had committees which are subsets of CEO staff and a few other people. We've had at everything as the executive sponsor and they do everything and they're the decider. There's trade offs with everything you do. What we're focused on now are setting up the right kind of steering committee that can provide governance inspection, decision making without being a ton of bureaucracy and making sure that we have the right people there and for the right deals, like some deals. I'm just going to say this thing doesn't need a steering committee. It's too small and it's not. There's not going to be enough to talk about everybody month, right? So we're just not going to do it. If it's important enough to do. Everyone needs to make a commitment and that's where we're going to drive the accountability and making sure we have the right folks there. I think we're doing okay on that. It's better than sending out dashboards that are out of date and unintelligible or where you can't really tell what's going on. So we're forcing people to have the conversation and building the expectation that this is going to be the nexus of accountability for these deals. So that's what we're doing now, early signs of success. We don't have the full playbook built out, but I think it's best practice and I think you need to have some kind of written down governance people can rely on and become accustomed to. So that's what we're doing now and.

It evolves and changes. Do success metrics change or are they very much derived based on the deal itself? Do you or sort of think of like a general framework overall?

Yeah, we generally have probably the standard ones that most folks have, some sort of top line, some sort of customer or go to market type thing, some product type goals, people goals, integration goals, et cetera. So those are the main buckets that we'll look at and then we'll pick and choose based on what's relevant. What we're trying to get to now, and this is one of the evolutions we're working on, is making them less of a report card that comes out at the end of the quarter where you get to see oh was I red or yellow or green? And then you have arguments around is 89% red or is it yellow or whatever. And by the time everyone sees it, it's out of date and to everyone sort of knows about it anyway. Making the steering committees the place where people are really looking at the tracking of the efforts, whatever it is, whether it's top line or product or whatever's most important and more importantly the forecast and are we on track the time to make decisions that could impact their trajectory versus just saying like did we do well or not? We'll always have some element of the kind of backward looking, hey, we got to say how we did last quarter, but there's not that much you can do with that except either pat people on the back or make them feel bad. I'm much more interested in the conversations that have a view on the forecast and what we can do going forward. So we're trying to make them more forward and backward looking, drive the right kind of conversations. And it's been sort of the same as the steering committees. We're seeing success so far we're not done, but we've seen it driving the right kind of behavior and engagement with folks, which is really the biggest thing I was looking to achieve.

That's a whole topic to unpack of its own when we look at these opportunities to improve as you go. It's interesting how you're very candid about there's still things in the works, you're still learning and you're still improving And I turn around and talk to somebody at Cisco with 200 plus deals and still the same narrative. They're still improving, still working, working on it. Have you identified any approaches or methods to help with the retention of learnings, deal by deal, to be able to build off of those things?

We do postmortems, we try to share everything with the teams. We're getting back to documenting playbooks and trying to have more stuff documented that we can then go back and look and say, did we change this? Did we do what we say we were going to do? Are we on track or not? Some of those sorts of things. But no, I probably don't have a silver bullet for. Here's how you get every Merdy Bates into what you you do. Some of it comes down to just pattern recognition and being part of these things for over years and being able to raise your hand and maybe have an uncomfortable conversation that, hey, I think we're doing the wrong thing here or we're on the wrong track or we really need to think about doing this a different way. So I do advocate for my team and I try to model this behavior of throwing ourselves in front of the train. The deals can take on a momentum of their own and so can the integration plans and so can other pieces. If, if we don't raise a voice or make a point, maybe no one else will. Trying to do that and bring that forward and make that part of what everyone feels comfortable doing. Not everyone has access to the brake handle on the train, but at least you can try to have an impact.

Keep a lot of dialogue going and have the tough conversations. And that's probably one of the key things. Yeah, it's definitely a tough one because even if you document a bunch of things, how do you get people to look at the documentation?

Yeah. And then people leave and you get someone else coming in and you have. Yeah, it is tough and we'll do the best we can.

How about the hiring process? How has that evolved? I can imagine the standard is you start off hiring ex bankers de facto. Is that still what you're doing today in 2023?

I haven't hired anyone yet this year, but we'll see. Hopefully I will. Yeah. I mean, the junior people, we still do look at that. The experience you get as a junior banker, as an analyst or an associate around just the stuff that we need to be able to do. Models and comps and company comparisons and decks and all those sorts of things. We've hired people that don't come from the core M&A banking background, and you can train some of that stuff. But it's a steep learning curve if you have none of that experience. And especially. But given that most analysts do two years of work more or less in the year they're there, they're well trained, so we tend to focus on that. I'm less worried about that for the more senior people. They need to be able to interact with director or with executives, operate with indirect authority and ambiguity. They need to be able handle those sort of skills that they need to be able to handle. They need to be an effective advocate and ambassador for Autodesk externally to different folks. Those are the things that are more important. But for now, both of my deal directors are ex bankers. That's where it is.

Yeah. I'd be curious to see how that evolves on the other areas like integration. How does that fit in? Is that trying to be as intrinsic as possible, getting folks internally that really know the business, or are you pulling people from consulting firms or just hiring consultants?

