We asked members of the Entrepreneurs' Organization (EO) to share their experiences in successful mergers and acquisitions.
Define Complementary Processes
"Adding strong branding and digital and direct marketing services enabled us to bring more sophisticated campaigns to life on a broader scale. And after testing the waters on several projects, we acquired a complementary organization that was headed down a similar path, and became a fully integrated marketing agency. In doing so, we realized the importance of people's need for processes, even when they insist otherwise.
It takes time to adopt someone else's process, get others to adopt yours, or create entirely new ways of working. Starting early to define which processes merging teams will use--long before people actually work together--creates an environment built around a shared comfort zone. And when people are comfortable, they are more creative and productive."
Evan Zall, EO Boston
President, Ebben Zall Group
Create Action Plan and Be Patient
"Unlike an acquisition, a successful merger requires a clear and completely agreed-upon action plan for how the merged companies will operate the day they become one. In more than one instance, we did not achieve complete alignment on how the combined business was going to achieve growth. As a result, we ended up spending more time arguing and negotiating, which wasted a lot of time and energy.
And if no significant changes are immediately occurring, patience for coevolution of the two organizations is crucial. The more the two firms operate independently, the more likely that no real integration can happen without significant leadership expressing how the firms will work together and driving the partnership."
Michael Hobbs, EO Chicago
President, PahRoo Appraisal & Consultancy
Cater to Customers and Culture
"It's important to remember the customer. Even your most loyal customers may ask if service will remain the same. Significant effort should be directed towards actions that support maintaining or increasing customer satisfaction. Messaging and customer engagement can go a long way toward ensuring customers understand that the goal is to better service their needs.
Also, "culture eats strategy for breakfast." Merging two companies means combining two possibly quite different cultures. Make sure they don't clash and reshape them to align with your vision. People make all the difference and you want the right people, in the right seats, at the right time. Thus it is imperative to map the values that guide the new entity, so everybody knows what lies ahead."
Shaun Gordon, EO New York
Chairman, Pristine Environments
Research Cultural Fit
"In 2008, we acquired a partner agency and merged their team with ours, picked up their clients, and integrated their founder as a senior partner. Within two years, their original team, in its entirety with the exception of the founder, had either been fired or had quit. What's worse, most of their clients also left. The most important lesson that we learned was how everyone would fit into our culture.
The founder was a perfect fit and was the primary attraction for the acquisition. However, we had not done enough due diligence to understand how the entirety of the company would integrate with our business model, team, and culture. The new partner is still with us, but we could have saved ourselves a lot of trouble and wasted resources trying to absorb an entire company."
Curtis Priest, EO Toronto
Partner and CEO, Pixelcarve, Inc.
To learn more about EO members' entrepreneurial experiences and insights, visit Octane Blog, EO's global business blog.