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Toward transaction excellence: The DNA of the corporate development function - EY - Global

Toward transaction excellence:

The DNA of the corporate
development function

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Today’s leading corporations are creating deal value by committing to a disciplined, repeatable and continually improving approach.

Summary: Corporate development is a function. At its head is the corporate development officer who leads a core team known as the corporate development department. Our survey provides detailed benchmarking on typical traits, membership and operating focuses.

The degree to which these traits are in evidence is a critical determinant of success in corporate development. Mere aspiration is not enough. Rather, leaders in corporate development embody these traits.

What are the personal characteristics of the CDO?

  • The most common educational background is an MBA
  • The majority (76%) have been in the position at least two years and usually prefer to stay in the same role
  • They are most satisfied with the range of responsibilities and ability to influence corporate strategy and least satisfied with allocation of resources and work/life balance
  • Abilities as a business analyst and industry experience are key attributes for success

How is the corporate development department structured?

  • The majority (70%) of respondents report to the CEO (42%) or CFO (28%)
  • The median number of FTEs in the corporate development department is four — the median size of the virtual team is five
  • The majority (62%) expect a decrease in headcount over the next 12 months
  • Most (62%) operate without a formal budget

What is the department’s role and how does it operate?

  • Most departments have a finance, accounting or treasury (96%) and (or) strategic planning (80%) professional on staff
  • Support personnel for the CDF are most often found in finance and accounting, sales and marketing and operations
  • CDOs spend 60% of their transaction time on execution and 40% on strategy
  • The key areas in which the CDO influences corporate strategy are: grounding M&A decisions in sound financial data, developing transaction strategy and supporting strategic planning
  • The CDO most often leads and performs planning and structuring transactions, negotiation, opportunity identification and valuation
  • Key areas where CDOs seek help outside of the company include financial diligence, legal, tax diligence and tax structuring

Within the company, they turn to:

  • Legal for help with tax diligence, tax structuring and board and stakeholder approval
  • Sales and marketing for help with opportunity analysis, portfolio asset valuation review and commercial diligence
  • The department is most frequently measured on the fit of deals with corporate strategy, project management and deal pipeline

Traits worth emulating

The era of the ad hoc, episodic approach to transactions is long over. And while progress toward a more disciplined approach is evident, for many organizations there are still opportunities for substantial improvement.

Today’s leading corporations are creating deal value by committing to a disciplined, repeatable and continually improving approach.

The three distinguishing features of corporate development excellence are:

  • Strategic alignment with broader business goals
  • Well-documented transaction processes
  • Close relationships between corporate development and the rest of the organization

While these are in evidence to at least some degree at most companies, among true leaders in corporate development, such traits are thoroughly developed.

By doing more to emulate these leading practices, CDOs and their reports can improve the odds that their work will be enhancing the value of their parent businesses.



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