Challenges of Go-To-Market Integration

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Very well, thank you very much. Happy to be here. Thank you everyone for listening in.

Thanks for taking the time to hang out. Can we kick things off with a little bit about your background?

My name is Massimo Bellizza and I've been working for Cisco for about 17 years which almost 14 in acquisition integration. I have a legal background, actually I have a law degree and an MBA from Santa Clara University. In integration. I work in many different roles. I worked in the functions in FP&A finance acquisition integration, dealing with the financial reporting and making sure that the Cisco sales team was compensated correctly. On acquired company sales. I work on sales compensation acquisition integration and that is the migration of the acquired company sales team into Cisco compensation plan. I work a lot on customer migration which of course has also an important impact on sales and go to market and that is the migration of the acquired company customers into Cisco quote to cash processes. Most recently I worked With Cisco Corporation, corporate development has integration with for Acacia and I also lead the team that works on the migration of acquired facilities.

You know a thing or two about go to market integration.

Yes, it's been definitely one of the most debated and interesting topic when we talk integration.

I'm curious if the law and MBA backgrounds helpful in any way when approaching those areas.

It is very helpful when you connect the deal structure into the operational piece. We work very closely with our corporate development team around deals. When we discuss deal structure, it is I found very beneficial to understand some of the legal terms and somehow translate them into their operational impact. Maybe not that much impact relative to go to market, although in some cases there might be some implication, especially if there are complex deals where you might have approval processes between announce and close and other things that could be useful. But I found the combination of legal knowledge and the operational background actually pretty good for integration.

How early should we start thinking about go to market?

During an acquisition, go to market is really critical because generally it's almost unavoidable on large deals. We know that the majority of the deals that companies do, sometimes attacking talent and many of those might not have a go to market play, but it's almost unavoidable when companies do do a large deal to have a go to market element that we need to take care of. And generally the go to market is extremely critical for the achievement of the revenue synergies. Revenue synergies, especially in the ITAC where I work, are the synergies that mostly drive the acquisition process. We don't buy companies because we want to cut costs and optimize their way. We buy companies because we want to have revenue synergies and the markets. And so having the right go to market strategy, the right go to market plan to achieve the revenue strategies is critical and almost always one of the element of success for the integration.

So start thinking about it early.

It should be part of the pre commit process. Because reality is that you want to start thinking as soon as you have the high level synergies. Because generally you start debating with your CFO what are the right level revenue synergies and then as you start cascading down strategy into execution, then go to market almost always always becomes one of the lever for the achievement of the revenue synergies. So yes, generally as soon as the revenue synergy is going to start debating at the lower level the go to market as a lever to achieve those synergies. So yeah, the debate normally starts really early.

What are the challenges of go to Market integration.

One of the challenges that I always find is, especially when you have synergies that are achieved through full integration, is the migration of the acquired company sales team into the acquire. That is because generally the compensation plans, the way deals and business are compensated might be different. Also because a lot of times you have a bigger company buying a smaller company and therefore normally the bigger company already has a direct sales agent, the direct account manager. But normally what happens is when you integrate the acquired sales team into your bigger company, they don't really play the direct account manager role that they used to play. Normally they may play a product specialist role or a business development role. And therefore that's a big change for them. If you adopt that, you might be changing also the way they are compensated and you might be changing changing the way the product has been sold in the past and so on so forth. You might change the route to market is a lot of change. One of the critical things that acquire should pay attention is the retention of the sales team. Addressing all the most critical element of changes when the sales agents are migrated from one company into another.

Yeah, that's a whole big thing of its own. Because these are the things that would disrupt things quite a bit. Especially if you're changing compensation and the way they sell. Are there any other areas that also come in play thinking of like underpinning systems other go to market?

