How to Improve the Sales Function During Integration

Hello M and A friends. If you're looking to improve your in house training, we have corporate training plans provided through the M and A Science Academy. Give your team members access to the best in class courses, templates and networking opportunities in the industry. Our Academy was designed to lead practitioners with the how to of M and A practices. If you're interested in learning more about individual or team plans, go to mascience.com academy it's also a great way to show your support for M and A science. Again, that's mascience.comacademy onto the interview I'm Kisan Patel and you're listening to M and A Science where we talk with deal professionals and learn valuable lessons from their experience. This podcast focuses on stories, strategies and what actually happened during M and A deals. Welcome to M and A Science where leading M and A practitioners share lessons learned from their experience. If you're interested in keeping up the latest from M and a science, visit mascience.com and subscribe to our free newsletter. We share highlights from our interviews and invitations to events as we build the greatest community of forward thinking M and A practitioners. Again, that's mascience.com I'm your host Kisan Patel, CEO and founder of M&A Science. We're switching things up on this interview. I reached out to an expert at sales and wanted to get some advice about building our own go to market here at M and A Science. But I also wanted to convey that advice to our future where we can look for opportunities and potentially make our own acquisitions. So it's a little bit of a blended interview. It's a little more focused on the early stage companies and thinking through building out the go to market for us, particularly moving from a single product to a portfolio solutions. Joining me today is Dick Dunkel, Global Head of Field Enablement at Celonis. Celonis is a data processing company founded in Munich, Germany that sells software as a service to improve business processes. Today we're going to talk about how to build out your go to market organically acquisitions. I know your background goes way more than that and you're also really humble about it, but can we kick things off with more about your background?

Yeah, sure. Thank you very much and it's a pleasure to be with you. And by the way, that was an excellent description of Salon. It's fun to work at a company where you have such a clear value proposition of helping companies to improve business processes to drive positive business outcomes and so I've enjoyed my time there. I've Been there for three years. A little bit of background on me. Maybe I'll start with my college career. I started out as a civil engineer. Actually worked as a design engineer for a couple of years and then I made my way into sales. My first sales job post graduation was with Xerox Corporation. They had excellent training and then I made my way into Xerox Engineering Systems so that I could tell my parents that I was using my college degree. And it was during my time at Xerox that I was introduced to actually my first sales book and I have it on my bookshelf behind me here. Spin selling excellent sales fundamental the basic concept of understanding a situation, identifying the problem, exploring the implications of that problem and then the needs payoff is the value of the solution. And so that really introduced me to a methodology and a framework for understanding customers needs and building value. From there I made my way into software and I worked for a company called Parametric Technology Corporation. So one of the great sales cultures and technology companies company grew from in the time that I was there from 300 million to a billion dollars in sales over the course of those five years in the 90s and I worked for a great sales leader but guy by the name of John McMahon who went on to become a five time CRO. He was the head of sales at a company called Blade Logic and then BMC and now he's on the board of directors at the company called Snowflake. Following ptc I worked for a number of very innovative technology companies. A short stint at SAP. I live in the Philadelphia area. So you work in technology, you don't have a lot of choices for technology companies in Philadelphia. So SAP's American headquarters are in Newtown Square Pennsylvania and I had a two year stint there but for the most part working with very innovative technology companies. I worked in data center hosting and application management services. I worked for a company called Digby which did location based marketing and analytics. Sprinklr, social media management technology company and now Celonis. We're helping to really revolutionize the way that companies identify business process pains and implement corrective measures.

You've been all over the place. I like how you started with engineering and I think within your roles it sounded like you did have an emphasis on engineering, the sales process or the go to market.

I think engineering gave me or reinforced the critical thinking and the problem solving and I think obviously so many jobs are that the development of or the use of spin selling for example and then the evolution or the creation of Medic which is A very well known sales qualification methodology that I coined the acronym in 1996 was really just out of a necessity of wanting to bring structure and process and methodology. Medic is something that has really proliferated very much on its own because it's so. It's motherhood and apple pie. I actually think it's similar to one of my other favorite Books is the 7 Habits of Highly Effective People. And I would never compare myself to Stephen Covey, he's a legend. But I think the basic idea is that these principles are timeless, right? The reason why people buy, the reason why people build lasting relationships in business, those are timeless principles. That's one of the things that I was able to package. I didn't invent the concept of a champion. It obviously is part of the equation.

It's, it's funny, you seeded this stuff with medic back in 96 and now you fast forward today and it's the hot thing when it comes to SaaS software sales. A lot of companies look for it. I know our company does. We look for anybody that's got experience working with Medic. So it's interesting. I don't know if you've expected that when you first started working on it.

