I’m no stranger to the acquisition process; several companies I have founded or led have been acquired over the past 15 years, including digital consulting firm ARQ Group, which was acquired by NCS (a subsidiary of Singtel) in March 2022 for AU$290 million.
In that time, I have experienced first-hand not only some of the immense challenges that can arise from being acquired, but also – and ARQ’s acquisition by NCS is testament to this – the remarkable benefits to both the target company and the acquirer when it’s done well.
Yet while you’ll often read about acquisition through the lens of the business being acquired, it’s less common to be given any insight into how to successfully manage a merger or acquisition, or the ins and outs of post-acquisition dynamics, from the larger business’ perspective.
Based on my experiences, here are some of my key insights for ensuring a successful transaction if you’re a founder, business owner, or executive in the market for a winning merger or acquisition.
Be crystal clear around positioning
Have the ‘intent’ conversation early on. Both parties need to be satisfied that the acquisition is going to work for them. If your goals and objectives are in alignment from Day one, the rest should follow.
When acquiring a business as part of your growth or innovation strategy, it’s essential you recognise what innovation you’re trying to bring to your business. What’s new? How and where does it fit, and if your intention is to retain the two brands, how will you successfully integrate the new business in such a way that it doesn’t lose its core DNA, culture, or purpose.
ARQ-meets-NCS is a great example of an integration where the foundations for success have been laid. At ARQ, our culture and vibe were fairly relaxed, whereas the Singaporean-headquartered NCS is more formal. Yet because both parties came together and were committed to respecting each other’s ways of working, it’s become a great opportunity to learn more about – and really enhance – the new and evolving global company culture.
Square pegs don’t fit in round holes
When you take an entrepreneur who has built a business and thrives on running it, and transplant them into a big corporation, typically one of two things tends to happen.
If you insist they become a ‘corporate’, you’ll probably fail. A better approach is to identify the spark that ignites them and that thing they’re really good at. Giving them the space to keep innovating and doing things differently is likely to keep them engaged and excited to help grow the business.
Prior to ARQ being acquired, I had sold other businesses and experienced the flipside of an acquisition not going as well as it could. In one, I was asked to pivot from founder to Head of Sales, even though my career success had never really involved being directly responsible for sales. To be suddenly managing all that paperwork and reporting, let alone dealing with the inevitable rejection when a sale falls through, I just couldn’t do it. Needless to say, my career in sales was short-lived (and my core skillset underutilised).
Work it, to your advantage
I have a lot of respect for NCS and how they’ve approached the various acquisitions they made in fairly quick succession. They took the time to get to know us as people, not just as businesses; to understand our strengths and how they could maximise those for the benefit of both businesses, our teams, and ultimately, our customers.
An entrepreneur is inherently someone who thrives on moving fast, generating new ideas, and bringing them to life. So, if you’re planning on acquiring a business that is founder-led, make the most of your resident entrepreneurs. The key question should always be ‘How can I best utilise you and your team/s to help us grow?’
It’s worth noting that some entrepreneurs will naturally move on post-acquisition as the new corporate structure isn’t suited to them and, realistically, if they’ve worked for years to build something and then they’re offered a large pay check in exchange for it, some might relish the break, or go off and start something new. That’s OK, they’ve earned it.
Disrupt or be disrupted
To be successful, every business needs to be innovating and planning ahead for the next phase., staying a few steps ahead of its competitors.
Big corporations typically do this slowly and aren’t great at it – too many people, reporting layers, and processes, all of which slow innovation down. Startups and small businesses have more scope to do innovation well – and quickly – because they have to. In a startup, if you’re not disrupting, you don’t exist, so that sense of urgency in innovation is critical.
In the business of M&As, ensuring the founders or owners you’re dealing with retain the flexibility they need to continue to innovate and disrupt is key.
From a founder’s perspective, when your business is acquired and you intend to stay on with the new entity, success comes when you’re given the wings to really soar within your business and to support the multiple reasons you were acquired.
It’s being empowered to integrate innovative thinking, pace, and agility into the larger organisation in order to drive it to keep growing; to stay fresh and ahead of its competitors.
For the acquiring party, careful planning and implementation of an acquisition will result in the integration of an invaluable pool of resources, skillsets, values, and inevitably a better business. Everyone wins.
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