WIL Europe: Laurence, you are an academic and author with a highly successful career, having received various awards for teaching, research and management counselling. What has driven you to achieve such an impressive career?
Laurence Capron (LC): I did not plan my career; I guess it has been a journey, shaped by influential scholars or teachers I met. Conducting academic research and publishing scientific papers can be a lonely journey and demands a lot of discipline. In order not to let challenges in the academic environment discourage you, I believe it is crucial to follow one’s intellectual motivation and curiosity.
WIL: What would be your piece of advice for women with the goal of pursuing an academic career? What obstacles did you face while building your career and what did you do to overcome them?
LC: In the academic world success does not come overnight and young researchers need to be prepared for a long career path. Therefore, I suggest equipping oneself with two basic assets: emotional resilience and sources of honest feedback. It takes years of dedication and determination to learn how to teach effectively, how to captivate the audience and convey your message. To persevere despite arduousness and painful experiences, it is crucial to have emotional resilience and develop teaching skills through trial and error. At the same time, only constructive and honest feedback will allow you to progressively refine your work. In the end, even though the road can be hard, it is very rewarding to eventually get recognition for your ideas.
WIL: How do you perceive the academic work environment?
LC: The academic environment is very competitive because it is a globalizedmarket. Quality and quantity of one’s scientific output is assessed in worldwide comparison, making it indispensable to constantly generate new ideas in order to stay relevant. This international competition also exerts pressure on educational and scientific organisations. For instance, every academic institute is subject to the appraisement of international rankings, which strongly influences the esteem and attention they receive from their stakeholders, including students, recruiters and sponsors. However, within most academic organisations, there is a supporting and nurturing atmosphere. For instance, at INSEAD we share materials and best practices among colleagues and revise papers together to improve everyone’s work mutually. It helps fostering success and raising productivity.
WIL: You are Professor of Strategy and Executive Education Programme Director, M&As and Corporate Strategy. Can you give us an insight into your lectures, what key message do you transfer to your students?
LC: Many participants come to my course because they want a recipe for successful acquisitions. In many organisations M&As have become a substitute for a growth strategy. This erroneous confidence in M&As often leads to mismanagement. The main message I try to convey my students is that acquisitions should be a tool and not a growth strategy in itself. I advise them to always take the bird’s eye view and evaluate if an acquisition makes sense in the first place. Only then I focus on the correct execution of M&As in terms of Synergy, Due Diligence, Pricing, Evaluation, Post Merger Integration, etc.
WIL: What does teaching represent for you?
LC: When I started my career, I perceived teaching as the necessary evil besides my research. But my view changed rapidly once I realised that presenting the results of my studies in class was the best way to spread my findings all over the world. I thus developed a teaching program (M&A, alliances and corporate development), which is in full synergy with my research activities. Now I perceive teaching as a fundamental and truly rewarding component of my work: not only does it allow me to disseminate my findings, but also exposes me to practitioners’ experiences and this way constitutes an instance of mutual sharing and discussion of know-how.
WIL: You recently co-authored the book “Build, Borrow or Buy: Solving the Growth Dilemma” (Harvard Business Review Press, 2012). What is the growth dilemma and what are the main conclusions you draw to address this problem?
LC: The book provides a simple framework to encourage a more in-depth examination of growth strategies and their combination. A lot of companies opt for one specific mode of growth: either they attempt to induce growth through M&As or focus dominantly on internal innovation. Such companies often stop questioning their growth policies and get trapped inside a loop of repetition. Over time, their unscrutinised and one-sided strategies usually crumble or fail. In “Build, Borrow or Buy: Solving the Growth Dilemma” we give advice on how to pursue a beneficial value generation route and balance the different growth modes.
For instance, companies who want to grow internally often concentrate on extensive acquisitions instead of considering intermediate modes like Alliances, Licencing or Minority Stakes. We encourage enterprises to mediate multiple and alternative ways of growing in order to ensure steady value accretion.
WIL: Your current research focuses on Mergers and Acquisitions. What are the main advantages/drawbacks of M&As for a company’s growth?
LC: The key risks of acquisitions occur during the post-merger integration. Other hurdles arise due to the Pricing, the Management Assessment and the Due Diligence. Companies often make acquisitions to tab new sources of capacities and knowledge. The challenge hereby is to avoid a post-acquisition trauma undoing the beneficial effects of the acquisition and integrating the human capital in the most optimized way. In many cases it would be easier and much less risky to choose alternative ways of human capital accumulation through Licencing, Joint Venture or Minority Stake.
WIL: Last year WIL was focusing a lot on company value and growth and you spoke at the WIL Bi-annual meeting in London, December 2013 on the panel “How to determine a company’s true value”. As an expert for enterprise growth, how do you perceive the value potential of intangibles for a business? And how could companies integrate CSR into their growth strategy?
LC: Intangibles are a highly important, but also the most challenging part in acquisitions. When buying a firm for its intangibles, an estimation of the brand value is necessary. However, measuring intangibles and foreseeing its future development holds high uncertainty. This is also due to the difficulties with post-merger integration, the second big risk with intangibles.
What I usually recommend enterprises in the face of a risky intangible purchase, is a sequential engagement: leaving the target independent at first, pursuing a step-by-step integration which allows more monitoring. When trying to get into an unfamiliar market abroad, a company can ally with local businesses, venture capital or minority stakes, or open a window of observation before gradually upgrading the engagement within the target ecosystem.