How can you identify and mitigate deal risks during execution?

1 Assess the deal objectives and scope

Before you dive into the execution phase, you should have a clear understanding of the deal objectives and scope, such as the valuation, structure, timing, and rationale. This will help you align your expectations and priorities with the other parties involved, such as the target, the seller, the advisors, and the regulators. You should also review the deal documents, such as the term sheet, the letter of intent, the due diligence report, and the purchase agreement, to identify any potential gaps, conflicts, or contingencies that could pose a risk.

3 Communicate and collaborate effectively

A key factor in managing deal risks during execution is effective communication and collaboration among all the stakeholders involved. You should establish regular and transparent communication channels and feedback mechanisms to share information, updates, issues, and solutions. You should also foster a culture of trust and cooperation among the deal team and the other parties, such as by creating a joint project management office, setting clear expectations and milestones, and resolving conflicts constructively.

4 Monitor and control the deal progress and performance

Another important aspect of managing deal risks during execution is monitoring and controlling the deal progress and performance against the agreed objectives, scope, timeline, and budget. You should use appropriate tools and methods to track and measure the key performance indicators, such as the deal value, the synergies, the costs, and the benefits. You should also review and report on the deal status and performance regularly and adjust your plans and actions as needed to address any deviations, issues, or changes.

5 Manage the post-deal integration and transition

Finally, you should manage the post-deal integration and transition to ensure a smooth and successful handover and realization of the deal objectives. You should plan and execute the integration and transition activities, such as the alignment of processes, systems, culture, and people, to achieve the desired outcomes and benefits. You should also manage the post-deal risks, such as the retention of key talent, the retention of customers and suppliers, the compliance with regulations, and the mitigation of any disputes or claims.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?