Leadership Alignment and GTM Strategy for Successful Deals

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I'm Kisam 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.

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Founder of M and A Science.

Joining me today is Cole Breidenbach, EP M&A integration and strategic initiatives at Okta.

Okta provides cloud software that helps companies.

Manage secure user authentication trading on NASDAQ under Okta. Today we're going to talk about successful deals using leadership alignment and go to market strategy. How's it going Cole?

It's going great. Thanks for having me. Kisan.

My pleasure to have the conversation. Can we kick things off with a little bit about your background?

Cole Brydenbach thanks for the intro. Kisan, VP of M& A Integration and Strategic Programs and Initiatives at Okta. Working for our Corporate ed organization BID at Okta for about almost going on eight years now. It's been a fantastic ride. Prior to that I was did a little bit of corporate consulting with Accenture, so.

So you did corporate consulting with Accenture, joined Okta but not like a die hard finance M and A management consulting background?

No, I'm a bit of a generalist, bit of a smattering of everything as you do at one of the GSI's like in Accenture. Some portfolio rationalization, some low cost location resourcing projects as well as some large SI deployments, some enterprise tech Companies and then have a little bit of a nonlinear non traditional journey. At Okta I joined that actually as part of the. I think I was customer success manager CSN number three that was hired almost eight years ago. I kind of joined for the market opportunity, the company, the leadership team and the problems they were trying to solve. I saw a little bit ahead of the curve on what Okta was trying to do in a nascent market, but really taking identity to the cloud and then came in as CSM number three, helped our chief customer officer at the time, put the rails around what does customer success as an organization look like over the next three or five years. But also then they wanted somebody with enterprise account management experience. And so I came in to help Okta as we moved up into Fortune 500, managed some of those very large customers and then took a different role. Our CRO chief revenue officer at the time tapping to then go build and stand up our business value consulting team, our business value engineering team. Many organizations or tech organizations have those teams built that from the ground up people process systems. And by the time I left that behind it to take on this role it was a global team of about 12 folks. And then yeah came on board as Okta pivoted to become a bit of a more acquisitive company. We had some experience with acquisitions in the past, but we really needed to build the capabilities around integration because I think we got a lot of the steps in integration wrong. So really just came on to build out again similar build the capabilities cross functionally at the company ready us to become a better executor at M and A integration and realize the value that we went on to achieve with some of these companies.

I appreciate the background. I think it'll come up later. I'm getting you're the regular Joe running around the company that got sucked into M and A and ended up taking a lot of rain in what you build today for your M and A integration capability.

Yep, a lot of different hats, non traditional journey but it's been a great ride at OCUL and then eight years.

What was the headcount when you first started compared to now?

I think it was close to about 300 and now we're. I think it's almost 5,600 above 5,000 for sure.

That's some cool growth to be part of.

It's been pretty special to be a part of from pre IPO to now post IPO scaling to a billion dollars in revenue and now going towards the next 3, 4 years of heading towards 4 billion in revenue. It's been exciting.

Does it just keep getting easier and easier?

Completely. Nothing breaks. Everything goes the way it's supposed to, right? No, it's pretty exciting.

What does leadership alignment mean to you?

Leadership alignment to me just means making sure that the folks from both CEOs on down are all aligned on in the context of M and A, why we're doing the acquisition, what it generally means, what we're trying to achieve and then really what's our product strategy, what's our go to market strategy, what's our people strategy and how are we going to talk about this more broadly to the rest of the company? It starts at the top with both CEOs when you're starting to consummate the deal, when you start to get into a term sheet and you can't start planning soon enough for some of those things and start defining some of those things and getting both leadership teams, depending on the type of deal, who's going to come with the deal and who's not getting both leadership teams aligned on that messaging, aligned on the strategy and then how we're actually going to go execute on that. Because it's really critical because it really the message, the communications, those pieces of it, the change management component really then tends to need to trickle down from those leaders and every everybody needs to be speaking from the same playbill as it were.

I got why are we doing the deal? Product go to market, people, communication, getting alignment on these areas. It sounds easy, right? And at the end of the day I talk to a lot of folks in your shoes and it's always hey, this vision alignment got lost during the deal and maybe you can give me more of that specific and how do you actually do it? How do you really define why we're doing the deal in a way that it sticks so it's not just enough to get the deal closed. Or maybe there's something else I'm missing where it gets lost in going over the bridge to the integration world, which.

