5 Questions for Kayla Davis on Becoming the Head of M&A 03/30/2021

In her nearly nine years with the company, Davis has progressed through a variety of roles that have included accounting, FP&A and transformation. A common theme throughout her career has been the appropriate use of data and information, a topic she spoke about at AFP 2020 with Megan Weis in the session: Data-Driven Decision-Making. 'Leveraging data can be a significant advantage,' said Davis. 'Being a data-driven organization can help us better understand where our weak points (in capabilities and markets) are so that we target where we want to be.'

The newest member of AFP's North American FP&A Advisory Council and the AFP 2021 Planning Task Force, I recently caught up with Davis to chat about her background and how FP&A plays a role in planning.

Lapidus: You were the director of FP&A and are now the head of M&A. How does this fit into your overall career plan?

Davis: As finance roles have evolved to be more of a strategic partner to operations, having breadth of experience in various areas should help me add value to my organization.

My long-term goal is to be a CFO. At my current company, the M&A function is part of the strategy group and this creates a nice partnership between strategy and finance. As the role of the CFO has evolved to be more of a strategic leader, this experience will be valuable.

How does your FP&A background help you in your new role?

In the FP&A role, I learned a great deal about what our investors expect. Ultimately, our goal is to increase shareholder value in the short- and long-term. Understanding what drives value and how our operations impact that - understanding where we are strong and where we have to fill some gaps - should be very helpful in focusing on the right types of companies as we look to grow inorganically.

Previous finance and modeling experience is also helpful, as well as understanding how the bottom line gets impacted by changes in our business.

What else (besides FP&A skills) would someone need to get up to speed in this role?

You also need be able to take the perspective of looking from the outside in, so market dynamics and an understanding of competitive information and corporate finance are all important. Top performers in this role need to balance an understanding of the competitive landscape and our overall strategy with the ability to find the pieces of the puzzle that will give us the competitive edge in our industry.

The ultimate goal is not only top-line but also bottom-line improvement to the organization. Having a solid understanding of what drives performance is key.

FP&A is often involved in the post-M&A integration; what can be put in place at the start of the process to make this easier down the road?

Although it is hard to do in practice, the best thing is to think about integration very early in the evaluation process. Assembling the right cross-functional team (e.g., finance, legal, IT, HR, sales, marketing) and working on the PMI plan early on will not only make the process easier down the road, but it should also help to integrate very quickly once the deal is closed.

There is a lot of literature about how hard it is to create value through M&A; what advice do you have for getting this right?

• Start with the overall enterprise strategy, focusing on the areas that will be accomplished via inorganic growth. What are the geographies in which you may want to expand your footprint? What are the gaps you may want to fill via acquisition? What types of companies are you able to successfully grow based on your internal expertise?

  There are so many companies out there, and honing in on the right type of company profile is critical. Be sure to define the relevant criteria upfront to ensure you are focusing on the right companies, as well as those you should avoid buying - those that will actually devalue the company (i.e., companies you don't have the ability to run and grow).

• Have a robust stage-gate process that clearly defines how to go about focusing on opportunities.
• Involve the leadership team early on as part of the company screening process to make sure everyone is aligned and clear in what you are pursuing and why.
• Involve the business leads early on; the center and the business units need to be closely aligned throughout the journey.
• Think about post-merger integration early on. It will help with integration activities, just as having well-defined processes, policies and governance around data will help with how you treat data from the target company and how quickly you can integrate.
• Speed is important. There is a short window to integrate and get employees in the right seats. If too much time passes, not only are potential synergies not realized as early as possible but there are also additional challenges with two cultures coexisting, and the acquired company being less willing to change. Having a clear integration plan, sticking to it and maintaining momentum are all necessary for success.

For more information on building a career plan, download AFP's Guide to Career Pathing.

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