Acquisitions- Maintaining Soul in Your Newly Acquired Company

In my last segment I discussed the importance of integrating inward, or focusing on your internal team first. This segment we will touch upon the value of prioritizing your integration efforts within the acquiree to maintain the soul of the organization and leverage both what you brought to the table and what you acquired in the process.

As a young adult, I had the luxury of working for an organization that believed in delivering only the highest level of client and employee satisfaction. Delivering on our promises was expected. Growing and developing our teams was expected. We had an extraordinary leader who was highly driven, intelligent, and disciplined. He believed in and executed on the essentials – setting expectations and communicating results. And when the company won, everyone won. We were about something. Our leader maintained core business and personal philosophies that shaped our corporate strategy. That vision was something in which we could all understand and believe. And that sort of leadership attracted and inspired ambitious, hard chargers who fought for the win because they knew what a win looked like; they knew what they were shooting for. There was always a scoreboard and it could be applied to anything and everything. Said simply, it was a culture that drove results. There was a living, breathing soul to that company.

Every company has its own unique culture. Every company is founded on a certain something that will drive the heartbeat of its team. And just to be fair – that certain something isn’t always going to be the thing you want to maintain or foster long term – but there may be times when it’s one of the primary reasons you acquired the company to begin with. It’s a crucial element to evaluate.

Let me restate. Take the time to understand the DNA of the company you are acquiring. Then make decisions on how to best integrate. I understand streamlining and creating a one-to-many acquisition process may be beneficial for the acquiring company. However, unless you don’t care about the continuity of your new asset – which, by the way, means continuity in revenue, talent and morale – then you must be flexible. I’m going to continue my story for context.

Due to the wild success of our organization, we were bought by another company. The announcement was made and we received t-shirts and pens and sat through meetings where we were told how happy everyone was about bringing on such a successful team with such an interesting pedigree. And the very next week we were mandated to take any and all “legacy” items off of our desks, walls, etc. This included but was not limited to framed news articles displayed about our philanthropic contributions and awards that had been won due to spectacular achievements in sales and operations, and recognition plaques and letters from clients describing the great service we provided them. It included removing the wallpaper appliques that reminded us daily of our mission – to be successful, to be driven, to be a partner. The visual representation of a culture we took great pride in fostering and that absolutely drove all of the aforementioned success was wiped clean. What happens after that? You can easily guess.

Why was that the first thing on the list to do? Maybe there was good reason for it, but there was no communication as to why that was the first step of integration other than the new company wanted no remnants left of the old. The “legacy” stuff was gone, except of course the people. What does that say to the team that built what you bought? These people have with talent, tribal knowledge, and client relationships you would like to maintain. Wiping clean the culture they spent years cultivating and that was central to that talent, knowledge and relationship-building is at best a poor choice and at worst disastrous to your financials. This is one example of many head scratching strategies that have been shared with me regarding acquisition integration. When you need your new asset to thrive, be judicious about when and how change is introduced. You are dealing with the emotions and grit of the people within that organization and they need to feel a part of the process, not the recipient of the order. This goes far past the human element. Here are some other things to consider as you begin your integration process to avoid sucking the soul out of your results.

  1. Spend time understanding what makes the organization tick. Core values, mission, belief systems. Apply some emotional intelligence to the scenario. Think about how to keep the workforce engaged and executing at a high degree while new integration cycles are introduced.
  2. Make sure you know the market factors in integration changes. For example, does your new company’s name have a market value in the industry? When does it make sense to introduce a name change if at all? Does the name change hurt or impact your revenue stream? Do not let ego get in the way of this one, it can be detrimental to your bottom line if this one isn’t carefully thought out.
  3. Be cautious about what you say to the employees during the announcement time and press releases. For instance, “we are buying this company for their expertise in this channel, we plan on utilizing their best practices across the entire enterprise”. Statements like this, if not followed through, can destroy both trust in and the credibility of new leadership if not implemented. Say things that are real and honest even if it is not all roses.
  4. Evaluate the cost of non-revenue generating moves. If mission statements, company name and marketing materials, and various business processes already work, use them. You will save time, money and lessen non-critical burdens in the beginning of an integration strategy by simply letting simple things stand.
  5. Know that people are your biggest asset. What do you spend the most money on in any company? Salaries. These people are your largest investment to make you successful and when you acquire a company with a rich, employee-centric culture, you’re acquiring people who have been given something to believe in for which they’ll go to the ends of the earth to maintain.  Some changes are not a matter of if, but when. Take your time understanding the proper roll out plan for items that may not be a big deal for the acquiring company, but certainly matters to those in the new organization. There is a time and place for everything, make sure you become a student of that statement.
  6. Stay clear of soul torching activities. Sometimes employing an unbiased party into the mix is a good idea to assist in removing the emotion out of decisions and assist in your prioritization process.