Can happen as well. I think the most important part is it's really easy and obviously to get excited about the strategic vision, what you can go achieve when you especially when you do a large scale business acquisition as you're bringing these two companies together depending on the deal type, let's say it's a growth market acceleration type deal. It's very easy to get very excited about that and only want to talk about the potential for the two, two companies coming together and what you could go achieve. That's great. The Rah rah stuff is fantastic. It gets people excited, gets people aligned on what the vision is. But very quickly what people want to understand is the nuances, the pieces around. Okay, how are we actually going to operationalize this? What does integration look like? What does success look like? That's oftentimes. Why? When you're in due diligence and you're going through the process of asking the questions, understanding what the risks are, as you're looking to consummate the deal very quickly, those diligence meetings, the conversation shifts to integration and how you're going to actually integrate those things. Leadership alignment. And as quickly as you can, start thinking and formulating plans on how you plan to lay out integration, what those key milestones are, having very key messages on what you plan to do with the product, how you plan to go to market with it, who's going to be selling it, who are you going to be selling it to, how much are you going to be selling it to for all of those kind of details and by what units of measurement and then what are you going to be doing with the people and what does the organizational strategy look like? I think the really interesting thing is that's a lot to get figured out very quickly. And so even if you don't have those things figured out right off the bat, being transparent about that I think is really critical. So meeting people where they are, understanding that all of your employees are going to be going through a lot of change as a result of the integration, and even if you can give the high level bullets of what you're trying to achieve, here's what we think we're going to go do and the decisions we've made. Also being transparent about what we haven't decided, what decisions we're still thinking through and stuff we need time to decide, I think is fair too. But as long as you have a regular cadence, rolling communications around that and preparing people for change and meeting them where they are, I think that's a critical piece to getting any integration right.

There's a lot of this stuff that builds up over time. When you have the time to talk to the people, get the information and have the conversations around this. What about to the point where you get to loi? We're presenting something definitive here to get a deal done. How fleshed out should you be with these things that you talk through? Because then this is where it gets really foggy and inconsistent, especially around some of those go to market details which could range of, oh yeah, you cross sell our stuff, we'll cross sell your stuff into some a really detailed plan on how this is going to come.

Together to the extent you can. It's why being involved I think getting the integration folks involved in a deal very early is critical so that the infrastructure around the planning, getting the integration team, the functional leads all together and starting to spin up those conversations very early is very important. So to the extent you can get some of those decisions outlined beforehand, I think one thing at Okta and I know that other companies, they do very well is document. And having built, you can have all the playbooks in the world, but at least having kind of Those key top 20 decisions you need to make prior to actually consuming the deal and having clear answers to those and having whoever the deal sponsor is help you answer those things when you can actually then get the kickoff integration and get the integration team together. The more clarity you have around those things, the better you're going to be set up for success. Now there's going to be things obviously that you're going to find out along the way as more of those conversations evolve, as you start to actually go to market with certain things. But you just have to be agile in your approach to those things as well. But the more you can have a lot of those key questions answered, have all of the leaders aligned with the one page, here's what we're going to go do. The more effective and the more seamlessly things are going to occur throughout the integration because these things are extremely disruptive.

Plan for the change to come.

Change management's a big piece of it. Change management means a lot of different things to a lot of different people at a lot of different elevations in different contexts. So in the context of M and A, I often find that it's one of it can be. I don't want to understate this. One of the most areas of underinvestment that some companies make because they underestimate the amount of change and how much of a lift it's going to be to enact change elegantly for people. And the best you can do is try to build as much plans, try to communicate effectively, put enablement sessions together, hold ask me anything sessions or town halls to allow for live Q and A. Those are things we've done. But the reality is a lot of these teams and people are going to go through a monumental amount of change to the extent you can. Building teams and infrastructure and organizing a change management function around that is something that we've seen a lot of success around in our experience.

There's so many interview topics we could expand on from the last few things you mentioned. Going back to leadership alignment. What happens when there is no alignment in leadership?

From what we've seen, from my experience, you see a few things. One of the first ones is confusion around what you are versus what you aren't. Integrating that then leads to, I'd say, inconsistent messaging. Internally. There isn't a consistent narrative that all of the leaders are aligned around and they have people asking them who are unsure because there's a lot of uneasiness and people aren't sure what's going to happen unless you're clearly communicating to them and unless you arm your leaders with that clear, consistent message that everybody is rallying around. People go off of their own device, people create their own narrative because that's what people do. To the extent you can try to control that and then allow people to ask questions about that narrative and to dig into it more even again, the back of the things that you haven't decided or you don't know yet, that's okay. But then just have that rolling comms or change plan ahead of being able to go back and address those things and bring people along for the journey. Don't just give some announcement and allow them to go create a narrative. And if you don't have the leaders backing up and regularly reinforcing that message, there's an inconsistent narrative from what one functional leader may be telling their team versus what another functional leader is telling their team and then just creates mass confusion, unease which then leads to some of the people, issues, attention issues, things downstream that end up happening. They might not happen immediately, but it may happen six, nine months later.

