Clarify M&A strategy with the "Four T’s": Talent (acqui-hires), Tech (IP acceleration), Traction (customers/revenue), and Terrain (long-term bets). Each has different diligence needs and success metrics, and companies should build M&A muscle by mastering them in that order.

Before hunting for acquisitions, the internal business owner (deal sponsor) must write a thesis answering "what problem are we solving?" This prevents reactive M&A driven by inbound opportunities and ensures strategic alignment from the start, separating the "why" from the "who."

Successful M&A is driven by a deliberate strategy to fill a known gap (geography, service, IP). In contrast, reactive M&A, often a panicked response to market pressure or a competitor's move, usually leads to a botched deal and value destruction.

To guide investment, Milliken plots its business units on a matrix of "market attractiveness" versus "competitive position." This "bubble chart" visualizes which units are cash cows, need improvement, or are leaders, informing decisions on where to disproportionately invest capital for organic and inorganic growth.

Classifying acquisition targets into three tiers—Hubs (new regions with strong management), Spokes (smaller tuck-ins), and Route Buys (customer lists)—creates a disciplined strategy. This ensures each acquisition serves a specific, pre-defined purpose in the overall consolidation and has a corresponding deal structure.

Combining strategy, M&A, and integration under a single leader provides a full lifecycle, enterprise-wide view. This structure breaks down silos and creates a "closed-loop system" where post-deal integration performance and lessons learned directly feed back into future strategy and deal theses, refining success metrics beyond financials.

IFS uses a framework of four deal archetypes—Product Bolt-on, Customer Migration, Market Entry, and New Strategic Platform—to clarify the investment rationale and pre-determine the integration strategy for every acquisition, ensuring strategic alignment from the start.

After defining strategic themes, link them visually in a "strategy map." This map reveals critical dependencies (e.g., product goals depending on hiring the right skills), forcing a holistic planning process that accounts for necessary precursors and prevents siloed execution.

When acquiring a business, don't rely on a single outcome like achieving a growth target. Instead, seek assets that offer multiple ways to win. Even if the primary goal is missed, the acquired data, technology, or talent could create significant value for other business units, providing built-in insurance for the deal.