‘Strive not to be a success, but rather to be of value.’ -Albert Einstein.

The acquisition may become a tempting component of a corporate growth strategy in times of slow organic growth. However, research consistently indicates that more than half of M&A deals fail to create value; basically, most of the time this comes down to flipping a coin.

It can be tempting to wait for an outside adviser to pitch the right deal, but by the time the pitch book arrives, it’s probably too late. Given the great risks and risks associated with mergers and acquisitions, investing the time, money, and organizational focus of top executives to help overcome the various challenges of M&A-driven growth, prior to any particular deal, should pay for itself many times over.

While every M&A approach contains elements that are unique to the company or industry and not all companies aim to become serial acquirers, Danaher’s kaizen-like approach, from search to buy to integration, provides some insight into a panoply of best practices. he has perfected the ~400 acquisitions he has made in the last 35 years.

Danaher, a manufacturer of industrial products and hand tools, operates more like a holding company that buys and creates companies. Until its latest deal (the US$13.6 billion acquisition of Pall in May 2015, twice the size of its previous largest purchase), it had focused on midsize acquisitions that are then consistently exposed to its operational excellence. As a result, its member companies have become B2B category leaders, consistently delivering high-quality, reliable products and solutions to what is otherwise a diverse group of professional, medical, industrial, and commercial businesses. This caused the company’s total shareholder return to increase by 70,000% since the early 1980s versus 5,000% for the S&P 500.

So what explains Danaher’s ability to consistently deliver successful buying growth when so many other companies stumble?

1. An investment thesis that takes into account the operating base of the company, its current context and economic realities. It goes beyond generic strategy statements like “strengthening our Asian markets” to identify how the company will compete and create value over time, eg why us? because right now? How did we get there?

A good investment thesis should be specific enough to clarify where the company wants to increase its exposure—that is, where it should proactively seek trades to avoid “me too” or out-of-strategy trades that are unlikely to add value.

Danaher has a rigorous system for identifying and bidding on potential acquisitions. Look for industry brands with at least $1 trillion in sales and a 5% annual growth rate in an attractive niche market like environmental control or manual tolling, without exceptional competitors. There should be clear potential for margin improvement.

2. Clearly established M&A principles. Danaher has implemented a structured end-to-end process, from deal sourcing to integration, supported by a short list of principles designed to reduce the time and cost of the M&A process.

Based on these principles, Danaher focuses its attention on the issues that matter most at each stage of the transaction process. For example, during due diligence, she develops a short list of key business deal breakers early on and focuses most of his efforts on resolving them. During the bidding, he calculates an ‘exit’ value to ensure that the company does not overpay for the deal.

3. Experience that generates value for the acquired business; in the case of Danaher, operational improvement. One of Danahers’ first acquisitions, brake manufacturer Jacobs Vehicle Systems had begun experimenting with a Toyota-style lean manufacturing system. It worked, and Danaher began to implement what became known as the Danaher Business System.

Through this systematic process, Danaher is able to quickly reap the benefits of business acquisitions through reduced costs and expanded margins. It uses a unique set of continuous productivity improvement tools that has evolved over time to include a wide range of business activities, such as research and development, marketing activities, and plant, supply chain, and back-office operations.

For example, Gilbarco Veeder-Root, a leader in point-of-sale solutions, and Videojet Technologies, which makes coding and marking equipment and software, saw their margins improve by more than 700 basis points after their respective acquisitions.

Four. Active portfolio management and capital allocation. Danaher has continually rebalanced its portfolio by buying new companies and divesting from traditional manufacturing businesses or businesses that had become irrelevant to its broader portfolio; its largest divestment was APEX Tool Group, which it sold to Bain Capital for $1.6 billion in 2012. Danaher has moved 66% of its capital into new businesses since the 1990s.

It also aggressively manages the allocation of your capital across your current and new business or investment opportunities, based on their growth potential and return on invested capital. Excess capital is sent where it is most productive, and all investments pay for the capital they use.

In recent years, its attempt to devote more resources to large acquisitions of science and technology companies has led its industrial units to rely more on organic growth. In order to remain the best machine to do business with, Danaher recently announced its intention to split its business into two: a science and technology growth company that will retain the Danaher name with businesses in diagnostics, water treatment, dental sciences and of life and $16.5 billion in 2014 revenue, and a diversified industrial growth company with combined $6 billion in 2014 revenue to be spun off in late 2016.

If you want to include M&A as part of your growth strategy, you can pressure test your readiness starting with 4 questions:

1. Do you have a clear and distinctive investment thesis that outlines the role of M&A in your growth strategy and defines the types of deals for which you are uniquely positioned to add value?

2. Do you spend a significant amount of time refining your investment thesis and researching potential deals?

3. Do you have a clear set of principles that define your M&A priorities and the best practices for executing them?

4. Do you have an explicit capital allocation framework that can assess the value created through competitive uses of funds?