This is good stuff. This is the real meat right here, the narrative. Being able to reinforce that message because it goes back to like integration's easier said than done. So being able to do that and then be able to change your plans as you need to. I want to hear more about this because I know you're speaking from experience. I don't want to put you in a spot where you got to give me an example or put others names out there. But just yeah, you have more that of these kind of things that happen and I feel like these are the interesting lessons learned to help prompt other practitioners to learn make sure that doesn't happen.

Yeah, I'm happy to get into it a bit. At Okta we did a recent acquisition, probably about almost a little bit more than a year back of off zero, kind of a developer focused identity and access management company. So While Okta was very much a top down selling to CIO systems and an enterprise kind of motion. Auths here was very bottoms up sold to the developer because the developer was always the end customer and the user at the end of the day. So regardless of who the executive buyer was. But this was specific to the SIAM market. So customer identity and access management, it was an area where OP0 was very, a bit of a nascent market. So the impetus, or I guess the strategic rationale behind the deal was it was a growth play. It was a growth acceleration play that had a product in market already where we had some feature overlap. So we have a product in market, we're now buying a company that has a product in market approaching similar problems. That's challenging in and of itself once you do that. So not only was it Okta's first scale business deal, it was a product that was somewhat similar to one we already had in market, but we were approaching similar problems from different ways for different types of buyers and users. It was very interesting in that post close when we were able to look at some of the data and look at some of the things that came out of the clean room. We actually only saw that there was about, I'd say less than 2% customer overlap. And in the cases where we were actually within some of the same customers, there were different BU's in those customers using us for different reasons. So if a company was very developer heavy or they had large developer teams, they often had authentic zero. They had a company that was more admin heavy where they wanted a very robust ui, ux, et cetera, that was enterprise ready, that went with Okta or they didn't have as much but that obviously you sacrifice different value levers depending on which solution you choose. One of the things that we did was in the event of change management, there are a bunch of things I think we could have improved. Getting better on some of those common right at the outset, making sure we were crystal clear on our messaging. But I think one of the things we did a really good job of throughout the integration was to go back to some of the things like bringing people along for the journey was we needed to get both CEOs together in regular monthly town halls to talk about what the integration plan was, to talk about the decisions we had made, to talk about what was and wasn't changing, and then to talk about and be transparent about the things that weren't changing and then allow for open discussion, allow for live Q and a to both CEOs to answer questions. And that would then inform some of the things that we would follow up on during the next town hall. And oftentimes it wasn't just the CEO CEOs it was both CEOs plus some of the functional leaders who may be impacted by a lot of change. Let's say as an example, if we were bringing both finance orgs together and that was a new change that we were announcing, we would allow both CFOs to come in and answer questions from employees about what that meant, what next steps were, what did that mean to those people? Because the immediate thing that people naturally see start gravitating to who's my boss going to be, how does this impact me personally? All of those personal questions, that's a natural reaction for anyone. Those are some of the things we didn't do right away, but we course corrected very quickly post close and started having those kind of regular, I'd call them, change town halls and touch points to give people updates on integration.

I like how we're getting into a retrospective. What's interesting about this deal is on the outside it's close to the core, but different user bases completely, which that the whole go to market thing to figure out. But yeah, what went well and what do you think you could have done better?

