Bill Yearsley was the CEO of Redland Aggregates North America until Redland plc's acquisition by Lafarge SA in 1997. Since then he has moved on to be the Chairman and CEO of American Civil Constructors, a $2 billion building, landscaping and construction company that has grown rapidly by a combination of organic growth and acquisitions.
Yearsley has a degree in Civil Engineering and a Masters degree in construction technology. In his early career, he had been a construction field engineer and a bridge builder. In his own words, he built his career 'from the ground up'.

In Redland, Yearsley became the President of Western Mobile, an aggregates, concrete and road-building company based in Colorado. Of all Redland's aggregates companies, Western Mobile had an exceptional record of growth and performance. Two underlying features marked the company out - its high performance culture and its track record in developing exceptional executive talent.
An architect of this culture was Yearsley, who had very strong beliefs about devolving real responsibility to operating managers, expecting them to perform well and providing a potent mix of high support and sometimes abrasive critique to hone their management abilities. The culture of Western Mobile was not for the fainthearted, but for those who could stand the heat, it provided exceptional growth opportunities.
Western Mobile developed comprehensive processes for identifying and growing talent, with extensive use of psychological assessment, coaching and high quality executive learning programmes that mixed theoretical and practical experience. Yearsley dedicated serious effort to his own learning and development, using a wide variety of different media from mentoring to external programmes.

In the early 1990's he became the President of Redland Aggregates North America, a $1 billion business group consisting of companies in Maryland and the East coast, Eastern Canada, Texas and Colorado.
Whilst he was President of Western Mobile, it occurred to Yearsley and his highly supportive British boss, George Phillipson, that there were considerable opportunities to develop the business by a combination of operational excellence and acquisitions. Yearsley applied a mix of gritty practical experience and strategic savvy to the challenge of making successful acquisitions.

Redland Aggregates North America (RANA) was part of the Redland group, a British quoted company that had grown into the upper half of the FTSE 100 by making a series of acquisitions during the 1980's and early 1990's. Many of these acquisitions destroyed value in copious quantities, so a backcloth to RANA's strategy was a parent company that had learned the hard way about what not to do in the acquisitions department!

It seems to us that a mixture of feet on the ground realism and strategic and financial insight makes it possible to use acquisitions as a pillar of a business development strategy. We therefore decided to use some of Bill Yearsley's experience to describe how to develop a successful M&A strategy.
We are grateful to him for sharing his experiences. Here is the 'scene setting' that made the strategy possible.

Clear Strategic Intent

RANA's businesses were often in geographically spread out areas. One key strategy was therefore to develop very strong market positions in regional pockets. The best way to do this was to combine three elements of strategy:

Shared Understanding with key Stakeholders.

We have already mentioned managers, who as a group were raring to go.
In RANA's case the major external stakeholder was its parent company, Redland plc. In the case of a quoted company, it could be key long-term shareholders (always assuming that there are many!).
The basis of the RANA/Redland understanding was as follows:

Getting the Reward System straightened out.

All too often, reward systems distort thinking about acquisitions. This can happen in many ways. The commonest are:

Prepare Carefully before any Acquisition.

This does not mean putting together a flurry of planning and project groups rapidly assembled just before a bid to justify the good old hackneyed cry, "Even now, integration teams are hard at work".
This phrase, plus passionate claims about 'synergy' are real warning signs that an acquisition is on thin ice!

In the case of RANA, preparation meant that the capabilities necessary to support a successful acquisition strategy had been steadily built over a number of years. Of particular note were:

The essential process of preparation can take years. In the case of RANA, it so happened that the culture, skills and practises that had been developed to create a top-class operating company were ideal for developing a base to make and assimilate acquisitions.
 In our view any company that is not at the top of its class operationally and very good at its particular business has no right to make acquisitions.

Clear, Sensible Ground Rules.

It is crucial for acquisition-minded companies to have quite clear and consistent ground rules to govern M&A activity. Why? Because it is remarkable how otherwise rational people can become so bound up in the macho aspects of acquisitions that they can justify all kinds of stupidities just to get their hands on the quarry. (No pun).
We know many women top managers who are frequently amazed at the childish antics of male colleagues when it comes to the thrill of the chase and conquest.

Bill Yearsley produced a quite detailed manual to guide his managers through the process of making acquisitions.
We will cover the content of this in Part 3. But he also had a number of 'Meta-rules, that provided a framework for those involved in M&A work. Here are some of them:

Tuck-in's were acquisitions of smaller companies that could simply be absorbed into the operating infrastructure of regional businesses. The process of finding and making tuck-ins was the responsibility of regional managers.

Bolt-on's were acquisitions that could not be easily folded in to an existing regional infrastructure and which extended the regional reach of the whole business. They required specially assembled teams that would be responsible for planning the acquisition and then assimilating it into the RANA infrastructure. The leader of this process would be responsible for running the business post-acquisition.

Large acquisitions were likely to be extremely rare and treated with great care, as the attractions of 'transformatory' opportunities were likely to be false.
It was also agreed with Redland that any such possibilities would be scoped into the scenario-building aspects of the joint corporate/RANA planning so that there was joint understanding of the relative attractiveness of particular targets and the likely significance of particular industry-wide events.

In Section Three, we will look in more detail at a well thought out acquisition process through examination of the RANA managers' acquisition manual.

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