Acquisitions: The perfect union

Buying a business is the easy bit – it’s what you do after that counts.

Let’s assume that the business you have bought needs to be integrated with yours and that you want the management to stay. This is the highest-risk stage of the whole operation. You might destroy the business or unwittingly lose so much value at this stage that it’s soon worth much less than you paid for it. Don’t be surprised if you do – it’s what happens to three out of four business leaders. So, how do you maximise your chances of success?

Well, it isn’t easy, but I’ve worked in people businesses for more than 40 years and after a lot of deals, I’ve developed a 15-point process.

1. Start with a shared vision
Hopefully you already have a vision for your business. Now’s the time to revisit and refresh it.
It’s vitally important that, if the key people are staying in the acquired business, they buy into your vision rather than feeling they’ve sold out. This process should have started in the courtship stage when you were starting to persuade the owners to sell to you.
Get the key management away from the office, ‘theirs’ and ‘yours’. Make sure there’s time for play as well as work and mix them up into project teams with tasks to report back on during the day. Make a point of listening very carefully to the new team’s ideas and be prepared to publicly amend your thinking when they come up with valuable contributions.

2. Shared empowerment
Any successful leader who wants to grow something big has to learn not just to delegate, but to empower his key people.
This spirit of empowerment must be applied to the incoming executives. However, if your business is successful, there’s no way you are going to hand it over immediately to people who’ve not proved themselves to you, even if they’ve been successful elsewhere.
The trick is to create teams at every opportunity that are deliberately a mix of their people and yours.
You need to spot the new talent, compare them with your own, and give them every opportunity to succeed. This is not only a case of empowering these new executives, it is also about ensuring they don’t get pecked to death by your own flock.
You have to demonstrate that there are no favourites and bend over backwards to show your fairness.

3. Create a common identity
If the company is joining your group, but is not being physically merged, you need to try to get the best of both worlds – their brand name and reputation in that market, but with a clear demonstration that they have joined your group. I have frequently done this as a two-stage operation, and written it into the purchase contract. At my old business, CIA, we bought a company in Europe called Media Mend. For one year it was called CIA Media Mend and after that, CIA.
Clearly this is more expensive, but it is far less unsettling for staff and clients alike. Of course, if they have a stronger brand than yours, then you must be prepared to convert to theirs.

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