As with any deal, I think we could have gotten the comms in the initial messaging for both sets of employees, at least internally. I think we did a very good job externally announcing and articulating the vision, the strategy. I think that made sense. If you listen to some of the earnings calls and what the analysts were saying, it made sense to the street, it made sense to our investors, it made sense to the market. Customers obviously had a lot of questions around what's the platform for the future? Are you going to integrate them some point? What does that mean? And some of that stuff we're still figuring out is the reality as you look at kind of the platform product strategy. Longer term, but near term, the messaging was fairly clear. We're not deprecating either solution. We are investing in and building out both products and both roadmaps and we'll continue to support all of our customers with a continued commitment to your customer success on both platforms. So I think that really helped remove a lot of the noise from our customer base, our partner base and then the investors in the Street. I think where we could have done a bit better was being clear internally about what our plans were around integration, which is everything we were just talking about. And I don't think at the time we really knew what that looked like right off the bat. And so I think maybe taking a step back and really digging into kind of the comms strategy, even if we didn't have those things figured out and being a little bit more thoughtful about how we calm that out at the beginning would have taken some noise out of the machine because I think a lot of those town halls that I referred to were a result of because there was so much noise with the working teams. Nobody was really clear on what we were going to integrate. People, process systems. Right off the bat there was rumors there was different kind of leaders talking about different things. Just one high level message wasn't really going to help our employees or either set of employees understand what that meant. And so I think taking a step back and being a little bit more thoughtful about how we message that, then more recurring right up front meetings and sessions on communicating that change transparently I think would have been very helpful. And then back to the leadership alignment. I think we were fortunate at OKTA to have some phenomenal executive leaders on board who had a lot of experience in their past with mergers and acquisitions. Our president of field operations, Susan Saint Ledger. Our cio, Alvina Antar. We had a lot of executives who had a lot of experience with M and A. One thing I think they did very well was they went out and established their own functional partnerships with their counterparts. And even if it wasn't very clear what the all up integration strategy was going to be, yet they got their teams aligned on. Here's what we're thinking through as a function. Here are North Stars as a function and here are the open questions we have and things will have clarity on coming weeks. But again, I think the more we could have done more alignment of that up front instead of post close, I think that we would have just been better positioned to execute right out of the gate. Then that takes a lot of noise out of the machine because the longer you don't make some of those decisions, the longer you kick around while we're still thinking, thinking through it, you still need to move forward with the integration. You still need to maintain momentum. Because every day that you don't integrate, every day that you don't move that process of that machine forward, you risk losing deal value, you risk losing people. So the business outcomes, the people focused metrics, because people are at the center of any acquisition and making it successful, the longer it takes, the more anxiety grows across the entire process.

You want to hit the ground running, get as much as you can get done before you get that level of fatigue sinks in. When you said leadership alignment, are we talking about C suite bu functional leads like who are the key people there?

I think it's probably again both CEOs. Let's first facilitate helping both CEOs get aligned on the key questions that we need answered. Here's our thought process. Are we all aligned on these things? And then it's getting the C suite folks from both companies. Assuming it's a scaled business acquisition, it kind of changes. If it's a tech tuck and you're not really, if you're only bringing some of let's just say the R and D talent or something like that and you're maybe leaving the go to market talent or the rest of the company behind. But if it's a scale business acquisition, I would say that yes, it's the C suite and then they're probably directs to the VPs so that they can then filter down a lot of that messaging and everybody's speaking the same language and everybody's reading off the same page. Here's what we're doing. It's been these are decisions we've made. This is going to be the product strategy and if we don't have that full product strategy, we're going to be figuring that out over this time horizon. Come back, we'll give everybody visibility to that. Here's the near term go to market strategy, here what we're thinking on the other milestones and then here's the people strategy and here are the groups and here's how we're going to design the organization to facilitate achieving our business outcome. And here's how we're going to structure ourselves and what that means and who's going to lead what. And then the timeline, I think fondly back to this really bad slide that we created that had a visual of a road or like a highway with a car going down it. That had literal milestones that we showed the company. It was like here's what you can expect by this date, here's what's happening on this date. And it was like trying to bring them along for the journey really. That slight, horrible illustration on it with this little red car. But it helped people feel like they were part of the journey. They could ask questions along the way and they felt like they weren't just the passenger on the overall journey.

You shared that timeline broadly.

After a while we had to. I think we thought that was the best thing to do internally. Specifics weren't shared externally. Obviously there are a lot of Kind of sensitive items in there. But in general, yeah, we tried to be as transparent as possible with people as we were getting them along, because I think we got a lot of feedback early via surveys and other executives that I think we talked to that we needed to bring more to people, they needed to know more. Because like I said, everybody gets excited about the rah rah, the strategy. Here's what we can go achieve. Everybody was on board with that. But the next thing everybody naturally pivots to is, okay, what about all the how are we launching? How are we operationalizing? How is it actually going to happen? In the panic? There's a lot of details in there that are gna and operational in nature, but people care about that stuff. They care about how are they getting paid. When are you bringing together payroll systems? Who am I getting paid by? All of those, really? Who's going to be my manager? What does that look like? They're very tactical things, but it's important that they're addressed by leadership so that leadership recognizes that those nuances, those details, they're all very important to people. And so making sure you maintain humanity throughout that kind of change journey, I think is really important.

It goes beyond just leadership alignment. It's this level of accountability and ownership that they have. Because if you don't talk about these things, then you don't have that accountability and ownership.