And I'll tell you a funny story. So some. So I've bumped into people and they've said, how many Medic implementations have you done? And the answer is I've done one. And it was at ptc. So when I got to Exodus Communications, when I got to Choreo, when I got to sprinklr, they'd already adopted it, it had already been implemented. And I came in those cases, I came in sales management positions. And so I was basically helping to execute on a process that had already been framework that had already been implemented. Now partly that was because of my own personal network and the sales CROs for those organizations were people that I had relationships with. You know, I think about, for example, what we're doing right now with Medic at Salonis, we're really operationalizing it. We're using it as a framework to ensure that we're executing in a quality manner at every sales stage. We're also using it as a way to define how salespeople, the competencies model for salespeople. So you now have a competency model that's helping to identify where salespeople can get stronger and that's now providing a feedback loop into our training and development program. I think of it as a Swiss army knife. It has a lot of different applications. When you really implement it in a sort of a holistic and robust way. You can create a framework that provides continuous improvement.

It's gonna be fun stuff for us to talk about. Now, I asked you to come on the podcast and even though we have a very M and a focused audience, I had two folds. I reached out to you because I wanted to take advantage and get some advice on our own. Go to market as an emerging startup company, but then also look forward into how that comes in, play down the road when we may start looking at acquiring different products and solutions and how that would fit in. Maybe I can give you a little bit of the background on the business and then we could just pick things up from there. And I think some of the stuff is going to be pretty familiar with the experiences you've had. But the M and A science story actually started pretty typical founder story, where I spent about 10 years working as an M and a advisor, wanted to do something in tech, joined a startup, bombed out, but was very intrigued by the exposure I had with software engineers and how they use project management tools to manage developing software and thought we don't have tools like this for M and A. Everything's done in Excel. So that was the original inspiration for starting a company called Deal room back in 2012. And every founder mistake and I went through that whole hard learning. But the product in the market evolved. Where we started with a focus for investment banking, shifted to corporate, very focused on solving, diligence and then integration pipeline. And the product itself became a lifecycle management solution. It was around 2017, a friend of mine in marketing, Andy, encouraged me to get into podcasting which really evolved into a lot of the marketing content that we put out there. I think the podcast too, it had that underpinning mission of the industry is challenged with the silos that all these practitioners operate with very little standardizations or clarity on best practices. So the idea was to leverage a podcast as a medium to enable practitioners to share lessons learned, identify what are the proven techniques and that ended up turning into a whole digital media business that we run today. That was 2017, 2018, we spun off a product from Dealroom called Firm Room and the idea was to create a self service virtual data room. Because we're turning away these small little firms that didn't want to pay the price for Deal Room. I thought wait, we already have the technology, why don't we put it on its own instance and make it into a self service model which has been a great investment. It does really well. Then it was 2020 we started Agile M and A which was a book we published as a framework built around case studies from Google and Atlassian how they use these agile techniques. Uh, that was great just to create more of that open source initiative and think of it as other industries where we've seen it in the software space. Like Atlassian would advocate for moving to from a waterfall to agile approach. Also you look at HubSpot going advocacy for inbound like here's a general best practice to champion for the industry and that's for the idea with commonalities. Same challenges you have with M and A you find in the software space you don't have a lot of information in the beginning and you got to validate it as you collect more information. And how do you take things in an iterative approach? 2021 we launched our online academy where then we run an online school where industry practitioners are creating their curriculum, presenting courses that are geared towards educating other practitioners. So it's learning from the folks that are actually doing this now instead of the professor you might get that hasn't done a deal in 10 years. Very important then 2022 now we're looking at adding consulting services to help help corporations build their in house capability to do M and A deals and also talent helping them source talent to build their M and A function. So we're starting to get into this realm where things are getting diversified that we started with a single product. Now how do we go to market with a portfolio play before even getting to that dick, 90% of our sales right now are all inbound. Because we have all this content out there, we get a lot of inbound interest. How do you start with building an outbound pipeline?

Yeah, very interesting. I'll tell you what I've seen in terms of the out while the outbound is it obviously comes down to knowing who your target audience is, making sure that you're really clear on what are the target companies, what are the profiles, how do you sort through the list of potential suspects to begin to prioritize where your top targets are. And then I think within those organizations, right, you gotta figure out who are the target Personas, understand who the players are within those organizations, what's the value proposition, how are you different? What's the motion to reaching those people? We refer to it as demand generation and it's the things that you're doing on the front end before sales even gets involved. So it's the marketing, it's the events, it's a lot of what you're doing. So We're a larger company now. We're 2,500 employees. So we do things like events and webinars where we're educating potential prospects and then following that up with business development function. So we have a whole team of BDRs who are responsible for following up and taking those people that maybe have some brand awareness now and begin to develop them to the point where they'll raise their hand and say, okay, I'll have a conversation with you. That's a journey in and of itself. Right. Is that whole business development process of creating awareness, making contact, trying to deliver the right piece of content. A lot of what we're doing right now is very. We're starting to shift really towards very. A very vertical focus, industry focus. So we've created targeted industries in financial services and CPG and retail and oil and gas and high tech so that we can basically have a team of folks, we can develop some more targeted content, we can reach out and deliver our story to those targeted audiences. So that's a journey in and of itself. And then our business development folks make contact with the purpose of really trying to initiate a conversation. And then that's where we hand off to sales. And at that point then they're getting introduced to an account executive or a seasoned industry person that can dive a little bit deeper to see if there's really a value proposition or that we can. We strategically align what we're doing to the priorities of business.