Yeah. Another thing to pay attention is the legacy customers and how much tender and care they require. That is for different reasons. One reason is because especially if you buy a team and you want them to start working on your NPIs on different things, you might need to consider how much time they still need to spend on legacy customers until those customers are completely phased out. Also those customers may have long contract. You may need to not only to keep selling to them, but could keep supporting them for a long period of time. And until those customers stay on the legacy systems on the legacy quote to cash, then the majority of the integration is somehow installed. Because then if you have the quote to cash on the legacy system, then you also need to keep the procurement to pay on the legacy system because suppliers to be supported, et cetera. So the legacy customer base and the successful migration of the customer base is normally is the long pole in the tent for the completion of the system. Integration might also be painful. If the home of these customers in your acquiring company is very different than what those customers are used to. Maybe you're changing the products, maybe you are changing the route to market. They were used to buy directly from the target company and now they need to buy from a partner from you. Again, they might change the account manager, they may change some of the terms and conditions of the contracts might not be acceptable that by acquirer. So they might require a negotiation. I would say the larger the customer and sometimes the more complicated that migration is. That can be really critical because has an implication both for the sales team and for the system integration. So that's an area to pay attention to.

Let's talk about the comp plan. How do you manage that when you are acquiring a company, bringing their sales reps over, you have a different comm structure. How do you walk through that? Do you have any examples of how do you make that go smoother without upsetting people?

Yeah, it's not easy. Someone told me that it's more of an art than a science. It's not so much about the mathematics of the dollar compensation, of course that's important, but it's also around what role those people will play in the bigger company. It's not just analyzing pay slips and paychecks and try to understand how to give them the same amount of money. That's intuitively that might be the work, but it's not. The first thing that you want to understand is what those people are doing, what is their strength. And again, if you consider that generally, especially in tech, we buy success successful company. We want to understand what the secret sauce why have been successful in selling their products. How can we make sure that we maintain whatever is the secret sauce as we integrate them into our company? So you need to understand what they do, what is the secret sauce and then try to replicate that on the larger company as you integrate them. It's not easy because on the other side, generally you have a sort of predefined set of sales compensation plans that you need to try to squeeze them in. You might need to have an existing sales team that might already do some of the things that acquire sales team is doing. How do we leverage the acquired sales team as we onboard them on the acquiring company and then start working on the right sales compensation plan, the right combination between base salary and incentive and so on so forth. Knowing that not only different companies have different proportion in terms of base salary and commission, but even the same company within different countries there might be differences. For example, in my company at Cisco, the sales compensation plan in US or account manager has different percentage of base salary and commissions than the same plan in Europe. Culturally the two areas are different and you have different approaches. So there is a lot to think about. But I would say that the mistake is that not focus primarily on the total compensation. That of course is very important. But start focusing really on what the sales team is doing, what they're doing and you want to maintain and how to replicate that as you onboard them in the larger company.

Sounds like that scenario. You build a relationship by spending that time understanding the way they do things, their secret sauce. And then probably gives you an understanding of if you do make changes to that compensation structure. You get a sense of how disruptive that would end up being. Or essentially working with their team to come up with something that could potentially be even more favorable.

And again, sometimes those conversations get emotional. There's no doubt about it because those are important factors in their private life, the way they get paid, how much they get paid. So it's definitely important. But you also want to highlight what are the opportunities of the synergies between the two companies. Yes, maybe you're going to get the sales compensation plan that is a little different than what you had. But now you have the support of a larger organization that can allow you to shorten your sales cycle. You sell more just because you sell faster. Or maybe there are other advantages. So it's really looking at the overall combination and synergies. You have the high level synergies, but as you work on the strategy then you start translating those synergies into lower level, more executable deliverables. This is one of those where you want to focus on.

Yeah, that's really good examples. What about when you reference the way they sell? Have you had that where you've had to integrate a company that just totally different way of selling. You gave an example of selling direct versus through partners. How do you approach that?