Our leaders did a very good job of making sure both CEOs understood was this is why we need to go have these sessions with the whole company. Because if we didn't, in my opinion, we would have continued having so much churn because people weren't hearing directly from leadership on what was going to be happening. And then frankly, what we just didn't know yet, because this stuff's hard. M and A integration is really hard and thankless too. Yeah, oftentimes it can be. In general, I think those things take a lot of the ambiguity out of it. You provide clarity on what you're going to go do. And it's not always painless. A lot of times there can be pain associated with the decisions you're making. There's going to be need to be change and planning put around some of those announcements. But at the end of the day, we were fortunate enough to have two phenomenal companies. And it's really a testament to the caliber of people on both sides and firm leadership on down who even in the face of all that ambiguity for the first few months, were able to band together and say, look, we don't have all the answers yet but we're still going to move the bus forward in the areas that we know we have integration plans for and the rest of this stuff it'll come and we're going to get there in the coming weeks and months. But back to my original point, I think maintaining momentum, keeping things moving is really critical. And that was a piece that, that I was very focused on. This deal we did with loss here specifically.

Yeah, this is an easy deal because this headcount between the both companies was about the same.

Not about the same. I think we had about 4,000 at the time, but we added a thousand thousand.

Okay. It's pretty significant.

Yeah. Bringing on two hyper growth companies. One company was public, one company was private. So there's compliance standards, there's nuances there that you have to be aware of. Operational efficiencies and operation details you have to work through and challenges. So yeah, challenging integration.

I had a business case against six and a half billion dollars. So that's why it makes interesting to reflect back and get some of the the learnings, the lessons learned of the retrospective view. You talked about communications, how hey, it sounds like a lot of the external communications went well. Opportunities to improve internal communication. We touched on some of the general themes around alignment. Anything else that sticks out that went really well and things that didn't go as well because this is like as hard as it gets for integration. That's why it's interesting. It's not oh, you did an acqui hire of a dozen engineers and called a day.

There were obviously challenges with go to market. What was the model going to look like near term and how are we going to co sell together in the field? Because think about it, we were competitors. How do you make it a collaborative environment versus a continued competitive environment when you acquired a product where we would sell against each other. But we were also in different types of deals but we still did obviously bump into each other occasionally. And so how do you make it a collaborative environment in the field and give our field enough guidance so you still look good and speak intelligently and understand how you're going to operate in the field in front of customers? I think we did a good job at that. I think there's always room for improvement there. That was a big challenge. I've been a part of good amount of acquisitions now. One of the things when we finally closed the deal one thing that we had done was we had communication mediums were different between the two companies. Okta was heavy email, Austero was heavy slack. That was what they used as a primary form of communication. One of the things we did to bridge the gap, even right as we closed, was we built Slack connect between the two Slack instances because we had Slack and Okta as well. And it was funny because when we closed the deal, the day we closed the deal, there was an all Okta and Austrio Slack channel that was stood up and you wouldn't believe that. There were pictures, photos, there were people welcoming each other. There were photos of the Australian sales teams already getting together for dinners and meeting each other, starting to kick off the account planning process. It was kind of goodwill like I've never seen in a deal before. So the excitement, the coming together, the collaboration was again back to my comment before about the caliber of the teams, the caliber of people on both sides who are coming together. I think it was a testament to that. I think we did a very good job there. Clarity on some of the tech integration I think could have been better. I think we didn't fully understand what the Org was going to look like, what we were and weren't going to integrate. I think it was pretty self explanatory. We were going to have to integrate front back office systems and all of that stuff. But at the outset that wasn't very clear. Having a more clear roadmap or POV on what that looked like as well as what the Auth0 product unit looked like would have been good. And this goes back to having your integration plan set beforehand. Even if we didn't know fully that it was going to be a product unit yet, being clear about what that was, what that meant, and then what was going to be in versus what was going to be out of that I think would have been very helpful. It took us a while to get there. We eventually got there. I think we made the right business decisions over a pretty accelerated period of time.

I like how you talk about this too because you're really becoming the poster child of the next generation of M and A integrators. The fact that you're very transparent and reflect on lessons learned with that. I think just the culture of your company, it sounds interesting and the whole agility. Your team responded really quickly. They knew they got to get together, get to know each other, start thinking about what's next. How does that come in play when you're executing on integration? We talked a little briefly and mentioned agile earlier and it just sounds like there's so much of this that regardless of how much pre planning, it's going out the window as soon as this big surprise or information comes up and I could tell, you know what I mean? How do you think about it? Is that just purely the culture of the company? And that's what it is. They do integration in that format? Or is there some notes that some of the traditional pure waterfall driven agile, we call them, the classical practitioners out there could get some takeaways from you.