That's a lot of stuff you got to put together to make that happen.

It is. It's a lot of moving parts and it takes a lot of expertise. I think at the end of the day you've got a universe of suspects and then you have to try to figure out who are your most likely targets within that universe. And that's where it all starts.

It sounds like first step one, find out who your ideal customers are, which you run inbound. For us. It's always either Director of corporate development or VP of corporate development. It sounds like from there now you're running that demand gen approach towards them where it's engagement of you join this event, join this roundtable, something maybe even content that may be very specific to some of those challenges that they would encounter.

That's right. And we're also like you, I think we're trying to foster a community. We just completed a world tour event so we did something like 12 cities and these were actually live events. So it was fun and exciting to be back in person again. And we did a live event in New York, we did one in Texas, we did several in Europe, San Francisco, Chicago. And so to bring like minded people into those locations, like for example, the one that we did in Houston had very much of an oil and gas theme. And so that was a great way for us to foster that kind of the value proposition that we're bringing to that community.

From there you have a business development team that would then engage with those participants to then identify, hey, are there some specific needs? Or identify where your solution could fit in. Then pass it to the sales team.

Exactly. Easier said than done. It's how the sausage gets made. But it's hard work and we've got tools that are helping our BDRs to manage campaigns. Sometimes you're touching somebody six, eight, 10 times before you get a response. But when you get a response, and a lot of times it's just about timing, you get somebody that finally raises their hand and says, okay, we have an initiative that we think this aligns with. We'd be interested in talking to you. Like a lot of things, timing is a big part of it.

Is there like an order you start with, where you start with something first to get things going and then tack on these other components?

Definitely. There is a campaign strategy that we follow and sometimes depending on how people react to the content, that may divert the subsequent content or the way that we approach them. So we do try to tailor the content and we do try to deliver an experience rather than just delivering content. We've all been on the receiving end of those campaigns that if you make it a little bit more thoughtful and with an eye towards. Certainly in our business, what we do is there's a significant educational component to what we do because we're offering something that people in most cases don't even know exists. There is an educational component that we have to navigate through that helps to guide our journey.

So you're focused on customer experience right out of the gate that hey, what does this look like? How are we going to engage with them and educate them? I would think you would just start hiring sales reps to go knock on doors.

There is some of that too. We have the mass, we'll say the mass marketing strategy, but then we also have very strategic account selling. Right. So we've got strategic account executives that are coming from these industries. Right. These are guys that have 15, 20 years of sales experience in oil and gas or financial services. They know the businesses, they know the clients. They know sometimes are familiar with their needs and pain points and technology landscapes where they can reach out to those leaders, say, I've got, hey, it's me, I'm over here at Salonis now and we've got something that we think really could strategically support one of your strategic priorities. Because there's so much noise out there, you're always competing for mindshare that we have to deliver the right message to the right person. We really try to take a rifle shot approach, do the research, understand the mode of the business, understand their strategic priorities. If you do the research, you can learn quite a bit about these companies. You can understand their corporate objectives, their business strategies, their targeted initiatives. And if you can align your messaging to those things, you're much more likely to get a response.

I find that very true. You can listen to a recent earnings call annual report, find a lot of this, especially for public companies. When you get that information, is that how you're building out the webinar, the content, or is that somehow enabling a team to go reach out directly with this narrative that I see you doing?

X all of the above, you think about global pandemic and war in Europe and supply chain challenges and disruptions. Those are top of mind topics for every executive making strategic investments. We're doing webinars on how to improve your working capital, how to manage supply chain challenges to prioritize delivery or a high priority client. We have a good sense of the challenges that are faced by a manufacturer, one manufacturer, they're all experiencing many of them are experiencing many of the same challenges. I think as you said, taking a look at the earnings announcement, digging a little deeper and we recently made an investment in a very interesting strategic research tool that is providing us with some insights and it actually maps the intelligence that you're getting back to our use cases and our keywords so that it even makes recommendations on which solution that we should be promoting and which executives we should be targeting.

That sounds like really interesting technology. Are you liberal to say what it is?

It's a company called Databook, so check them out. We're new users, we've implemented it recently and we are very bullish on what we think we can do with Data Book. We think it's very complementary to for example, a tool that we're using to do preliminary business cases. So we'll develop a preliminary business case as a way to say we believe believe we've implemented this use case in other companies in your industry. We believe we can deliver something like this for your organization. You can understand some of the outside in metrics. You can develop a preliminary business case that you can then take as your hypothesis. And then we go through a series of technical validations to ultimately show that we can do what we say we can. That we can improve on time payments by this amount, which is going to improve working capital. We can move the needle on issues with One of the key metrics that a lot of companies follow is otif right on time and in full delivery. And so there's ways for us to actually help identify how to improve that for companies. That's a quantifiable metric that we can actually measure. Previous to Celonis, I worked for a company that was in the social media space. And in social media you're measuring sentiment that's very difficult to associate with hard dollars. It's super important and super valuable. But what's really fun and exciting about Celonis is that a lot of the needles that we're moving are directly tied to hard dollar returns. So we've been able to present some very compelling.