That's a tough one. And again, there might be different changes as you integrate the products through your company. You may even sell the product itself in terms of maybe you change it from a standalone, maybe you sell it in combination with other things. But the raft to market change normally is pretty tough because you start with the target company where the sales agent is a direct account manager is selling directly to the customer. And then we start telling that sales agent, hey, your customer is not big enough for us. He needs to go and buy through a partner. And by the way, we are changing the product. And now you are not an account manager anymore, you are sales specialist. And you're just going to support our account manager only on this product. And by the way, what you were selling yesterday was giving you 100 now might give you 85 because we need to pay the partner margin. So you need to sell more to make the same amount of money. Because now there is a middleman in between that generates generally a lot of questions. First questions that hey, we were fine selling directly to this customer. Why do I need to give 15% of my revenue to a partner that I never needed in the first place? It's a challenging, again, challenging scenario, challenging conversation. Of course the reason why we do that is because of scalability. When you go into a larger company, the partner ecosystem is so critical to allow the larger company to scale to reach segments that will be too expensive to reach directly. And other reasons. But of course when you get into the midst of the day to day job of a sales agent, that high level strategy might make sense. But you're still upset, right? You still need to make sure that you understand that those changes can be tough for the sales agent.

What's the approach when it comes to the timing of all this? From what I understand, a lot of integration you want to get done sooner the better. But it seems like with the go to market stuff, it's pretty easy to grow things off or disrupt. It is the same approach. Are you trying to rip the band aid off, get this done as quick as possible, or does it vary deal by deal?

I would say vary deal by deal. You really want to go through that process of going from the revenue synergy that you promised to your chief financial officer to the elements of the plan that would support those synergies, because those are normally very high level. Then you start deciding, okay, how do I reach those synergies? You need to have that lower level of objectives before you start fully executing. That might require some time. So I see go to market not necessarily as one thing that happens day one plus 90 after close, but probably it's going to take some more time. This said, there are generally some natural inflection point that often I use to start progressing on some of the integration activities. For example, generally when you start thinking about migrating the acquired company sales team into their new compensation plan, you probably want to start leveraging your annual cycle in whatever the company that you work for, where you start cascading down the targets for your sales team anyway. Generally many companies have this annual cycle where for the next year they're going to start giving targets and test getting down and giving the new sales compensation plans if there is an adjustment. Right? So leveraging that company process to integrate the acquired company team into their new sales compensation plan, normally that is a natural inflection point. Because you leverage an existing process, you don't need to recreate the wheel on the integration side. So that's normally one possibility. In terms of timing, that can happen generally within 12 months from close. And then of course there is all the other integration elements that might take longer. For example, if you want to start selling the acquired company products on your acquire price list, that requires a new product introduction and requires some works on the verition side. If you want to shut down the legacy rp, that requires moving all the legacy customers on your system and that takes some time. I feel like some of the elements of the go to market can be actioned again a little sooner than others. The transition of the quote to cash from the acquired company into your acquiring company, that's probably the one that might take the longest. The other things that you can do sooner, for example, if you want to start creating some synergy and some connection between the sales team, you might start sales team compensating your acquirer sales team on feeds opportunities or whatever is the best way coming from the target company. So you can create some collaboration within the two sales team relatively easily. You might need some manual process to document all the opportunities and pay out of those opportunities, but doesn't require some long integration work.

Sounds like the right approach where you can enable a collaboration early. Seems like a lot of these operational components quote to cash may take time.

In general, if both companies have partner ecosystem, you can even leverage some of that collaboration within the partner ecosystem where you have programs on both partner ecosystem where partners from the target company might resell products from the acquiring company and vice versa. So there is a lot that can be done in terms of collaboration and strengthen that selling. Knowing that truly you're going to have only one joint salesforce and one system only when all the integration would be completed. That's going to require some time.

Generally, what does the enablement look like to make this actually happen?