On establishing the North Stars at the beginning of the integration are critical to help drive integration. Even if you think things are going to change in certain areas, having those key things that everybody can anchor off of, for instance, we don't want to do anything that alienates our customers come first in any decision we make, making sure that people are at the forefront of our decision making, we're going to do right by people, right by employees, right by the company. There's just a few, I think, really key tenants, or I guess you can call it your mission statement for how you can then drive the integration and you can map everything back to those things and you can say, okay, we're approaching this decision, let's say, very tactically around a workday instance. Are we merging workday instances? Or if this company is in the midst of deploying their workday instance, should we stop that? Should we continue it? Should we integrate it? What does that look like? Even the very tactical decisions that are very important though and have financial implications depending on what you decide, being able to map those things back to those key tenants or North Stars, I think helps a lot. The other thing you mentioned is a bit of a sidetrack here. But the culture, I think, of both companies was definitely in both companies, a culture of owners and doers. That's just by nature the way both companies operate and very collaborative in nature. But I would say one thing that I talk to a lot of folks about, even if you put both kind of mission statements by both companies, write it down on paper, you write those things down figuratively on paper, they look like they're the same in practice, they're going to manifest themselves in very different ways. That's something I think that all M and A practitioners need to be aware of is the cultural component. So even if you line up both mission statements that look exactly the same here are key corporate pillars. These are the things that we prescribe to in practice. As you start integration, you're going to see very quickly where the mismatches are. And so I think those are always things to be aware of and things to try to get ahead of to the extent you can, because then as you start integrating, you start getting noise in specific areas where frankly you don't need to. If there's ways that you can get ahead of some of that if possible, I think it's just set you up for success later. And I think being honest with people about those things, people appreciate transparency and honesty from leadership on down.

The decision making part, and it's interesting because leadership styles and then it lends to the decision making approaches and it sounds like you built that here, some core values or what guides us on those decisions. Is that emphasized that because when you think about integration, it's change, it's a lot of decisions to make. Is that proactive to tee that up and saying, hey, this is going to be our framework for making decisions through this integration or is it just a here's a plan and let's execute against it?

There's certainly the, here's the plan, let's go execute against it. But I do think it was something we did really good and was something that I think benefited. When we went to make a lot of those key to high level decisions. We layered that framework over it and mapped it back to those key tenants. And it's like that impact analysis across your stakeholder groups a bit, which is how is this going to impact our customers, how is it going to impact our employees, how's it going to impact our partners, all those different stakeholders? And if you can put those, I know you can't put every decision under those lenses with that level of scrutiny and rigor, but if you can get the big ones and look at it through those lenses, I think it just sets you up. It spurs some really good, really good conversation between leaders. With a framework like that, it helps take some of the emotional energy out of it because you've all aligned on what the key tenants or stakeholders and those dimensions are. You can really use that as your frame or lens for your decision making. And so that tends to allow people to be a bit more objective and make decisions that are really beneficial for the overall business and those different stakeholder groups.

So emphasizing to think about the overall stakeholders, customers, employees, partners, and really thinking that through in the decisions. And that seems pretty straightforward.

Seems straightforward in practice.

Yeah. What are steps like 2 through 12 after that?

Yeah, exactly. And then I think it goes into, once you make some of those decisions, determining how you again, how you calm those things out and how you communicate those things internally, externally, how do you execute on that plan. Those decisions then flow down into the next level of detail for execution plans across the different different functions because they have different implications. The challenge is everybody always wants to know everything at every point in the deal. And some of the decisions made are fairly sensitive and have timing implications or have implications potentially in field about things that may impact your sellers, things that may impact your customer success managers, your renewals managers. So you have to be cognizant of timing and thinking through what's the right time, the right medium, the right audience, and being intentional about those plans. Again, the change management communications component of these things is critical and something that I see that often gets overlooked.

The business unit leader. How do you guys work together when this is all going down? You get along, get into fights.

What does that look like in a deal like this? It's good to build a very good rapport with that EU leader or whoever the deal sponsor is, and then also whoever the acquired leader is coming over. You're going to have some key leaders that I said at least an integration leader that you want to go build those relationships with right off the bat. One thing that I found that was very effective, it's not only just about the BU leaders, it's about the next level of people down who are really just about. Those people are the linchpins in the company. They're who? Everybody. This is the acquired company. They're the people who get things done. They're the culture carriers. They are the people who know the ins and outs of the company and they're the people who are trusted by leadership and they're in a corner. Identifying those people, really an ideal is critical and building relationships with those people.

Would those be functional leads?