That's why I like getting ideas from the software space. Software marketing, they tend to be ahead of especially our industry and M and a dick. What's the best way to build a sales structure?

So at the top level you have to think about sales org structure. So answering the following questions can help you to define this. What's market awareness? Who are your target organizations and buyer Personas? We talked a little bit about that. How disruptive is your offering? Is it a budgeted tool or a commodity? Or would it be considered an unbudgeted investment? How innovative is the offering? How are you different? How will you compete? What selling motion best aligns with your offering and your buyer? What selling motions does your competition follow? What buyer seller motions are your target Personas most familiar with? These insights can then lead to help you resolve the structural question of how will we generate demand? Who will be responsible? Will we employ a BDR function, business development function? Do we need outside or infield sales organization? That to me that's the organizational structure piece. The next level is sales culture. So recognizing that sales culture and company culture can be somewhat different. They're a reflection of each other. And finally we have sales execution. So this is where I spend most of my time and focus. The things that you have to figure out business model, contracts, pricing, common language, methods and frameworks. When you're starting to build a sales execution model like that's right after you've defined your business model and you've got your figured out what your contracts look like and what your pricing is, the next thing you've got to figure out is what's your common language? What are your methods and frameworks? This is where medic comes in fail stages. That's a framework discovery methodology. What's the process that you're going to use to engage in discovery? What's the framework that you're going to use? A repeatable framework that helps your people in the field to effectively navigate through a successful discovery process that reveals the needs and the opportunities and how you can provide the most valuable solution. Methods of business or financial justification. So you've got to have a financial justification, a method of technical validation, proposals, services, security terms. These are all sort of essential ingredients. And then once you've figured out your common language methods and frameworks, the next thing to figure out is your infrastructure. What's your tech stack? Are you using spreadsheets? Do you have a CRM system? What are the productivity enhancing tools that you're using for prospecting? Like what tools are you investing in for research? That's all under infrastructure. When I think about sales structure, to me it comes down to those three things. The organizational structure, the culture, and the methods and frameworks.

It's a lot of stuff to put together. Can I just hire you to help me do it?

Let me check. Can I get back to you on that?

Fair enough. I want to talk to you about leadership. When we look at changes as a company grows or as you do acquisitions and inevitably make a lot of changes, how do you bring in the right leader to drive change or identify them?

There is an important aspect to company culture and I think culture is an important part of it. But also sales culture. Sales culture is not necessarily company culture. It kind of is a reflection of company culture, but there are other aspects to it and it has to do with the leadership that you bring in. Like what's the personality of the leadership? What's the sales motion? What's the experience level? What's the complexity? How complex is this motion? How many people are contributing to that process? Is there a real sense of teamwork and collaboration? Or are you in a sales environment where you've got people who are very much individual contributors that can also contribute to it? You want to understand what do you stand for? You want to find leaders that obviously represent that. I think industry experience is super important. I've seen situations where you've had sales leaders come in to a small, high growth company and they come from a big company where they had the business card and the company logo and they're now going into an environment where nobody knows who you are. And that can be culture shock for the leader because he or she is used to walking into an organization and saying, hey, I'm from this world class bellwether technology company. You know who we are. Everybody's like, of course we do. And so you want to find somebody that is ready for the environment that they're going to be leading. And certainly when you're in the earlier stage company, you want somebody that certainly has a vision for where you want to go as an organization. But on a day to day basis, they have to be able to operate and function in an environment where sellers are having to survive and be successful. When you're working for a company where your brand is just not known yet, that creates a very different dynamic, certainly an important consideration.

What are the key things that you look for when finding that person? Because I get the culture thing and you get that where it's like, hey, they seem to be that person that talks a lot and ropes around the clock like I do.

One of the things I've seen is that there are leaders that sort of can do the very early stage thing and they're really good at taking a company from series A to series B or C. And then there's another person that's the person that can get you from series C or D through ipo and then maybe even another type of leader that gets you to real scale. And so I think that the experiences that they've had demonstrating that they can operate within that range. I worked for a great sales leader in the early days at one company and he was there for three or four years. The beauty of this was that he knew exactly what he was there to do. He was there to get the company from here to here. 0 to 200 million. And he was very good at that and successful at that. When they got there, it was like, okay, it's time for me to go do my next 0 to 200 million. Part of it is them knowing what their strength is, knowing what their sweet spot is. I think that certainly is part of it for us in what we do. It's very important that people are familiar with our space. You can go with the best athlete. Some people take the best athlete strategy. I'm not a huge believer in that. I think there's enough talent out there that you can find a great athlete that's in your, that's in your industry. So you should be able to get a combination of both. But other leadership qualities. The sales leader has got to be trusted and has to be really seen as a real Partner to the rest of the executive leadership team. They've really got to be able to operate as a unit. And so I don't know that there's any one size fits all. I think that the chemistry there is super important. And then some of the other characteristics.

