Anatomy of an Acquisition is a three-part series with the goal of demystifying the acquisition process by offering an inside view into the mindset of a corporate acquisition team.
IHS, Inc. is the world's leading provider of information, analytics, and expertise to decision-makers in high capital expenditure industries. Founded in 1959 and public since 2005, IHS has acquired 70 companies in the last decade. I sat down with three IHS employees who have each been part of 20--30 acquisitions over the last decade: Sheri Rhodine, Vice President of Corporate Marketing; John Ward, Senior Director of Brand Marketing; and Jenean Fields-Hansen, Director of Content Marketing.*
Due diligence can be a long, tough, and draining process. The truth is that due diligence is the easy part. The hard work really begins when your business has been acquired and the integration of your business, its people, process, and technology begins. Rhodine, Ward, and Fields-Hansen offer advice on how to weather the uncertainty, fear, and discomfort of the transition and set the stage to thrive as a star in your new organization:
Expect and accept separation anxiety. Homesickness is normal. Just imagine if you couldn't go home again. That is what it feels like to some folks after an acquisition. Employees from acquired companies long for the business they once had and the company brand they once represented. Unfortunately when the company is dissolved; there is no going back. People are often surprised by the feelings of loss and anxiety after the acquisition takes place and the integration starts.
"There is a lot of emotion that goes into an exit. Being acquired is something that many founders, executives, and employees look forward to and how it's going to be wildly profitable. The signing of the deal becomes a huge celebration of the acquired team's success. Then something happens. The acquired team has to part with their child. All of a sudden, the dialogue moves from the intricacies of business to being a very emotionally embattled discussion, they want to keep it in the nest a little longer. I am not sure there is a way to prepare for those feelings, to rationalize through what you might feel when you are no longer running a business or a function in that business." says Fields-Hansen.
Key take-away: Knowing that you may experience something along the lines of the stages of mourning means that you can be ready for it. Be willing to go through the feeling of loss. Talk to your colleagues and share your angst. You may feel anger and that's a normal part of the process. Keep in mind that anger tends to be a symptom of a different root cause: Fear. While you may have anger toward your new manager or company, what you may be doing is transferring your feeling uncertainty in your own professional life toward your new employer.
Don't jump the gun. The nervous tension for employees of newly acquired companies is normal. You might feel this overwhelming desire to jump right in and prove your value. Chances are, you had to be quite innovative in your business in order to get things done in your smaller company where resources were limited. You may take a look around your new corporate home and want to share all you have learned about a more efficient way to market a product, incorporate lean methods into R&D, or provide key first-hand customer insights. While what you have to say is valuable, knowing when to say it is more important.
"You may feel like you can add value by providing your earned wisdom. While you may have the best intention, you may also find that your passion comes through as aggressive and offensive. There is a fine line between being aggressive and being assertive. You don't have to wait for things to happen. But, don't try to make big splashes from day one. Learn your new environment. Be pragmatic, thoughtful, and flexible in your approach." says Ward.
Key take-away:Try to view your new employer from the perspective of a hired employee instead of an acquired employee. You will meet a lot of executives and peers during the first few months of integration. They will tell you about the corporate culture, what they value, what they don't, the direction of the company, and why they chose your business over any other. As a new employee, your job is to do a lot of listening. Listen to what the people around you are talking about and what they are not. If they are not asking you for input, be careful for the right timing to provide insights into how you might be able to contribute to the future of the business.
Be open to intrapreneurship. There is no easy way to say this, so I will just come out with it. You will lose the ability play multiple roles when you go from small, start-up to larger enterprise. You may feel frustration at losing the autonomy it takes to just get stuff done in a smaller business when you are told that you have to talk with so-and-so before you can buy that cool application or start the cool project or address your favorite customer's latest engagement request. As you begin the process of integration, work on creating new relationships that bring you closer to these sources of innovation, try to find alignment between the new innovations you want to create and your new employer's desire to invest in new ideas.
"Going from a smaller company to a larger business and having that degree of autonomy and entrepreneurial innovative mindset doesn't always adapt well to a bigger, cross-functional company. New employees, especially those from founding teams, tend to want to go on to their next entrepreneurial endeavor after they have fulfilled their post-acquisition obligations. There may be a desire to leave too early when there are plenty of opportunities to make real impact at the acquiring company," says Rhodine.
Key take-away: If you are worried that you will need to forgo your entrepreneurial ways, spend some time during those first few months of post-acquisition integration getting to know what makes your new employer tick. There are plenty of opportunities to go from entrepreneur to intrapreneur. Use your first few months to find them and build the relationships that will help you make your intrapreneurial endeavors a reality.
*Disclosure: I have been at IHS for the past 20 months. This article represents my personal work and is in no way representative of the perspective of IHS.