There is many elements. One of course is the migration of the acquired company sales team into their new sales compensation plan. So you actually move the team, you onboard the team into their new roles at the acquiring company and you start paying them out of that new sales compensation plan. Now, until you have a full operational integration, that compensation process might be manual because you're going to have the sales team now is in the new sales compensation plan. They're a Cisco entity or your acquiring company entity, whatever that is. But the quote to cash is still taking place on the other legacy system still on target. So that piece can happen Quickly. But then moving that quote to cash and all the underlying process into the quant company, it might take a little longer. That requires few things. The first one is the creation of the offer on the acquired company price list. The second is the setup of the customers on the acquired company price list. All the legacy customers need to be now set up on the acquired company. And again, that's important because if you don't do that, then you keep generating revenue on the legacy. You still keep those manual processes alive. So that's the most important thing. And then after you've done that, you're generally ready to start turning things off on the legacy system. You start turning off pids, you start telling customer, hey, sorry, this product can't be bought on the legacy system anymore. You start maybe sending end of life, end of support notices and things like that until you shut everything down. And now you have only one system on the acquired company side.

Go to market touches everything.

It does. And again from operation perspective is extremely important because it's basically the trigger point for a lot of events that if you don't shut down the go to market on the legacy, you're going to keep sustaining the legacy system for a long time. So is very critical because it's so key for the achievement of the revenue synergies. On the other hand is also key for the achievement of the full integration and some of the cost optimization that come from shutting down the legacy system and having only one set of systems and processes. It's not key for the synergies. It's not why we buy companies, but it's also an important aspect because then you start having maybe two salesforce.com instances or two booking policy and things like that. Eventually you really want to move to one system to optimize things.

Yeah, it seems like you really have to parse this approach out between what's tangible in the short term and then map things out long term, especially with a lot of those system integrations. Can we talk about MPI new product introduction? And this is something that I've more recently learned about, that large companies have a formal process when they introduce new products and things of that sort. How does that differentiate when it comes to buying existing products? Is it the same MPI model that you leverage? Do you modify it specifically for doing go to market integrations?

The process is more or less the same, although of course we have dedicated integration team that take care of shepherding the process. So you have some, let's say, additional support. But in terms of the linearity of the process is mostly the same. One critical elements in the case of integration is to understand how do you onboard the acquired intellectual property and offer into your price list. The first thing that you want to decide, which normally is the case but not always, is that do you want this offer to be sold only on your acquiring system. So that means that you want to move that offer from the legacy system into your systems and eventually shut down the legacy system. So that's the first decision. Do you want to sell them only from one erp? And once you make that decision, then you start debating, okay, what's the best way of selling those products? And take into consideration you go to market strategy and synergies. Maybe it's just the lift and shift of the legacy into your new system. So you just take as it is. You change maybe the names, but it's the same stuff. Maybe it's the same price, maybe even some of the same names in some cases. And that's pretty easy, but it's generally rare. Normally there are stuff that needs to be changed. The first thing that comes to mind is pricing. Again, a lot of times the pricing because of the discount structure of the acquired company might be different. You might still end up with the same net price because you might want to keep everything the same for customers. But reality is the price might be changing. Of course, if you change route to market, then the pricing changes completely because you go from one way of selling that might be direct to a way of selling that might be indirect. In that case, the pricing gets changed a lot. But you might want to change the way sold, maybe sold as perpetual license at the acquired company and you want to sell it as a subscription on the company that you buy. That strategy of the offer strategy is really critical. And of course it's the predecessor of the NPI process to onboard those products on your acquiring price list. This is with assumption that you want to migrate everything and you want to use your system. There have been instances in my experience where the strategy was to keep selling on two different places. The company kept the legacy offer, the standalone. And maybe they use that for a specific vertical, specific sales segment. They also enable the products on the acquiring company price list, maybe with some differences. So it's not completely unusual to have two sets of offer to pursue different customers in different segments. But generally that's a little more rare because it does create complexity operational. And of course you, you have two systems to support the, you know, basically offers that are very similar and is not exactly the most efficient way of doing it.

Not a template. You don't just modify your MPI template and call it a day. That it's very much the strategy that dictates how you're going to integrate the go to market. Can we talk a little bit about some of those considerations? Because I know we've touched on them. Generally we take in the sales team, bringing them together. Are we having them run independent? How are we changing the way to sell direct versus product? There are other scenarios. Is the fragility of the target company a big consideration when all this.