It sounds like track record is pretty important. It doesn't sound like you're the one to just take a bet on someone that may have not done it before.

Definitely track record is a big part of it. These are people who are oftentimes late, I don't want to say late in their career, but they're not early in their career. They've been there, they've done it. And so I think oftentimes when you get to that point in your career, you know where your strengths and weaknesses are, where your sweet spot is. And I think hopefully people are self aware enough to be able to to know and put themselves in a situation where they can make the most of their own personal strengths.

Thinking about building out the sales function, the broader go to market, what are the key roles that you need to develop? How do you look at that between key roles within sales versus the full.

Go to market within sales? Specifically we have to look at how complex is the sales motion. Again, back to some of what we talked about earlier. Are we looking for, is there a pre sales function? Is there a technical function, Is there a security function? Is there a variety of sort of specialized skills that oftentimes need to be involved? For example, what we do, we have sales people who are targeting specific industries, but we also have solution engineers that are supporting them and provide technical expertise on the product. But we also have customer value managers who begin to get involved during the sales cycle in anticipation of them becoming a customer. Because our goal is to create a value based proposal that we can then use as the model for the implementation plan that we can use as then the model that we use for ongoing communication with the customer. So for me, and I'll just maybe offer a little personal note here is that as a seller, the thing that was always most rewarding for me was when I saw the customers actually realizing the value, seeing them implement the solution, seeing them achieve the business results that can happen six months, eight months, nine months, a year after they actually implement the solution. You've got the celebration of the signature, but then you've got implementation and the adoption and the value realization. And that's the moment in time when we can shake hands and we can say, hey, do you remember why we did business? Can you remember? Do you Remember why we decided to enter into this relationship and to be able to say that we've fulfilled some of those goals and objectives and that there's a desire for the relationship to continue and potentially expand. So you have to have an idea of what that journey is to make sure that you understand who the players are. But I'll also say that in the early days that it's pretty common for organizations to bring in again, from, purely from a sales perspective, to bring in. They're sometimes called rainmaker. They're the people who don't need a lot of structure, but they come from the industry, they're well connected, they know the business. They're people who are used to coming into sort of high change environments. And so in the early days when you're just starting out, you can bring in rainmakers, early stage people who can produce on their own because they're really well connected, they're going to learn your product. But that's not a scalable model. That's a good model for getting started. Once you're really ready to really build out a sales organization, that's when you really need to think about structure, Having more clearly defined roles and responsibilities and building a sales playbook. That's where I come in. That's really where I've spent a good amount of time and have a good amount of expertise is in. Once you're ready to really scale the sales organization, what's your sales playbook and how do we operationalize this so that we can really execute? We don't have to bring in rainmakers, we can bring in really talented people, but we want everybody to operate consistently. And because when we operate consistently, we can scale consistently, we can forecast, we can predictably grow the business.

When do you start thinking about doing that?

I'll just tell you from my own personal experience. Typically there's a funding component to it. It's okay, we've proven this thing out. We know we've got a real product, we've got some customers. We think that it's time when you're ready to take those funds and really scale the business. Oftentimes that's where at least a percentage of the funds can go is into really building out and investing and building out the sales organization. But I think it typically happens after you've really validated the solution. You've got a viable product, there's clearly market demand for the product, you've had some successful implementations, you've got some referenceable customers, you feel like you've got some of the basic pieces in place and then it's okay, are we ready to scale?

So it sounds like you do it pretty early. You would do that before getting rainmakers or as an alternative to getting the rainmakers in?

Yeah, potentially.

It depends. Some more variables there. When we think about building the go to market, I think going back to the broader view on key roles, is that different when we think about taking that more of a process oriented approach, is it, hey, are we really emphasizing some of the marketing demand gen initially and then doing this like how do you think that through in the order of those key roles?

I think they happen together. As the marketing matures and becomes more targeted and more intelligent and the messaging improves, you begin to scale that. A lot of organizations have the business development function as that sort of that thing that sits in between sales and marketing, but not every organization. There's even been some discussion about whether or not in some business models where that's interrupting the customer journey and that if you just had salespeople reach all the way back into that pipeline generation mode that there would be more of continuity of the experience. So I think that's up for debate. But I, in my own personal experience, I think that business development function has been, has served a valuable, very scalable, very efficient step in the process. And then from the sales perspective, one of the mistakes that people make is that they as they begin to scale, they sometimes try to cover too much or they try to address too many markets or too many industries. And I think maintaining a high level of focus early is really important. It's easy to get diluted that can hurt your marketing efforts because now you're trying to be all things to all people. We didn't flip the switch to really moving towards an industry focus in the US until we got to about 100 sales reps. Up until that point we were still very account list based and we were really focusing more on horizontal use cases. So thinking about use cases that were the use cases that every business has, order to cash procurement, these are business processes that every organization has. But now that we're at the point of scale where we can begin to focus on those specific kinds of tasks and how they're happening within oil and gas and within financial services and within CPG and retail.