They could be functional leads. They could be somebody like the chief of staff on the executive team. They could be somebody whose job it is to do communications. They could be specific, go to market line managers, sales managers, who just tend to have a lot of gravitas behind them that are highly respected. It's not easy to just go through a bullying kind of dossier or go through somebody's wiki and say, oh, it's that person aspiration. You gotta suss it out. But as you really go through integration, that's where you can set up those. I guess some of the consultants I've worked with in the past and call them kind of listening posts or feedback loops. You can start to identify those people and really as an integration team and leader, build relationships with those people because they'll end up helping you along the way.

I was thinking about the advice in general for achieving ideal leadership alignment.

It starts at the CEOs and it starts tough to get their time. But at least if you can elevate it to the level where they can make a few key decisions and then you can literally have a very tactical, almost leadership alignment slash change session. But prior to that, have their leaders filter down that message to the functional leads to their C suite first and then get everybody together in a session to say, here are North Stars, here's what we're doing. Product strategy, go to market strategy, etc. Have those to the extent you can, those things mapped out. Then get the leaders in a room to have that alignment session. That's how I think you do it. It's a change management play and it's going to be tough to get everybody to do something like that. But it's something if I could go back and do it again, I wish we would have done up front. Now, we ended up doing it eventually, but I think it would have been really beneficial to maybe push that agenda and that issue. If I could go back my personal, if it was something that I could have done to make the integration a little bit more seamless and less bumpy, something I think we could have been a bit more vocal and strong and pushing that. The need for that kind of session, the need for that kind of process. And it's something I think it's a learning that we had through this one that we'll do in the future.

Yeah, I actually like the emphasis on that. Do you have advice that you would give? Doesn't have to be your CEO. Doesn't have to be. Todd, you could, you could give it to me. At some point we're going to acquire the next little thing. What advice would you give to the CEO? And just general like doing M and A, not screwing it up.

A lot of it has to do with the relationship you build with the other CEO. I'll say selfishly as an integration kind of leader. Start thinking about the integration right off the bat. Start thinking about what this actually means. Again, a lot of it really goes back to you've got the high level strategy, we got that. It's very easy to say, oh yeah, the company will just execute it, we've got an integration team, we'll be great. But think about the integration, think about the details, appreciate the details and appreciate the need for people to understand the details, not just the strategy, not just the here's the market opportunity and everything else. I think a lot of it is having a very thoughtful and right off the bat view and conversation with the other leader about what and how integration, what does that look like? And then working with your corporate leaders, the imo, et cetera, to really bring that down and flow that throughout the rest of the organization and facilitate that messaging. That's a really critical piece of it.

You describe modern M and A right there, my friend.

Because if you don't have it again, noise in the machine churn, people don't understand. And it's very easy at a CEO. And I'm not talking about Todd, I'm just talking about just in general, any CEO elevation. It's very easy at the CEO level to not hear a lot of what's happening two clicks down. And so you get lost in this. That feedback might not be making it up to that level. So making sure that CEO does start hearing that feedback early and often is important. Both CEOs, then you can course correct and then you can have a fact based discussion on things you need to go do differently within the integration. Giving regular updates, having open dialogue with.

Both CEOs, that could be a big variable in how much communication they have throughout the deal. Because you could see one extreme of being hands off, especially you got some advisors and let them do all that back and forth versus the opposite, where we're going to become golf buddies and we're going to be hanging out and really talking about this stuff all the time.

And I think it was something that we were lucky enough to have, which would be two fantastic leaders who built a relationship over years. They've both written articles about it, they've both done interviews about it that are all public. And I think they had a. They built a relationship over many years. So I think we were lucky that as they came together there was so much excitement and you had two fantastic leaders who are very different but very effective in the way that they operate come together. So I think it's been a great experience.

From my perspective, we're not even. We're like barely halfway through our outline. I gotta bribe you to somehow come back and do the second half of this. I'm already thinking to let you beat me in a game of golf so I can get you back on the podcast.

We'll have to do it, set it up.

There's that. But. So I don't think we're getting a lot of the go to market stuff. One of the things that I wanted to touch on is your background. Essentially you came up through the business and ended up in an M and A integration role that whole piece. Because I feel like even early for a company to start thinking about Building out their integration function and really identifying who the best. We tend to default in the industry to go find someone that's done it, really hunt around like the consulting company to come do the first couple deals. I'm just curious how that from your view of your experience and you know your shit, man, you're really impressive for how you operate. So I wanted to hear where it came from.