When you buy a company, generally there's always a downturn in terms of attrition. Just 1/4 or 2/4 after close people that for that reason they might not be bought or they might be poached by another company. So generally the first two quarters are the toughest in terms of attrition, in particular of the sales force. Normally when you announce an acquisition, the sales team start getting phone calls from competitors. Hey, if you're not happy, please come with me or whatever that is. That's definitely an element to pay attention to. And of course, a lot of times it's solved through the retention tools and retention strategy that the core company puts together to make sure that the talent that is needed is retained. But definitely that's an aspect to pay attention to. Again, you start getting the phone calls from the competitors. At the same time, you might be upset because all the changes that are happening, so you can see how that can be something that you want to pay attention to. So a good retention plan, understanding some of the dynamics, I think are pretty critical. And then of course, you want to provide to the acquired company and specifically to the sales team the end goal. Why are you going to stay in our company? We bought you you, right? What is going to make you excited about the future? That is really important. And everyone says, of course the sales team is always motivated by cash and by money. That's true. But there's also a component of really showing the strategy and showing what is coming and why you bought that company. If you're not good in giving the strategic message right away, then the poaching of competitors and the uncertainty from all the changes is probably going to take a toll. In terms of attrition, what's key to.

Making a good retention plan? I know it's one for the HR folks, but I figured you might have been exposed to it.

Yeah, no, I've been exposed to it. And we have different retention. Sometimes we have retention for key employees and then we have retention for other employees. I Think the critical things is really start thinking about not only what you need from the existing team, but also what you're going to need as you grow. That, and this I think has been particularly evident in the last two years, in the year of the great resignation, because the retention plan might work for the employees that you retain, but as you start growing the business and start hiring new people, those people are not covered by retention plan because they didn't come with acquisition in 2022. There's been so much change that you might have seen now a big portion of the team working on the products that you acquire that maybe were not in the retention pool. And so it's really thinking about the situation, how it evolves. Not always use the playbook and always just doing things based on the past, but really thinking through what is the team altogether, what is the evolution the team? How do we support the achievement of the synergies? Through leveraging the experience and the talent that we bought without making go away. So I guess, yes, it's mostly customizing the retention plan and again thinking that as the teams evolve, you're going to get some employees that are not covered by retention. And how do we keep those people?

What is that comprised of? Is that mainly stock options when you think of retention plans?

Yeah, could be different elements, probably. I'm a little outside of my expertise area, but. But yeah, generally it might be a combination of things. Stock is always the most common that I saw because it's vested into certain time period. Could be 12 months, 24 months, 36 months, whatever that is. And then once you have those, the other thing that you want to pay attention is the cliff. When you start getting into the 12 months, of the 24 months, of the 36 months, you start thinking about, okay, is anyone going to leave now that they have vested part of the totality of the retention plan? Start thinking about those timelines and how it that can impact the team.

Okay, the comps are given. How do you get folks excited about the future? I feel like the default is the opposite. Uncertainty and doubtful about the future. Is it around the narrative of the strategy for doing the deal? Is it how we're going to build a better customer experience? What are the big drivers that get people excited about the future?

The strategy? I think when it just makes sense having those two companies together and it's very easy and very natural to see the synergies and the combination of not only of the product lines but also of the sales forces, then that really becomes a powerful message that gives confidence to the team. And again, a lot of times it's not only about money. Money is an important factor, otherwise we would not be here. But it's definitely not the only factor that drives the retention of the sales team. In this case, the clarity of the strategic message is important also. Sincerely, how welcoming is the acquiring company? Sales team is also a nice way of creating that connection. As I said, having good strategy around how the two sales team would work together, what are the different roles and so forth, that's an important element. If you start having teams stepping on each other toes or having maybe some selling motion that are conflictual, where the two teams start getting seeing the others as a potential competitors, that's where things might go south. So that clarity in terms of the interaction and the synergies between the sales team I think is pretty key.

