Often, the process of mergers and acquisitions comes down to squeezing enough savings out of the acquired firm for the deal to make economic sense, leaving the person in charge of integration in the unenviable role of “hatchet man.”
As executive director of finance at Dell, David Kennedy has been overseeing the finance integration and “work stream efforts” of the company’s aggressive acquisition program. Kennedy, 35, sees his role in a much more positive light, as primarily a cultural integration effort. Dell has completed 18 acquisitions since its $3.9 billion purchase of Perot Systems in 2009. Kennedy, who managed the integration of six of the transactions, says that for the most part, Dell keeps on the staff of the companies it acquires.
“We tend to try to retain all the key talents from an acquisition,” he says. “Sure, some people leave, but we value the new DNA. We weren’t a service company before these acquisitions, and we need the expertise.”
A native of Ireland, Kennedy has worked at Dell for 14 years in various posts in India and the U.S. He’s now at Dell’s headquarters in Austin, Texas, where he has been managing the company’s IT budget in addition to his work integrating acquisitions.
What have you learned in overseeing all these acquisitions? Are there things that seem to make them work?
We have over time developed a 450-part program of finance integration. Some of them are pretty straightforward, like switching bank signatories. Some are much bigger, like integrating forex operations. As we learn things, we add them to the list. We don’t tend to skip many of them. We like to ask all the questions. It’s a very risk-averse approach, with no shortcuts and all the bases covered in each deal.
What is the hardest part of doing an acquisition?
It tends to be the cultural issue. It’s a big deal to be acquired by a large company like Dell. Also, we run very tight on our standards as a public company, and many of the companies we acquire are private, so their people have no experience with that. We at treasury are the first people at Dell that the acquired staff meet, so it’s important to show them what roles they will be playing.
How does managing the IT budget fit in with your acquisition management role?
Managing the IT budget, whether it’s our infrastructure or telecom costs or ordering our software, is a very strategic role here. I see my partnership with the CIO as driving our acquisition strategy.
How has the cloud changed IT?
Internally, the cloud helps us to manage our IT operation. Also, what worries CIOs these days is the question: “How do I run IT cost efficiently?” With all the appetite for data, our cloud-based solutions in treasury are cost-effective and can help the CIO too.
My career had three international assignments, two in the U.S., and one in Bangalore, India. I also started out with an internship in Ireland while I was still in college. So each time there’s a leap of faith you make. It turns out that these are the most rewarding experiences I have had. I get a lot of new contacts, and because I’ve had experience in the U.S., India and Europe, I now have contacts all over and can find help in all areas. By the way—you don’t need to go on foreign assignments to get global experience, but you do need a travel budget!
What has been the best part of your job?
At Dell, we are transforming our business from being a traditional box seller to being a solution provider. I’m right at the heart of that transformation, with M&A being one of the parts of it.
Do you have any advice for young people interested in a career in corporate finance?
Constantly challenge how things are done, and try to simplify your own work. Aggressively look for roles that take you outside your comfort zone. Develop new skills. And execute. You’ve got to know your day job and look after the house.
It’s all about the networks and relationships you build. As you get more senior, it’s about knowing a lot of people so you don’t have to knock down doors to get things done.
Where do you see the most opportunity in corporate finance?
My path has been breadth of experience. In Dell, though, I can show you many successful people who’ve been very focused, and many who have chosen a broad experience approach like me. So with a large company, I think you can go either way.
Are there any skills you still need to acquire or develop?
I’m actually a career-qualified accountant. I’ve spent 10 years in business roles now, but as I’ve gone into these M&A deals, I think I’d like to improve my accounting skills
What risks have you taken in your own career?
I started out supporting operations in Europe, but asked to move over to cash and liquidity management there. That was totally out of my comfort zone, as I was very operationally oriented. Also, there was the move to India. I had to mentally prepare to take that on, to learn a new business, consumer services. I had teams in four locations to manage.
Did you have a mentor?
My approach was to have a finance mentor and a non-finance mentor. My finance mentor was my U.S.-based manager in 2003-2005. My non-finance mentor is part of operations in Europe. Each time I think about what to do next, they provide a great sounding board.
Are you a mentor yourself?
Yes, absolutely. I’ve done many rotations. Our CFO, Brian Gladden, has formalized the process a lot, so now I’m actively mentoring five to 10 finance folks.