Think Differently: The Sin of Omission

By: Mark Tarchetti

I talked in an earlier blog about my optimism for the M&A market in the next 18 months.? We have been working on several deal projects so far this year, reflecting the early signs of a resurgent market.? It is considerably easier to understand a business now that some of the volatility from COVID, supply chains and purchase cycle disruption is mainly in the rear-view mirror.? M&A is fascinating to work on because you learn so much from seeing many different teams, businesses and investor perspectives.? For many of you M&A may not be highly relevant, but I think we can learn more broadly from some of the current dynamics.? So, what are my big takeaways so far this year?

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Management teams are definitely calmer and more confident now.? They are looking at new uncertainties in shipping rates and tariffs with the wizened eyes of teams that have been through all that before.? There is calm and confidence without any exuberance.? There's an ambiguous read on the consumer because of the haves/have-nots dynamic.? Meanwhile the retail landscape battle between winners and losers has significantly played out.? The winners have won big, and it’s clear who you have to bet on going forward.? The cost and fragmentation of online gets ever harder.? In contrast to this calmness, we are seeing a big hangover from the disruption of recent years.? Big ideas are very few and far between.? P&L outlooks are cautious and finance lead discussions on potential, much more than marketers. This is a canary in the coal mine when it comes to innovation and ideas.? Many pulled back hard in the last few years, leaving a long-term legacy of weak innovation funnels, low ambition in brand plans and a culture of “go steady” rather than “go big”.

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The lack of clarity on the path forward and the absence of big things to get excited about is making it harder for deals to happen.? Investors can easily get stage fright.?? You don’t have to be the smartest in the room to articulate risks and downside scenarios. The absence of the big momentum moves forward creates a negative bias.? As we say in England, people can quickly become “frit”.?

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Investable teams need investable ideas.? Leaders get ahead of the opportunity.? Now is the perfect time for the strongest to break out from your competitors with renewed ambition and innovation.? ?If you wait for all the uncertainties to be resolved, you might be waiting a very long time!? There is enough certainty of what’s changed and where we are headed to reignite your ambition.? Make hard choices prioritizing your best ideas with the most potential.? Back them to the hilt.? Incremental activity may help you maintain, but it won’t help you break through.? This is equally true for investors – prices and competition for assets will only increase.? The most attractive growth spaces will get ever more competitive.? Find strong ideas and focus on how you can catalyze them at speed to lead their markets.? Invest and nurture.?

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We may all look back at this year as a turning point.? Whether you are a brand team rebuilding your growth plan, or an investor looking for the next deal.? The sin of omission may quickly outgrow the sin of commission.? Bring back ambition and make a move first.? It’s going to get crowded.

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