What happens if you are buying a company just for the product? Like they really don't have much of a sales team.

If you just buy intellectual property, then that might be easier. Again, one of the factors operationally could be the presence of customers. For example, you might buy intellectual property and all they have is they sell through partners or maybe they just distribute ip, whatever that is. But generally if there is not a go to market strategy and you just buy intellectual property, it's pretty easy from an integration perspective.

Does that just fit into your MPI model a little more directly?

Yeah, and sometimes depends because when you buy intellectual property alone, it's possible that you buy products that you're going to put on your price list. But many cases you buy intellectual property to build up maybe a functionality on your existing product. So you buy something that is not going to be sold as a standalone. You buy something that is going to make better one of your existing products. And in that case it's definitely easier because you don't have necessarily a separate mpi. Of course you have deliverables and milestones for the achievement of those additional functionalities and you want to make sure that you make the team successful to achieve those. But in terms of the operational piece, it makes things easier because again, it's an additional release of an existing product.

Have you ever bought a company where you got the people but no product?

In some cases actually a couple of situation we did an asset sale, so it was more like we call it Aqua Hire, where it's really around hiring people and that's about it. In some cases this could be people that do something that becomes core or critical to your existing business. If all you need is people, then sometimes we find it Easier to do an asset sale where the legacy entity and all the additional assets are left behind and we only buy. And I know that the term buys that is not nice by the people, meaning we really hired the people into Cisco. Of course, in some cases it's a combination of intellectual property and people. But doing an asset sale, from my perspective, is not even exactly an integration because you don't need to take care of legacy processes, go to cash. Everything stays with the legacy entity. You really need just to take care of onboarding the people, make sure that they have what they need to be successful. So in some ways is a very simplified integration where the focus is mostly on people and you don't inherit any legacy processes because the entity stays with the seller.

Not as easy as just the product, but easier.

Yeah. In that case, you really want to make sure that you focus on people and you give them what they need right away. Because again, it's going to be a sort of onboarding process like hiring, I don't know, 50 people in one day. And we want to make sure that they have everything what they needed. Hiring 50 people in one day and day one, you give them very specific objectives in terms of what they need to achieve because that's part of the synergies. And so it's important to act fast and give them everything that they need right away so that they can achieve those objectives.

I want to role play here. We're making you the head of corporate development. We're going to acquire a company that's got both people and product. An ideal world. It doesn't always happen ideal, but ideal world. How would you shape this thinking around, go to market, really doing it so you're prepared well to integrate.

The first thing that I would think is, okay, what did we promise to our chief financial officer to get the money to buy the company? Maybe we promise increase revenue 20%. Okay, that's a good start. But then you start going down from a strategy to execution and start understanding, okay, how do we make up that 20%? There can be different things that you can do. You might expand with the acquired company, you might expand the segments. A, we were not very good with commercial, but now with the sales team that we acquired and the product they acquired, we can approach that segment better. Maybe that's one tenet of the strategy. The other thing, maybe we can approach better geography. Hey, we were very good in America, but we weren't very good in Europe. Acquired company, sales team and products are going to allow us to approach those geographical areas or maybe now with the new products we can come up with package bundle that is going to be much more attractive for customers.

Right.

That's going to give us a certain percentage of growth. So you start seeing how, okay, we have this very high level increased revenue 20% and then you start going down into the sub level and the targets that will take you the 20%.

Where are we? Are we still pre loi at this phase?

