Timing, acceptance, and corporate culture
No two M&As are alike, and the more you know about them, the better prepared you are for the unknowns.
Westwood’s long-term plan includes organic growth and the strategic procurement of companies and people that align with our values and vision. Over the years, we have entered several new geographic markets and have learned that no two opportunities are alike. When considering a new geographic location, there are always a variety of entry options to choose from. For example, we might open an office and then staff it with existing employees, relocate a senior leader to drive the local strategy, acquire local experts, or procure a local and established firm and kick-start national expansion. Or, we might do a combination of those things. Westwood has experienced all of these scenarios, but I am certain we haven’t experienced everything
that goes with them. There is always more to learn.
As with any opportunity that presents itself, I believe that success requires the backing of a larger strategy and alignment with our business objectives. Westwood’s strategic plan calls for increasing our revenue over the next three years through organic growth and acquisition. There are times that we look for acquisition opportunities where we can grow a particular market in a particular geographic location. Other times, we seek to grow certain markets with less of a focus on where
those opportunities present themselves.
For example, we completed an acquisition a few years ago which focused on both residential market growth and geographic expansion. The talent and experience of the people we acquired were the reason for pursuing the opportunity and achieving the success that we did. Westwood was able to quickly build name recognition, enhance our local position, and expand regionally. It also set the stage for future acquisitions in the same location.
We also recently acquired a great group of eleven people in a place that was not on our radar. Our strategy was to grow our power generation group by leveraging more talented and established resources to handle and increase workload. Our newly acquired team had the education, experience, relationships, and the unique expertise to expand our service offerings. It really didn’t matter much where they were located, they were the right people to have on staff! Better people. Better results. Our people are our greatest asset.
Through our learning process, Westwood has become pretty good at focusing on our direction and doing our due diligence. Even still, there are going to be things that are tough to predict or plan for. Three biggies are market timing, market acceptance, and corporate culture.
Market timing. This is when all of the stars align and we can see opportunities clearly. Or so we think. Westwood has opened offices in locations where we felt certain of our success – only to have a shift in a market economy just after we were handed the keys to the front door. These situations are out of our control. The key to survival is having an exit strategy; knowing if, when, and how to act, rather than react.
Market acceptance. Anyone will tell you that it is difficult to break into a new market, especially when there are highly respected and well-established firms already there. Acquisitions should greatly increase our odds of success, yet it can be difficult to foresee how newly acquired clients will respond to the transition. Due diligence to avoid any potential conflicts of interest and quickly demonstrating the advantages of the blended companies will help build acceptance and promote new client retention.
Corporate culture. In our business, the greatest asset we have is our people. Westwood works hard to instill strong values and create a positive work environment – as do the people and companies we seek. Whether through strategic hire or merging businesses, success in blending people and cultures is found when we engage early to discover each other’s personalities and principles, and enable people to share their knowledge and leverage new expertise.
Speed in transition of people, technologies, processes, and products is also vital along each step of the way – though fast is not always best. The rate of speed will vary depending on each circumstance and each step being taken.
Working with Zweig Group, Westwood recently completed two strategic acquisitions. In December, we acquired Pogue Engineering & Development, Inc., out of Dallas-Fort Worth. And, in February, Kadleck & Associates, Inc., also out of DFW. I am happy to say that we are already experiencing success in leveraging each other’s expertise to expand our mutual opportunities. As we continue our growth plan, we look forward to the next opportunity. Even though there will always be things we can’t predict, we continue to learn and become better prepared for what lies ahead.
Paul Greenhagen is president and CEO of Westwood Professional Services. Contact him at firstname.lastname@example.org.
This article is from issue 1147 of The Zweig Letter. Interested in more management advice every week from Mark Zweig, the Zweig Group team, and a talented list of other guest writers? Click here for to get a free trial of The Zweig Letter.
About Zweig Group
Zweig Group, three times on the Inc. 500/5000 list, is the industry leader and premiere authority in AEC firm management and marketing, the go-to source for data and research, and the leading provider of customized learning and training. Zweig Group exists to help AEC firms succeed in a complicated and challenging marketplace through services that include: Mergers & Acquisitions, Strategic Planning, Valuation, Executive Search, Board of Director Services, Ownership Transition, Marketing & Branding, and Business Development Training. The firm has offices in Dallas and Fayetteville, Arkansas.