Carefully evaluating your priorities of integration will set the stage for a successful future. Garnering buy-in from those who are responsible for keeping the soul of the organization not just alive but thriving is paramount. What you are creating with the acquisition carries both the legacy of what it was and what it could become with the proper nurturing. Strike the balance.


Acquiring a Company? Integrate Inward First

I ran into a friend and former colleague the other day that we will call Bill. We caught up on our families and pending summer vacations, but our conversation inevitably turned to work. His company was recently acquired and was beginning the work of integrating with the acquiring company. What struck me were the similarities in so many other stories I’ve heard of acquisition activity. It is hard work – harder than most expect for both the acquirer and the acquiree. It can turn ugly, quickly, and thus result in the loss of talent and experience if not strategically managed. And it can slow revenue growth the very opposite outcome and very worst thing that can come from an acquisition investment – if not executed brilliantly.

I speak from experience with all of the aforementioned challenges. There are, without question, very simple yet significant steps that acquiring companies need to consider to protect their new asset. This article is the first of a three-part series, focused on post-acquisition integration.

First Things First – The Current Crew

Too often, the lion’s share of time is spent communicating to and about the “new team” and less effort mapping a course for the current one. It’s not just the employees in the acquired company that will struggle with change. Absent or ineffective communication about objectives within the acquiring company can and will breed insecurity that can quickly manifest into turf wars, closed-off communication, omission of information, and quite frankly, disrespectful interactions with those who may be perceived as a threat. That, coupled with an entirely new team trying to show its value can be a recipe for low morale and underwhelming results if inward integration is not done right. Focus on nurturing, communicating and ensuring stability with your current team post acquisition, will set the tone of how they interact with your new team.

Bill spoke of an example where conflicting approaches by leadership were leading to a disconnect felt across the company. The new CEO had a great vision, was a practical thinker and understood the value of his investment. The CEO had respectful interactions with Bill, openly asked him for advice, and collaborated on decisions with he and his team. All the while, the CEO’s right-hand had a very different vision and approach. His interactions with Bill were stressed and at times degrading, and seemingly his goal was to make sure he established dominance in the situation before finding the best approach. Being in charge became more important than being right. These two competing strategies, created two messages that led to emotional collateral damage, confusion, and fear.

Why such different approaches?

Personality is one thing, but it was clear that rules of engagement from the top were not established. Most likely, the CEO’s right hand was insecure about Bill’s skills, experience, and business acumen not to mention the budding new relationship he was establishing with his boss.

Prepping your internal team, educating them on the strategic need for the acquisition and subsequently, establishing expectations for how they will conduct themselves with the employees of the newly acquired company is the first step to success. There’s no need to make promises, most companies move too quickly for guarantees and doing so can be just as toxic long term. However, it is appropriate and necessary to level set with your staff and let them know that you care about them and your new asset and that they play an important role in optimizing outcomes. The following are five simple things to implement while integrating inward:

  1. Proactively check the temperature of your Leadership Team by discussing the acquisition strategy. Understand who your internal supporters are, neutral parties, and negative nellies. It will be clear how you will need to construct your discussions with them for optimal results.
  2. Create a communication plan for your internal teams. Make sure the communication is clear, expectations are set and you do your best to eradicate insecurity.
  3. Demonstrate your affinity for the new company and talk favorably about the new talent and experience your team will have access to and how the collaboration between the new teams will drive results.
  4. Incorporate surveys regarding your leadership and staff’s ability to collaborate, their helpfulness, and their accessibility for the new team. Create incentives for great results!
  5. Be vigilant of personnel issues between legacy and new staff and extinguish them quickly. Don’t expect conflicts to manage themselves in this scenario; active leadership on seemingly insignificant things will be necessary for a while. Everything is a big deal for the time being.

Don’t underestimate the need to fulfill the emotional needs of your team once you have made the decision to buy a company, it will impact how smoothly your integration activities are executed. Without looking inward first, you can’t hope to look outward to a productive and successful future.