Program Strategy and Target Criteria

A program strategy defines the kinds of companies you should buy repeatedly and why they would be worth more with you. Turn it into criteria that a deal team can apply consistently, while keeping room for evidence to change the answer.

Start with a business problem. “Buy software companies” describes a market. “Add inspection scheduling to our existing maintenance workflow” identifies a customer need and a possible source of value.

Write a thesis people can challenge

For each acquisition theme, record the customer outcome, the strongest alternative to buying, and what owning the target would improve. Name the executive responsible for delivering it.

The template below makes an otherwise broad ambition testable. Every entry is hypothetical.

Include the cost of proving the thesis. Customer interviews, technical assessment, and a partnership pilot can all be useful before an acquisition campaign.

Separate exclusions from preferences

A weighted score should compare eligible companies. It should not allow a good result on several minor criteria to conceal a failed requirement.

Use three layers. First, apply exclusions and mandatory conditions. Second, assess strategic and business fit. Third, record availability and relationship readiness separately. A willing seller should not receive a better strategic-fit rating just because they answered an email.

Each criterion needs a question, acceptable evidence, an owner, and an expiry or review trigger. Record “unknown” when the source cannot answer. Missing information is a research task; it is not automatically a failure or a pass.

For example, distinguish “supports export” from “customers can migrate without losing audit history.” A marketing page may support the first claim. The second requires a technical test and customer evidence.

Set capital and capacity limits together

Finance defines the return requirements and funding constraints. The integration leader defines available capacity by skill and month. Review them together before expanding the pipeline.

Reserve capacity for problems in existing acquisitions. An engineering team fully assigned to planned migrations cannot absorb an unexpected security remediation without displacing work. State which commitment would move if a new deal advanced.

Use scenarios for the whole program. Several targets may depend on the same customer segment or buyer sales channel. Their downside cases are correlated even when each deal model looks reasonable alone.

Version the strategy as it changes

Record the approved thesis version on each screening result and investment memo. When leadership changes a criterion, identify the affected targets and request reassessment. Do not rewrite earlier approvals to make them appear consistent with today's strategy.

Continue with the program operating model and portfolio economics.