Acquiring an opportunity
When the company you acquire has better ideas than your firm’s, you have to remain open to change and be willing to learn.
Acquisitions help companies in many ways. They enable access to the professional talent, revenue, and market share that would not otherwise be readily available. Acquisitions also provide insight into new and potentially better ways of doing things. The challenge with the latter is being open to change and leveraging what is learned without compromising workplace culture in the process.
When considering companies for acquisition, it is important to look for those with similar cultures. When cultures are not aligned, the potential for success greatly diminishes. A company’s culture is who they are as an organization, which includes their standards of practice. It is difficult to anticipate how these standards will differ between merging companies until the acquisition is complete. In a few of the acquisitions Westwood has made, we’ve discovered post-acquisition that some of the standards of practice were different between our company and the company we acquired. We have discovered that getting the organizations aligned around a common standard of practice comes at a cost, sometimes one that we weren’t anticipating.
After one acquisition of a smaller firm, we discovered differences in how their team utilized CAD software to design projects. Both of our companies effectively produced quality deliverables for our clients using the same CAD software, although the firm we acquired utilized a more efficient process. On the surface this sounds really positive. However, to implement their process would require a change in our standards of practice, which, as I mentioned earlier, is an element of culture and therefore a company’s sacred ground.
The problem we faced was complex. The acquired employees were frustrated and felt they were taking a step backwards having to use a less-efficient system. This situation increased the risk of losing good employees if something wasn’t done to solve the problem. Conversely, modifying Westwood’s current standards of practice meant that our existing project teams would be forced to change. This, too, could lead to frustration and increase the risk of losing good employees.
We needed to move quickly and solve the problem. Here are my thoughts on balancing this type of culture clash:
- Engage both sides in the discussion. Any significant change requires a full assessment of the value of the new process before implementing the change. When an acquired company has a different standard of practice and prefers their own methods, it is important to understand their process and the value it would bring to the acquiring company. Getting feedback from experts in both companies will provide a unique perspective to draw from when assessing the value of any process change.
- Bring in an outside expert. Getting input from an industry or technical expert external to the company can provide an unbiased perspective on the process change being considered. The expert’s insight could help identify where speed, accuracy, and consistency can be gained in either process. This type of external assessment could help identify when a change can directly benefit our employees and clients, and support our bottom line.
- Conduct a system comparison. Summarizing the team’s discussions and assessments in a side-by-side comparison provides leadership a tool for decision-making and communication. Pros and cons and a vision of the current and future state, with and without the investment, could be part of this comparison. In the end, it should help identify the similarities and differences between the processes so a solution can be derived and a path forward determined.
- Weigh the benefits and costs. Whether the choice is to stay with your current process or implement a process from an acquired company, there are benefits and costs to consider. Don’t change and you risk losing the good people you just acquired, falling behind in technology, and/or missing out on increased revenue opportunities. Change and risk losing existing employees and investing in unplanned initiatives and their perceived ROI. Both can feel like a gamble. As with any financial investment, it is important to determine the cost and perceived value that would come from any change. If the cost is relatively low compared to the long-term benefit, it might be a no-brainer to change a process. Conversely, if there is significant up-front investment and the process will be hard to implement, it may be determined to delay or not move forward at all.
- Create and communicate the plan. The decision to go with a new process can be hard on those who are forced to change and on those who are required to implement the change. Whatever is decided, defining the plan and clearly communicating how the change will impact the team is critical.
- Weigh in from the top. A strong message of support from the president/CEO helps communicate that a change to a standard of practice – or the decision not to implement the change – is critical to the success of the business. This communication provides an opportunity to engage employees, get people onboard, and demonstrate what it really means to work together toward the same end goal: success for the company, its employees, and its clients.
Part of Westwood’s culture is to be a leader in technology. Through an acquisition, we found that we were doing things that risked that position. It was an “Aha” moment. We thought we were leading and found we could be better. Advancements in technology happen fast and companies cannot afford to get complacent. We must continually seek better ways to do business – ways that are beneficial for clients. This includes producing work faster, more accurately, and more cost effectively. With each acquisition, it is important to ask the right questions to determine if processes are aligned, identify where there are gaps, and work to create solutions that bring the team together.
Early on, Westwood didn’t realize the depth of opportunities and challenges we would encounter during the acquisition process. The real value of M&As for Westwood is that they align perfectly with our brand promise to retain better people and deliver better results. Acquisitions bring new experiences, talent, and ideas that can help propel us to the next level. We get the most out of an acquisition when we are open to change and are willing to learn from the companies we acquire.
Paul Greenhagen is president and CEO of Westwood Professional Services. Contact him at email@example.com.