Yeah, before announce for sure. Then depending on which company in our company probably wouldn't recommit the commit. But definitely before announce you want to have the strategy ready for day one. When you announce the deal, you want to explain to people why you're doing the deal and just telling them, hey, we're going to increase revenue 20. That's great. But you want to be able to explain in a die level how you want to achieve those synergies and what is going to be important going forward. Again, going back to the clarity of message to give people the right horizon in terms of what they need to expect. And again, you don't need to be precise 100%. You don't want to get into the weeds, but you need at least to have the high level tenets of the strategy so that people understand why you're buying and how you're going to achieve what you want to achieve achieve. So to me that would be the most important thing. And then as you have those strategy tenets at the lower level, you start planning how to achieve them. And we discuss a lot about the full integration and moving everyone on the quad company. That might be the right thing in some cases, but based on the strategy, maybe there is combination, maybe it's integration on this side. Maybe we keep the quirk company alone for a bit. Depends what's the strategy that you need to achieve. Level of integration is probably going to be the second thing that we'll be thinking about. After defining the lower level strategy objectives.

That'S when you start really planning out how you're going to integrate the go to market. Exactly who's involved with that.

There are a lot of people that can be involved in that discussion. Of course, the first business unit that buys the company is the first group of people that need to be involved. The integration team working go to market is very critical because they in some way they provide the insight into what is possible, what is not possible and what's the best way to achieve the strategy. And eventually at certain point you start involving the target company. You don't involve the target company right away generally because of course Especially if the negotiations are still going. But once you say you're going to buy them when everybody's on board and everything has been defined, then you start engaging the target company in some way. The plan is a little bit one sided when only the acquiring company starts working on it. And then as you onboard, the target company then becomes two sided where you also get the input of the target company and you start working together to achieve that. There might be a need of doing some adjustment. Hey, we thought we would approach this segment, but now that the target company is discussing with us, we realize maybe that's not the right thing. Maybe we need to do something different.

Sounds like that would be really important to make things come along smoother. And ideally you'd probably want to do that before close.

Yeah, ideally, again, some conversation, you need to adjust them correctly before close. You don't want to scare people away, but it's important to have them. As soon as you're confident that the deal is going to go through and you have the right way of position the conversation, then you want to have them even to start creating right level of expectations in the target company in terms of what's going to happen. Again, when you have those conversations before close, you just need to make sure you understand how to position those discussions while the situation is still a little fluid from a deal negotiation perspective.

What about when you're in that sign and close, you're just doing it all at once.

Yeah. In that case, generally at that point the deal has been already defined. It's just a question of the mechanics of the signature. So you can have those anomalies start having those conversations and make sure you.

Can address those after or after.

Before, if possible. Before.

Okay.

Provided that those discussions don't have a negative impact on the negotiation. What you want to avoid is that you start discussing things that might derail the negotiation. It's a fine line because you want to have those discussions as soon as you can. On the other hand, there might be some reasons why you might need to wait a little bit if you think that it might be disruptive to the negotiation process.

After deal closes, execute on the plan.

Ideally, you want to have that strategy defined before now so that you can communicate it at amounts and then they.

Have your whole comm plan for how you communicate it with your internal team, vendors, customers, et cetera.

Yeah, that's right. Sometimes you might not manage to have all the details and then you say, hey, stay tuned. Nothing changing. Day one. Everything's still the same. We're still working the strategy we're going to let you know and then in the case, it's important to follow up and make sure that you provide the message. But in some way that's a little suboptimal. But of course it does happen. If you don't have the time to finalize everything before and after.

What are the big lessons learned from doing this over the years?

There are many. One big lessons learned is when you look at the plan on a slide or whatever is presented to you, always start translating that into real life and what it means for people. So a lot of times, especially on the integration side, we might be a little one or two layers separated from the actual work that takes place and the actual impact of the integration strategy on people. So we need to try to bridge that gap and try to understand, okay, this is the plan on the slide, what does it mean for the acquired company employees? What's going to happen in their lives as the plan is executed? Once you start doing that, you start asking yourself a lot of questions. If you just take what's on a slide for granted without doing that sort of more introspection right around the actual meaning for people watching on the slide, you might be less effective.

I like that one because that makes sense. Okay, let's make this meaningful and really put a sense of reality to it.

