A corporate development department doesn’t have to be huge if the team has been selected well.
When Facebook was conducting some of the biggest value generating deals of recent times – notably, WhatsApp and Instagram among them – its corporate development department consisted of just two people.
Their example shows the value of good corporate development recruiting. This is the definitive guide prepared by DealRoom, leading software provider for Crop Dev teams.
Why is corporate development recruitment important?
The example cited in the introduction of Facebook pair, Vaughan Smith and Mike Brown, is indicative of why corporate development recruitment is so important.
While Mark Zuckerburg and Sheryl Sandberg may have won plaudits for the large number of acquisitions made by Facebok around 2010, the company’s small corporate development team undoubtedly had a large say in identifying the acquisitions for Facebook.
Without a good corporate development team, can a company still make value-generating acquisitions?
Certainly, it is possible.
But without a proactive corporate development team, with the ability to quickly identify where the opportunities for a company are (think Blockbuster turning down the chance to acquire Netflix), the company risks being left behind.
Good corporate development recruitment enables a company to bring in these potentially game changing team members.
How does the corporate development recruitment process begin?
While the decision to hire for most departments is relatively organic, the same cannot be said of the decision to making the first recruitment for the corporate development department.
For example, in most other departments or functions, the requirement for new personnel arrives when the workload is too much for the remaining team. With the first hire in corporate development, the decision is aligned with the decision to investigate acquisitions.
In this sense, the first corporate development hire is as much a function of the company’s overall corporate strategy as much as growth of any single department.
When a company is considering M&A, recruitment of somebody – externally or internally – should be part of the conversation.
While investment bankers can add a lot of value to the process, having someone inside the camp directing the process can be dividends in the long run.
This is where corporate development recruitment comes into play. Good corporate development recruitment enables a company to bring in potentially game-changing team members who can quickly identify where the opportunities for a company are.
Without a proactive corporate development team, a company risks being left behind in the race for M&A success. And for those companies looking for an extra edge in their recruitment process, consider using a conclusion generator by EduZaurus to help streamline and polish your recruitment messaging. It’s also important to stay up to date on the latest industry trends and best practices, and to remain open to new approaches and strategies. With the right team in place, a company can capitalize on M&A opportunities and stay ahead of the competition.
Qualities of a Good Corporate Development Hire
In the most general terms, the qualities of a good corporate development hire should include the following:
- Analytical: The corporate development hire doesn’t have to be an extrovert, as is the case with most investment bankers, but they should be analytical. This will allow them to assess the pros and cons of potential targets as they go.
- Numerate: The candidate should also be good with numbers. A qualitative mindset will go a long way in corporate development, but the numbers are important, particularly as investment bankers like to throw numbers around, so the candidate should be able to understand what’s going on.
- Industry-specific: It helps when the corporate development candidate knows what’s going on in the industry. Whereas many investment bankers are industry agnostic, the corporate development officer should have his/her hand on the pulse of the industry. This may also inform whether it’s an internal or external hire (see next section).
- Communicative: Be mindful that communicative does not mean extroverted; it means that the candidate has the ability to communicate well with target company management, and to relay findings to his/her company. They should also be able to outline why such and such a company represents a good investment.
What education should candidates possess?
Although it would be good to say, ‘it doesn’t matter what education they possesses if they’re the right person,’ there’s no sense in putting someone under-equipped into the corporate development team.
It’s simply too important a role for the company’s strategy to be casual about. For this reason, we recommend that anybody hired for the role should possess a numerical degree of some format (accounting, economics, engineering, etc.).
If the person being hired has no previous experience in corporate development, you’ll have to make a judgement call about whether they have the numerical ability to thrive in the role.
The good news is that there is currently a wealth of courses that exist for corporate development candidates to improve their capabilities and bring them up to speed on what’s required for the role (insert link on M&A Science courses).
Hiring Internally and Externally
As with any position, the right person for a position may already be working within the company. This shouldn’t be ruled out.
The advantages that hiring internally over hiring externally include:
- Ability to experiment: The internal candidate could be give a period to prove their worthiness for the role, before continuing or otherwise returning to their previous role within the company.
- Shortened onboarding times: Being familiar with the culture of the firm is a necessity for somebody on the corporate development team, and this should be a consideration for corporate development recruitment.
- Industry familiarity: See previous section.
- Increased employee engagement: Hiring from within creates a range of unseen benefits from company, not least of which is increased employee engagement. Employees can often become better merely by virtue of being valued more by their company.
Corporate development recruitment should be a consideration for any company looking to begin an M&A venture.
The fact that there are so many courses available now means that even if the right candidate doesn’t come from a traditional background for investment bankers, they can still be brought up to speed relatively quickly.
Wherever the hire is made from, it should be made carefully. A good corporate development hire has the potential to generate massive value