We do use consultants from time to time, certainly in some of the functions. In particular across the integration team. More broadly at Autodesk, we have a mix. We have some people that just grew up in Autodesk and they're functional expert, and now this is what they do. We have some people that have done this at other companies. They've hopped around and so they're more of an integration or an M and A expert. And there's pluses and minuses to both of those pieces. The skill I'm trying to hire for now is what I talked about. You need to embrace this strategic advisor, concierge mindset to the executive. Your job is to help shepherd this thing from A to B and to help lead the team. Some integration functions come in and say, well, here's the checklist. Tell us when you're done. And if you're not on track, we'll report you as red. That's not what we're looking for. The teams need to come say, here's where you need to get to. Here's where you are, and here's the roadmap to do that. We're going to help you. We're not going to do all your work. We're not going to solve every problem for you, but we are not going to let you spin. We're not going to force you to chase your tail around. You're going to know what's going on and we'll escalate. When we have stuff that we need to talk about, embracing that strategic Advisor mindset and that kind of, I call it concierge mindset. But it's like the, hey, we're going to help you get there. We're not going to solve all your problems, but we're going to make it explicit so that you're not wondering what's going on. And we'll get decisions business more quickly. That's the hope.

What would the title be for that role?

In my mind, that's an integration lead. That's a functional lead that can do that role within their function. You're on the finance side. Here's where this is and here's where we're going to be fully integrated and all these systems retired. And here's how we're going to get there. And then really, the role of the integration management person, the person that's running an integration, is to help synthesize all of those issues up in a way that the executives can understand and help them make decisions on what's important, what's not important, how should they trade these things off? One of the things that we hear a lot is I had no idea that this decision was made. It comes up later that this is a huge problem or it's an issue and they never heard about it. No one else heard about it. We have to figure out what those are and do a better job of shining a light on.

Yeah, it sounds like the big trend of the industry right now. Everyone's really trying to beef up their approach and integration and maximize the value of deals.

No question. That's why it's taking up a ton of my time and appreciate it's good. I'm very excited to see where we are in a year and how successful we've been.

What are the big lessons learned and advice you give to the early corp dev function? Getting ready to start year one off.

It's more personal than anything else. I wish I had been more outspoken and aggressive when I was younger and more junior. It was not in my demeanor. You get older, you don't care as much. You just get much more comfortable. And I wish I hadn't been as nervous and I had been willing to call more BS when I saw it. People appreciate a point of view. Don't be obnoxious and respectful with it. But yeah, I wish I had done more of that and gotten more comfortable with it earlier. That's one kind of big personal thing that I try to instill in my team as well. You have to have a point of view. If you don't like what we're doing, Tell us what the alternative is and why it makes sense. A lot of times they don't have an answer for that, so they need to have an answer for that. That's one piece. And then the other thing I would say is just be out there, be external. To me, that was the piece that kept it most exciting for me was getting away from just doing deals that people told me to do and getting out there talking to companies, talking to investors, bringing that external point of view back inside the company and be out there and talking and building your network and having something useful to say. But being out there regularly, those are good tips.

And they kind of go hand in hand with each other. Go out there, you want to be proactive, vocalize it internally, Try to stir up some new ideas and actions.

Yeah, exactly. Advocate for a point of view. That's the goal a lot of the time.

Hey, what's the craziest thing you've seen in M and A?

Oh, the craziest thing that I've seen is not really that crazy, but it was the most surprising to me is that we go into these things with a lot of transparency and openness and desire to get things done. All of our deals are negotiated. It's very rare that we're part of an auction. We're getting deals done that we work on together. And so this journey you go through with the seller and oftentimes it evolves over quarters or even years, conversations and getting to know them and seeing them at trade shows and those sorts of things. And then just every once in a while, you run across a bad apple that just exploits that and has engaged in ways that are, if not quite nefarious, are certainly. They were never serious about what they were doing and played us. Building that cynicism and that skepticism is a lesson. It's a bummer about the industry, but it's also. I get it. Everyone's doing what they're doing. So you just have to have some of that cynicism and skepticism around. What's their angle really? Are they serious about this? Are they playing me? Am I playing them? What's going on? It's not that crazy, but that's one of the things that I've learned over the years.

It's like a nature thing. You get a little two face that comes up when you're doing these deals.

You have to be careful with it. We're going to work with these people for years. There are multiple members of our CEO staff that came in through acquisitions. So, you know, Autodesk is the place people stay. We take it very seriously. Maybe not everyone does. The only thing you can tell yourself is, hey, those people that behave this way would never have been successful inside Autodesk. So it's good that the deal didn't happen. Sometimes it's a bummer. I can handle if it blows back on me, but the team and the deal blows up because someone wasn't actually acting in good faith.

Okay, I look for both their faces.

Yeah, exactly.

David, this has been great. Thank you so much. I enjoyed this conversation, learned a lot. I appreciate you helping me become a better M and A Science insist.

Oh, this is great. Thank you. These sorts of things are a lot of fun, so I appreciate the opportunity and hopefully folks had some sort of interest level. And if anyone has questions, feel free to hit me up on LinkedIn. Happy to talk further. Anyway, this is great. Thank you.

No. Cheers. For those of you with us, here's to the deal. Until next time, thank you for taking the time to explore the world of MA with our podcast. We love hearing feedback. Tag us on a LinkedIn post, add a review on Apple Podcasts. We'd love to hear from you. If you need help standing up an M and a function or optimizing one that you already have, we're here to help. And if we can't help you, we probably know someone that can. You can reach out to me by email Kisan K I S o n a science.com or you can text me directly at 312-857-3711. If you just want to keep learning at your own pace, visit mascience.com for a lot more content and resources. That's where you can also subscribe to our newsletter. Again, that's mascience.com here's to the deal.

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