I know that people like clarity and they always like to have things spelled out very crystal clear. That's good. But let's say ambiguity is not always bad. Ambiguity sometimes at the beginning is normal because it means that you start, you want to keep your option open, you have high level objective, maybe you're still not clear how to achieve that. And that's ambiguity. People ask you, are we going to do that? I don't know yet. They need to think through and in some cases they feeling that is bad. And of course if it stays like that for a long time, that is bad. But in many cases it's not necessarily negative. It just means you want to keep your option open until you start really understanding exactly what you need to do. So having the capacity of not always looking ambiguity as something bad, but understanding that there is some ambiguity that is necessary, especially at the beginning. As you start going and defining the strategy more and more, then ambiguity dissipates and it becomes much easier. But the tough part is at the beginning is dealing with ambiguity when the strategy is not fully defined. That's the tough part. As the strategy is defined, then becomes more of classic program management, project management.

Sort of work, acknowledging the ambiguity. And I Don't know if embracing is the right word, but being mindful of it and not looking at it necessarily as a bad thing in that phase.

Of integration is clearly around soft skills. It's really around communication. Making sure that the information that you have are clearly spelled out, that you start documenting the assumptions so that when there is that ambiguity that you focus on, again, the soft skills part of the job, that is a lot around making sure people understand what's going on and giving the right expectation. Because if you start bringing playbooks and checklists in that phase, that's when it fails. Because people are not ready to start discussing all these checklists and playbooks. They are still at the higher level definition of the strategy. They are not down in the weeds yet.

I like that. One more big tip.

Yeah, big tip is keep sense of humor. Just joke all the time. We always sometimes go two steps forward and one step backwards. Sometimes it happens. You don't need to be stressed out about that. You need to keep the sense of humor and perspective. That's one of my most important lessons, is having a sense of humor helps.

A lot in this industry. Absolutely. Can you teach me some Italian phrases that relate to M and A?

Do you have something that I can translate that you have in mind?

Give me like the deal is dead.

La fare morto, La Farremorto.

Okay, this one at the end, we're going to do. Here's to the deal. How do you say that?

We can say Aguirreal deal.

I'm not going to get that right. Aguirrea deal. Why can't I ask my last question, which is, what's the craziest thing you've seen in M and A?

Oh, God. I've seen so many things that are quite crazy. It was actually. It was a divestiture when we sold part of our business. It was a carve out. And I remember that I was in charge of migrating all the contractual assets, including suppliers. And one of the suppliers in Europe was the contract for the car rentals that we were using for some of the employees that were the best. And the company that was acquiring our business didn't have that suppliers. And we didn't want the employees to change car and do other things. So I learned that in order to duplicate that contract and move the contract with the supplier, we actually had to identify each car rented by each employee with the license plate so that we could create a sort of sow under the contract that listed all the vehicles that were going with the buyer versus all the vehicles. That were staying with Cisco. That was crazy. We really need to do that. I didn't have to do that, but someone did and I don't know who did it, but I'm very grateful to whoever the license plates of those cars.

Yeah, get into the details.

Yes. Sometimes you find out things that you will never expect, which is the nice part of the job. Unexpected.

Awesome. Well, thank you very much for your time today. I enjoyed the conversation.

Me too. Aguori al deal. Ciao.

Cheers. Thank you. Foreign thank you for taking the time to explore the world of M and A with our podcast. We love hearing feedback. Tag us on a LinkedIn post, add a review on Apple Podcasts. We'd love to hear from you. If you need help standing up an M and A function or optimizing one that you already have, we're here to help. And if we can't help you, we probably know someone that can. You can reach out to me by email Kisan K I S o n a science.com or you can text me directly at 312-857-3711. If you just want to keep learning at your own pace, visit mascience.com for a lot more content and resources. That's where you can also subscribe to our newsletter. Again, that's mascience.com here's to the deal. Views and opinions expressed on M and A Science reflect only those individuals and do not reflect the views of any company or entity mentioned or affiliated with any individual. This podcast is purely educational and is not intended to serve as a basis for any investment or financial decisions.