I appreciate that. It's interesting. When I took this role, I had never done M and A integration before. I had participated in my days in Accenture on the outside of an acquisition, but I hadn't ever let an IMO before. And when I actually went and had a cup of coffee with my manager, my boss now, who's our EVP of corporate development, Monte Gray. I remember one of the things I asked him as I was exploring what's the next opportunity for me after this business value thing. He kind of laid out the framework for what he wanted to go build. And the corporate development function at OKTA is actually pretty unique. It's not just M and A, it's also got strategic partnerships and ISPs, it's got our venture arm underneath it. It's got corp strategy and it's got some of our tech strategy and partnerships team as well, as well as our deal, my counterpart who leads the kind of the deal team and then our integration team. And my team actually participates in kind of leading other major cross functional growth initiatives as well beyond just M and A. So things like new distribution models like msp, oem, new routes to marketing, global acceleration, we partner with the organization, drive that. A lot of the same set of considerations, a lot of the same structure, rigor, governance is required. So my team participates in helping launch and drive those. He laid all that out. And so what are you going to do with the M and A integration side? I pointed at the box and he's like, I don't have a leader for you yet, but I'm looking for one. I said, all right, well I could be interested in doing something like that. And one of the things he said to me, he's like, the way I think of it, you need somebody who's a self starter, an athlete, who can, a bit of a generalist, who can do a little bit of everything. That's kind of like the person you want to leading this thing. Because it's not just a program management role, it's a very unique role. You need somebody who can play across all of the different functions, who can be dangerous in each one, but who's not going to go extremely deep in one function because you're focused on the broader business outcomes for a deal and the integration. So you need to have that perspective play for the house. We have KPIs, we have deal value, things we need to go achieve. Let's all zoom out from focusing on this one legal issue. Let's see the broader vision here. So you need somebody like that, you need somebody who's versed in M and A. And then you need somebody ideally who's a known quantity of the company, who knows all of the different players, who's built relationships from the executive level all the way down to line, support people. And he said, to be honest with you, man, you could do number one and you can, you are number three. You just need to learn M and A and you can go do that. So that's what we did. And I think having gone through this experience, I think he was right in his approach. And I advised other corp dev leaders who talked to me about integration and standing up IMOs. It's really effective having somebody internally who can learn the M and A side of things and come up to speed with a deal team and then augment them with almost a consulting partner who can help build the infrastructure, who can help build the playbooks, the governance, the process, who can help do the road shows or the exec leaders to bring together the readiness team. But it really helps to have somebody internal because a consulting firm is not going to have that sway, is not going to have that brand. They're going to be looked at as a third party, they're not going to be as effective. Having somebody who wears the Okta badge, who's got the Okta brand, who's been there for a long time and can have those open, transparent conversations and really drive it, carry the standard, as it were, I think is critical. I'm obviously biased. I'm always willing to kind of campaign a bit on the side of look for that athlete, internally, look for that change agent, look for that person who has been in different roles across the business. You think about my background, pre sales go to market, post sales go to market and then going back into kind of a heavily operational end role in M and A integration, I think that's a really effective model for building leadership.

Operational chops and know the business. Paul, what's the craziest thing you've seen in M and A?

One of the craziest things that I saw was in a deal that we did a few years back, one of the benefits that the Company we acquired had was kombucha delivery. And I don't want to understate this or poke fun at it or anything like that. I'm not saying it like it was just I was in meetings talking about I was having to fight for bringing the kombucha delivery back. I shit you notice I was having conversations with our CFO about, you've got to bring the kombucha delivery back. People are sideways. It's only a group of 30 R&D people. We do not want this thing to go off the rails. Give me my kombucha delivery back. I was having to fight, and I walked out of a couple meetings going, never in my career did I thought I'd ever be arguing with a CFO openly about the need for. But it was something they were so upset about. It was just something that was part of their, like, daily routine. Getting their kombucha, it was their thing. And so, again, these cultural things, these, like, nuances of companies, that's the craziest thing I've learned. There's other crazy things that I probably couldn't talk about openly that are behind the curtain.

I want to go hang with those engineers. Delivery.

Unbelievable. Just never thought I'd be having those conversations, but here we are.

Cole, this has been awesome. Thank you so much for taking time. I got to figure out how to get you back because I already got that line to go through the second half of this conversation. And yeah, I learned a lot.

That's great. It's been a pleasure. Thanks for having me on Keystone. I appreciate it.

Those tuning in or listening to it. If we don't have a second one, hit Cole up on LinkedIn, blow them up and tell them to come back on M and A Science. Hey, Cole, thanks so much.

Appreciate it. Thank you. Cheers.

Cheers. Here's to the deal.

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