So that's a little different. You get the expertise in area but then you start specializing it as you're growing.

That's right.

Versus specializing in one. You wouldn't want to do that. How would you determine that? Whether you just start out by focusing on a specific industry and going into the next one, one by one.

Yeah, I think it really depends on the product for us. It's almost a double edged sword for us because we have the good fortune of really being able to provide a solution for almost any type of business as long as it's large and complex and has multiple technology systems that are trying to run complex processes. That's the environment that we thrive in, but that exists across every industry. It made sense for us to really just start out by focusing on horizontal use cases, the kinds of use cases that apply to many businesses. It depends on the business. I think there are many solutions out there. When I was in the social media business, we did a lot in entertainment and communications companies and retailers. Right. Like that was just the orientation of companies that were looking to use modern channels, social media channels to reach and understand their audiences.

How do you keep people motivated and accountable?

So motivation hugely important. I think there are a couple of layers to the question. I think on one hand you have to think about, I think about the acquiring or the acquired as a leader with the acquired company. Right? You've got to provide your people with a clear vision of why this is happening and where we're going and why one plus one equals three as the acquiring company. The motivation comes from helping people to understand that there's a cultural fit, that this is a good thing, that we're going to be better together. Having a really well orchestrated communication plan I think is super important when it comes to motivation. The conventional thinking, which is the carrot and the stick and that works, that can work for a little while, it's motivations and penalties. But that is not a long term strategy. There's a guy by the name of Daniel Pink, is an author, you can look him up on YouTube, he's got some great videos, he's fantastic. He did a lot of research on motivation and he basically identified three key areas, essential ingredients to motivation. And one of them was vision. That everybody needs to have a clear and shared vision of where are we going, why am I here, why am I coming to work every day? Is there something, am I a part of something? That's a critical piece of it. And I think that's where the executive communication comes from. So it's that vision piece. Also another piece that he identified was autonomy. Very interesting. Autonomy is something that people thrive, they crave having the ability to make some of their own decisions. Like we know the destination, we know what we're trying to get to. But you need to let me decide and figure out what's the best way to get there. And so I think, I think that autonomy is an important part of it. And then third piece, mastery. So the idea is that people want to do what they're good at. Help people provide ongoing training, but help people to get good at what they're doing and what they want to do. And when you combine that with purpose and autonomy, you can really provide an environment where there really is sustained motivation.

Yeah, I like that. Framework, vision, autonomy, mastery.

Exactly.

In our situation of going from a single solution to having a portfolio of offerings, how do you approach that? Especially to think of shifting that go.

To market, single product to portfolio. I think there's a couple of things to consider here. One is that the best place to sell is to a happy customer. One of the things that you should look at, and maybe I'm stating the obvious here, you have existing clients or past clients. That's the perfect place to go and say, hey, I'm excited to share with you that we have expanded our portfolio. As an existing or previous customer, we wanted to make you aware that we have some offerings that you know that may be of interest and value to you. So to me, I think going to the installed base is extremely valuable. When you look at the new offerings, you also have to decide if the objective is to sell these as a suite. Is this a suite of offerings that is being sold together or is this a series of individual solutions that can be sold individually? I think that's a consideration. You need to look at the competitive landscape. Who are the competitors? You may have different competitors for each of the solutions to identify what the marketing opportunity is. But also if they could be sold together, maybe that that can also represent some differentiation. When these are sold together, this combination of offerings is truly unique. That's one of the things that people need to think about is how are you different? What's your differentiation? What's the value of your differentiation and who values it? If you can work through that, then you can figure out how to productize your offerings. You may find that there are interesting combinations of pack that can be offered to specific targeted individuals. And then it's a question of positioning the differentiated value. So to me, those are just some kind of off the cuff thoughts on packaging and moving from a single product to a suite.

I like the idea of figuring out the value if it is a combination or if it's purely in a series. This other thing I've been questioning is pricing your solution. I think that's a big thing we struggle with because we sell into A variety of different corporations. There's some clear cases where organizations are running a billion plus dollars of M&A through a year or two and they're managing it and they're getting a lot of efficiency gains. I'm curious around that you think through building a business case based on the value delivering or is it a lot of these tools based on how much data consumption or some variable there that's purely associated with usage.

That is an interesting challenge. I will say that there are many organizations that talk about value pricing. There are very few that do it. It's one of those things that you know, and I'll just tell you just a quick anecdote here, is that we actually can offer value PR because the metrics that we address are so clear cut. It's easy for us to clearly identify a business performance metric, a KPI that we can say if we can successfully move this metric from here to here, then you're going to agree to pay us a baseline fee. But if we achieve this business performance metric, then you're going to pay us an accelerator. And there are some customers who like that idea and there are others who are like, ah, you know what, we love that you're offering that because it means that you believe in your product. But we want to just go with the simple pricing model. And that's sometimes that's the response we get because I think some people feel like it's more to manage, but pricing is not necessarily my area of expertise. But I will say we've explored a number of different pricing alternatives. When we're implementing a solution that has to do with procurement, we can create a pricing option that's based on the number of invoices that are processed, for example. Generally what we hear from customers is that they want something simple, they want simple flat rate. All you can eat pricing. I don't know if you guys do pilots, but I think paid pilots is obviously a good way to validate and the technology. But then beyond that, I think ultimately customers prefer to have a fixed fee flat rate. But you can certainly look at the variable components. For us it's the number of transactions. It's also computing power. So we have computing power, we have transaction specific related pricing components and then we also offer flat rates. Quite frankly, I think we're still trying to figure out what the optimal pricing model is. It's a little bit of trial and error.

