[This is an Op-Ed by Mike Rogers, of PatchLink, who has completed 10 acquisitions and two sales during his career. Studies have shown that companies going through an acquisition or merger fail to do very well after the M&A process, on average. So we asked Mike for insights into doing M&A correctly.]

There is no such thing as the perfect deal and blending together two companies is never easy. There are bound to be issues that come up before and after you make that agreement, but it all depends on a sound strategy. You can fix a bad deal structure, you can fix a bad integration, but you can’t fix a bad strategy. Based on my experience in corporate development I’ve come up with seven steps to developing and following a smart M&A strategy.

1. Know thyself

In order to create a very solid M&A game plan you’re going to need to look both outward and inward. Examine the market you’re in and what you’re currently doing with the resources you already have. Then determine how an acquisition will help you achieve your business goals in the next three to five years.

At PatchLink, we developed a strategy to extend our technology to cover more of the IT security market. That self-assessment was the genesis for recent purchases of the STAT division of Harris Corporation and SecureWave, a Luxembourg-based company. Both of these acquisitions move us front-and-center in the security industry, moving beyond our previous market coverage.

2. Listen to your customers

Once you’ve figured out your growth priorities, it might be time for a reality check. And there’s no better pool of people to provide that advice than customers. PatchLink’s recent deal to acquire STAT involved customers of PatchLink’s and of Harris’, who knew that our products were already working together. These customers were the key to this deal, because they supported it and wanted to see the products work together. Setting up a customer advisory board with a representative sample of key customers is an ideal way to provide feedback to make sure your strategic planning doesn’t miss the mark.

3. Shoe leather is cheap

Given the fact that I’m currently in Luxembourg working through the details of our recent acquisition of SecureWave (and how much time I’ve spent here over the past couple of months), I can attest that being out there visiting a potential acquisition target and meeting with board members is one of the best ways to get to know a company that might soon be a part of yours.

You should walk the offices and talk to executives and staff to get a feel for their business, and once you’ve made a deal you’ll need to spend time with the key leaders and employees of the acquired company to sell them on the idea of the newly wedded venture.

4. Trust your gut

Sometimes you have to walk away from a deal if it’s not the right fit, which I’ve done before. When I was at CyberGuard, we spent six months negotiating an acquisition of a small security company, and we were about a week away from signing, but we had to walk away. It just wouldn’t have been the right fit. Right up until the last moment you have to question why you’re doing the deal and trust your gut.. This is why from the very beginning I look at intangibles before we even crack the books or discuss valuation. If I see a company with an incompatible culture, a company that’s sedentary, a company that isn’t aggressive or growing, I walk before I ever even get the accountants involved.

5. The rule of obviousness

When you’re talking about the rationale for a deal, the justification for it needs to be obvious. Not explainable—OBVIOUS. It needs to be obvious to the management, to the executives at the target company, to your customers and even to the analysts and media. When I was at Secure Computing, we bought CipherTrust for about $270 million. While I thought it met the rule of obviousness some people thought that it wasn’t the smart move. However, once Cisco bought IronPort, a direct competitor to CipherTrust, a bit later for more than $800 million, our deal became more obvious, and it made me look a lot smarter.

6. Retain key executives

For both of the recent acquisitions that we’ve made at PatchLink, of Harris STAT as well as SecureWave, we’ve identified key people within the organization that we know we would like to keep. From the beginning, we made sure that they knew that. If you can get people excited about being a part of your team even before the deal is signed, and sell them on the opportunities that they’ll have working with us, then they’ll likely bring their enthusiasm back to their employees and give them incentive to stay as well.

7. Over-communicate

As I mentioned earlier, I’m currently centered in Luxembourg trying to drive and manage the integration with SecureWave. Everyone within the combined company wants to know where we’re going, what we’re doing, and what will be the vision for the company. We are striving to over-communicate at this point, and if we strive to do that, we might communicate just enough to make this successful. You can’t just tell a story once and expect everyone to get it the first time around, and this includes communicating to the employees, the stakeholders, and to the media and the marketplace.

There may be no magic ingredients to concoct the best M&A strategy, but following these essentials can go a long way toward building a strong foundation. You need to have the skills, the time and the focus. The key is to always be looking for deals and constantly checking to see whether they fit with your overall corporate strategy. Your goal is to do the right deal at the right time at the right price.