Over my career, I've had the opportunity to lead the integration of close to 60 global acquisitions--all in the technology space. From 1998-2002, I led the Cisco HR Acquisition Integration team during a period in which we acquired and integrated over fifty companies. Since then,
I have worked on several deals in other organizations. The experience was awesome but it was complete crazy at times. Few organizational changes are as dramatic and stressful as an acquisition.
From these experiences I learned a great deal about the fundamentals of navigating the drama and tension within an acquired company and delivering a motivated team into your organization. If your company is considering its first acquisition, or if you have seen more mistakes than you can count in the acquisition integrations on which you have worked, here are some simple tips and observations to help you on the next one.
The moment employees at a company are notified that they have been acquired, all hell typically breaks loose--and emotion and stress immediately start rising. The best way to walk into that situation as an integration leader is to be clear on your goals and your focus.
Your first job is to build trust. Getting through change happens faster if you gain the trust of the acquired company. This starts by giving everyone the integration game plan from day one and all the necessary information about when they will find out about job titles, compensation changes, reporting changes etc. Tell everyone what will happen and when it will happen.
Be transparent--Tell everyone the bad news from day one. If there are layoffs or job cuts or offices being moved, let them know right away when that is going to happen. If you don't know the answer to a big question, then let them know when you will find out. Every single time I have seen key information withheld because the acquiring company thinks the employees can't handle it, trust is destroyed. Human nature is such that if you are not telling me something, then it can only be bad news.
Limit the people from your company who can talk to the acquired company to just the key integration team at first, because outsiders will often create fires by answering a question incorrectly. Misinformation erodes trust, so keep people away who don't know the game plan. At Cisco, managing my company and keeping many people with good intentions away was often more challenging than working with the acquired companies. I kid you not.
Trust is also best built by solving problems FAST. If a key employee is upset that their doctor (who is treating her son for a special disease) is not on your health plan, find a way to take care of that immediately because what the employee is really telling you is that unless you fix this, he/she is going to have a hard time delivering value to you.
Building trust also involves building relationships, especially during intense integrations. I have always believed that an integration team should live onsite at the acquired company until the deal is officially closed. While there, you should hold employee communications meetings on a regular basis, but most of all, you need to "hang out" and get to know the people, the culture and what matters to them. I honestly think some of the best work I ever did on any acquisition was never in the office--it was at a restaurant, caf or in the break room. Informal settings are where people are candid, and where they ask the hard questions that matter most to them. You want to know this information so you can help. These are the settings in which I always got to know people and build trust. In addition, these environments allowed me to learn a lot about the strengths and weaknesses of the organization and key players within it. And that information helped me learn how to best help that organization go through change.
On the issue of trust--a key indicator of whether you will be in trouble in an integration is how well the organization you are acquiring trusts their own leadership, the leadership that is working with you on all the details of the integration plan. Whenever I've had an acquired company that has a new CEO or a leadership team that is not trusted by the organization--we have had tons of problems and challenges because everyone fears the leadership does not have their best interests in mind.
First Impressions are so critical. How you present yourself to the company on day one and in the first week is HUGE. Be present, listen, let everyone know the plan, and start aggressively answering the toughest questions. One of the interesting barometers I have used for how rocky an integration is going to be is what the first questions are to me from the acquired CEO. They will almost always fall into two camps; If they ask first about their compensation and their special employment contract provisions first, then we are going to be in trouble, but if they ask about what the plans are for their employees and begin to fight to support their team and how we map them into our compensation structure, for example, then we often are likely to have a smooth ride.
The last lesson I would like to share about my integration experience is that the more you help the acquired company integrate themselves into your company, the more likely you will be successful. I found that when I represented myself as the integration "tour guide vs. the integration commander, it framed a better relationship and kept the acquired team in an active role vs. the passive role of "being acquired". I would tell the teams "I am here to help you integrate your company into my company," and then I would share our lessons learned from prior acquisitions. Avoid placing the acquired company in a passive position. They will be more energized if they feel like a co-pilot instead of a passenger and you will set your integration up for success.
I could write a book about the many mistakes I made and the many issues that arise during acquisition integration but I hope these highlights are a good start.