It's interesting because it sounds like the clearer you can connect the pricing model to value, then you can start driving towards value based pricing. But when it gets more ambiguous, then that's where you got to focus on keeping things just simple as possible.

I think that's right.

Going to the go to market around the portfolio. When our company grows, or even another company, you get to the point where you want to increase your capabilities and you buy something. And there's a couple of situations. You may just buy a product and saying, hey, we're going to incorporate this into our go to market, but you may have a product and a sales team and then figuring out how you're going to bring the two together. Have you dealt with any of those situations?

A little bit. I've certainly seen them, I've observed them, and I've been directly involved. There are a number of considerations because when you acquire, there's the question of, okay, is the technology additive to what we're doing? We're purchasing something that's going to be incremental to our current portfolio, which means that we need the original, the acquired salespeople to either be overlays. Right? That's one option, is that they can be sort of overlays to our existing sales team because now we've got this new specialized offering, or they can get assimilated into the sales organization, in which case they have to learn the acquiring company's products and the original sales reps have to learn the new products. So you've got that to deal with. So I think you really need to be clear on what your strategy is. What is your product strategy? Is it additive? Just very quickly, I'll tell you what I saw. A little anecdote of what I saw when I was with Sprinklr was very interesting and I think very impressive. They were acquiring companies, not necessarily for the tech, but they were acquiring companies for the talent and they were bringing the talent in and they were essentially recreating, rebuilding that enhanced functionality in the core product. And it took time. There were times when it took them an entire year of additional development work before that functionality was in the base product. But the reason they did that was because in technology, if you just acquire another company, it's bolted onto yours. You can say that you have the functionality, but it's not really integrated. It's integrated, but it's not natively embedded in the core product. It doesn't really work with everything else seamlessly and it becomes difficult to manage and maintain. And we see, I still see this today. We have competitors. We're creating. Celonis is actually creating a new market space and we're seeing competitors going out and purchasing the pieces of technology that they don't have so that they can say they can do what we do, but the reality is that they can't. They would have to go back to the drawing board and rebuild that code in the core product for it to be to have the same level of robustness. I think that it was impressive to see the commitment that Sprinklr had made to the quality of the product that they were developing in the core. They were acquiring the know how but they were building out very robust core product. And I think that made the product much more scalable. And at the end of the day it delivered a better offering to the end customers. But that also took a larger investment and the return on. The return on the investment took longer. There was, there were probably sometimes 6, 8, 10, 12 months before we really saw the benefits of the acquisition. So those are hard decisions.

Did it come with the sales team? What do you do with them in that situation?

Yeah, in those cases. Typically what we did in that case was that the sales team came over as initially as overlays, as specialists. There were times when they continued to sell the standalone products separately.

I got it.

And then eventually those customers were ported to the new platform when it became integrated with Mothership, so to speak. So you basically had a team that continued to sell to their legacy customers while we actually developed new product. And then once the new product was ready, those sales reps came over as either specialists or they became full blown.

Reps. Wow, that's interesting. Yeah, it's like very different way of thinking it through to get the technologies where it needs to be, then move the team to where they need to be.

Yeah.

Any other considerations when scaling go to market?

Just thinking about sort of those people coming over reps that are coming over into the new organization. It's not always the sales, but it's obviously the supporting people. For me, successful transition into the company, number one is the manager connection. The most common reason why people leave is because of the manager. And so the manager acquiring company, the leader of that team or that group being able to connect with those individuals that are joining. I think that's critical. So that's number one. 1A is for people to be really clear on what it is that they're responsible for their job. What are they responsible for? 1b for me is connectivity. It's like people coming into a new organization. People are so connected today. They are so reliant and dependent on their communication systems connectivity. If you don't get it right, if you don't help those people to get connected into their new environment. That can be very detrimental. And then I think obviously just helping them to get connected. Social colleagues, buddy programs. There's a variety of things that we've done to help people that are coming into the organization feel like they're a part of the team and a part of the family. Anything that you can do in that.

Regard, those are good tips to get people on the same page here. The customer focus. How do you stay customer focused?

