UCLA Anderson School of Management Blog

In His New Book, UCLA Anderson Professor George Geis Dubs Google's M&A Strategy "Semi-Organic Growth"

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Professor George T. Geis teaches in the areas of mergers and acquisitions, financial modeling, entrepreneurship and accounting at UCLA Anderson. In his latest book, Semi-Organic Growth + Website: Tactics and Strategies Behind Google’s Success, Geis analyzes Google’s distinctive expertise in the area of M&A. He shares here why he chose the iconic company’s “playbook” to examine the escalation of M&A activity as a growth strategy.

 

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By George T. Geis

M&A activity in 2015 is hotter than ever, with some $2.15 trillion worth of deals announced during the first six months of this year, according to Dealogic. There is no shortage of companies rushing about in a series of acquisition cascades in industries that include technology, media and health care. Will they all be successful? Research indicates that many will not.

There are some notable companies that have made great strides in building M&A as a core strategic capability, adding highly successful M&A processes into their organizational DNAs. Consider the Walt Disney Company. Beginning with its $7.4 billion stock-for-stock acquisition of Pixar in 2006, the company has continued an acquisition spree that has included Marvel Entertainment, Lucasfilm and Maker Studios. Disney’s market value has increased some 250 percent over the past five years, a lofty percentage virtually identical to that of high-flyer Apple over the same period.

Companies that think systematically about all major aspects of M&A capability — from strategy to valuation to integration — really piqued my interest. Just look at Google. Acquisitions have played a particularly important role in the strategic unfolding of this iconic company. Google has been an experimental lab, not only for products and services, but also in utilizing M&A to further its purposes.

I wrote Semi-Organic Growth to understand in depth why Google was engaging in what was an unprecedented level and type of M&A activity. During its short history, Google has acquired some 200 companies. But there’s more to the story than numbers. A major thesis of this book is that early in the company’s existence, a playbook for M&A activity (which I dub semi-organic growth) was imprinted on the company and that this pattern became a core element of Google’s success.

There is more about this topic in a short video about Semi-Organic Growth.

Whither GDP? The Case for Inclusive Growth

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By Carolyn Gray Anderson

The Center for Global Management’s first invited speaker of the year was Grzegorz “Greg” W. Kolodko, the former Deputy Premier and Minister of Finance of Poland, a position he held from 1994 to 1997 and again in 2002-2003. CGM videotaped the event for those who couldn't attend.

Kolodko was introduced by Henry Ford II Professor of International Economics Sebastian Edwards, and the two economists’ rapport was evident as they remembered Kolodko’s first visit to UCLA in 1992 and exchanged ideas about whether to raise Europe’s retirement age.

Known as an architect of economic reform in Poland, Kolodko addressed the Anderson audience as the annual World Economic Forum began in Davos. His refrain throughout his talk, which focused on the connectedness of the world and a common interest in keeping it healthy, was: “Things happen the way they do because so many things happen at the same time.”

Lessons Learned from an Alum

When Kathy E. Magliato, MD, MBA, became a board-certified cardiothoracic surgeon, she was practically one of a kind, joining approximately 200 other women in the world to breathe this rarefied air. Later, as Director of the Mechanical Assist Device Program at Cedars-Sinai Medical Center in Los Angeles, she found even that wasn’t enough.

“While building this clinical program and working with various artificial heart manufacturing companies, it became apparent to me that something was missing in my life as a heart surgeon and program director… the language of business,” writes Magliato (EMBA ’06.) “While I was fluent in the language of medicine… I was completely ignorant of the language of business,” she continues. “While one language was used to save lives, the other was used to change lives, and I found them both extraordinary and necessary to my evolution as a physician and surgeon.”

Lessons Learned: Stories from Women in Medical Management, edited by Deborah Shlian (EMBA ’88,) exposes the experiences and challenges of women like Magliato and herself, medical doctors navigating an industry where women in executive positions are highly underrepresented.

Twenty-four women with leadership positions in a variety of fields, including academic medicine, hospitals, pharmaceutical companies and government, detail their unique experiences with healthcare’s thick glass ceiling, which can thwart women’s ability to grow into more senior roles. “Through a range of stories, this book shows the value of mentorship, the importance of knowing and staying true to yourself and possessing the will to take risks,” Shlian says. Among other key topics, the women share obstacles and perspectives in balancing work, family and personal life.

When Shlian edited her 1995 monograph, Women in Medicine and Management: A Mentoring Guide, 19 percent of American physicians were women, up from approximately eight percent in 1970. By 2009, that number had increased to 30 percent, according to Shlian. And, while data on women in medicine has improved, they still represent a disproportionately small percentage in leadership roles. As the book notes, almost 50 percent of all medical students in 2012 were female, yet only 16 percent hold leadership roles.

In her introduction, Shlian quotes Barnard College president Debora Spar speaking at a White House conference on urban economic development. “We have fallen into what I call the 16 percent ghetto, which is that if you look at any sector, be it aerospace engineering, Hollywood films, higher education, or Fortune 500 leading positions, women max out at roughly 16 percent. That is a crime, and it is a waste of incredible talent.”

Shlian received her M.D. from the University of Maryland and spent years as a family medicine practitioner before coming to UCLA Anderson for her MBA. After business school, Shlian started a medical executive recruiting firm, which her husband Joel (EMBA ’88) joined in 1994. Dr. Shlian attests to the value of her time at Anderson and the horizon-expanding teamwork with fellow students with dissimilar careers. “The networking and opportunity to work in a collaborative environment, along with the operational and math skills that I developed while at Anderson, helped reshape my way of thinking about my profession,” she said. “It was the most interesting education because in b-school we worked in groups while in medicine you work by yourself. In a group of six, we had finance and engineering practitioners while my husband and I were both doctors. The new understanding I gained based off their expertise was tough, but it was good.”