Imagine being one of 200 passengers on a flight starting the rumble down the runway and readying to launch into the skies. Relaxation comes from knowing that the flight is in the hands of very capable, well-trained and supported pilots. Comfort is found in the knowledge that, although they know their routine, they do not rely on memory and skill alone; they also work to checklists.
Pilots use checklists for two reasons:
- They are trained to do so instead of relying on memory.
- Checklists have proven time and time again that they work.
Over the last 40+ years, aviation has undergone a radical cultural transformation. This transformation has been a critical shift in the industry to where safety has become the number one priority. Checklists were developed for flight crews in the 1980s. Using checklists has made a significant difference in aviation, despite an overall increase in air travel, aircraft accidents have remained on a steady decline.
The most dangerous part of any flight is landing, with nearly half of all fatal aviation accidents occurring in the last fraction of a journey.
As a passenger, taking stock of the situation and relaxing in the thought that the flight is still in the hands of competent and disciplined pilots working through procedures and checklists brings comfort. The landing gear will be lowered, flaps set correctly and airspeed checked routinely, with the plane landing safely on the ground passengers are ready for the day’s business or holiday.
As an M&A advisor, the stakes may not be as high as life and death, but to clients and stakeholders, their livelihoods rely on competence, training, consistency and professional execution of the task entrusted.
Taking clients and their respective stakeholders on the journey to bring about the sale of a business involves ensuring nothing has been missed or overlooked.
Meticulous preparation of business documentation includes working through the financial statement preparation, normalisation adjustments, calculations and preparing for launch.
Every subsequent step in the process, piling on substantial resources by the advisor, the client and their other professional advisors, often amounting to hundreds of thousands of dollars of investment, will be built on and rely on the solid foundation work done at the outset.
When reaching the sharp end of the deal, the financials will sail through due diligence, the business has been accurately and fairly represented and the negotiated price will stand the rigors of audit and extensive analysis.
DMA’s hundreds of procedures, checklists and auto texts make all processes routine, lockstep and consistent across every process.
With more than 75 complex, large-scale sale and acquisition engagements in progress at any time, DMA’s team must rely on its well-trained staff adhering to their long-established yet constantly evolving and improving procedures and checklists.
Even when team members have been working in the business for 20+ years, they adhere to their systems and leave nothing to chance.
Procedures are an integral part of DMA’s daily routine and are updated regularly as improvements are made or new technology is adopted.
These procedures and checklists are very comprehensive and detailed, yet easy to work with and follow.
The financial statement processing procedures alone cover 19 pages, including 130+ steps and 75 sample queries regarding possible adjustment items, plus second and third reviews. All in all, thousands of items are completed and checked off one of the inter-linked checklist items before a project is finalised.
By having and adhering to detailed checklists and procedures from the outset, nothing is left to chance, missed, or done erroneously. Using these well-established protocols, the scope for mistakes or missteps is very low and the team proceeds with confidence.
It is exceedingly difficult to retro-install such systems into an organisation so they become the backbone of all activities. It is a much easier path to have these built in on establishment of the business. This culture has pervaded in the DMA team for 25+ years and all new team members quickly learn to appreciate the importance and uncompromising requirement to work to and maintain these systems.
These procedures extend to every incoming and outgoing email being saved to the central CRM/database, which forms the hub of all communications and processes. Client projects are managed through every one of hundreds of steps and sub-steps in the process assigned to each project and signed off by those completing the step.
In some instances, on arrival at DMA, experienced accountants and others may need to ‘unlearn’ habits acquired at other professional offices, including many of the big-name firms, where there has been a free-for-all on how things are done and accounted for.
DMA presents a significantly different world for most of them and they quickly understand the benefits of such a tight and coherent operation and learn to change their thinking and mindset of the standard to which they need to work so they do not let themselves or the rest of the team down. It can be a revelation as to how well things can operate once such a high standard is culturally welded into the fabric of the business.
Back on a flight – this time the going has been tough, gusty wind, in a fighter aircraft setting up for a night landing on a carrier’s deck heaving in high seas. Calling the ball and working hard to bring that baby home. Just need to know that the checklist included lowering the hook!
In M&A, there may be a few curve balls thrown up unexpectedly, and the going may be tough in stages. But safely through processes in place, clients safely land into retirement or into their new business venture, employees, customers, and suppliers all settle into the new regime, and it is back to business as usual.