For us it's cultural. It's a core value for us. Our number one company value is we live for customer value. There's a self serving reason for that. It's because we know that when customers are successful with our product that we have lots of opportunity to expand the relationship. And so there's a real vested interest for us and for the customer in their success. That's a cultural aspect, but there's also a real business driver there. Organizationally you got to make sure that you have the resources to be able to provide the level of support that they need. We've recently made significant investments in really helping to enhance what we call our cbg, the customer value group. And within the customer value group you have customer value managers who are like your success managers and then also more technical resources that are available that can be contracted for either professional services or customer value architects that are there to be able to basically help drive adoption and to help get the value out of the solution. I think management commitment, culture, management commitment. Another big part of it is communication from leadership. One of the things has, I think been inspiring for our company, for our people, has been to actually hear from customers. Customers attend our world tour event, they're on stage. And so as an employee to be able to see our customers talking about how they're using our product and the success they're having and how it's helping their company is very motivating and inspiring and obviously something that we want to help perpetuate.

I like that example of really bringing the stories of the customer front and center to the company. Anything else tactical that you would do to keep that emphasis about the customer, making that part of the culture, just.

Making it top of mind for everybody. But certainly I think there are things that you can do tactically. Logos I think is a great idea. We've done contests for customer success stories. So we've had customer value managers that are responsible for trying to collect kind of customer success metrics. And so we've done some sort of fun competitions. It also takes focus on Our part, customer success isn't something that necessarily is automatic. It's not something that customers volunteer. They raise their hand and they say, hey, Kisan, I just wanted to call you and tell you how much we love your product and I want to share with you some amazing metrics and business improvements that we achieved as a result of doing business with you. That doesn't happen very often. It takes a concerted effort where we need to go in and ask customers forget what it was like before they had your product. It doesn't take them long to forget because now they're living in this new world and they're doing this new thing and they've got this new process and sometimes they lose sight of all of the benefits that they're achieving. And so I think it really helps to have somebody that's there to help. We call it mining for metrics. So let's get in there and ask because once you do that, once you develop these success stories for the customer, now you're giving them content that they can use internally. I'm a little bit off topic here.

From your question, I think it's pretty relevant. It's like encouraging them to get those customer stories and then being able to circulate them around the company.

That's right. They're good for the customer because now they can justify the investment that they've made and the people that are running the project can stand up and say, hey, we're doing good work here. And the executives that sponsored it can say, hey, we made a good investment here. This is a good thing. And then you as the provider have something that you can add to your customer success library.

Where do you use that? Like those testimonies, things like that we.

Have written into our contracts and customers have the ability to strike it, but we ask them for their approval, allow us to use their logo, and if we generate a case study, typically we'll ask the customer to agree to participate in a case study or allow us to document a customer success metric. And so we will use those in our sales campaign.

What are examples? I feel like that's a challenge for us is thinking of customer success metrics, especially on the software side. How do you conclude that this is going to make you whatever X percentage efficient, faster? It's hard, it's really ambiguous. We're unfortunately not like in your spot where it's so crystal clear on the value.

So I'll go back to my mining for metrics because mining takes a little bit of work, right? You got to swing the pickaxe and dig it out. If you can encourage your people to do that. Sometimes it can be anecdotal, it can be a story, and it should be a story if you're working with a cooperative customer and you're working with somebody that is motivated to work with you. And we mentioned the concept of champions. I think it's extremely important for you to not only have champions to win the business, but you need champions to keep the business. And one of the ways that you keep the business is by being able to dig out those success stories.

I think you got a good point. There just not going to be gleaming at you on the surface. You're going to have to dig in and ask those questions.

This is a very common mistake to make, is that you think that just because the person that helped you to win the business is going to be the same person that's going to help you to expand the business. And that's not necessarily the case today. People are changing jobs, there's mobility there. So we see it time and time again where the person or people that really helped us to win the business, we're now dealing with new people. We basically have to develop them, almost start over in terms of the process of. Of developing them into champions, into people who want this to succeed, especially in SaaS software as a service that the process of identifying, developing, testing and leveraging champions never ends. It never ends.

There's a really great view on that. Zig, I gotta ask, what's the craziest thing you've seen in M and a.

Craziest thing I've seen in M and A? I have to tell you that I don't know that I've ever seen anything crazy, but I did allude to this earlier. I just thought I was really amazed at this particular company that actually went through and did about five or six acquisitions over the course of about two years. And every single one of those acquisitions was about enhancing the functionality of the core product. And so to see that happen and then to see that product emerge into becoming the world's leading, in this case, social media management platform was awesome to see. And the people that came in from these very innovative companies were just amazing people. They were people who were visionary in their space and now they were part of a bigger vision. I continue to be very bullish on the company. Full disclosure, I have all my shares from sprinklr, but nevertheless, that was very exciting to see and I wish them continued success and hats off to them for really their commitment that they had to really putting all of the effort into making the product great.

Sounds like I'm going to have to have a chat with their corporate dev team over there. Did some lessons learned. That's the dream. And it doesn't always get executed right.

That's right.

Hey Dick, thank you so much for taking the time and giving us a nice blended interview of advice for growing our current business, but also thinking forward and how we could integrate some future acquisitions.

My pleasure. I hope that maybe this slightly fresh perspective on things offered you maybe a little bit of a unique perspective.

Hey, thanks Dick. And here's to the deal. 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.