Preserving Value in M&A

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The latest from M and a science, visit mascience.com and subscribe to our newsletter. Again, that's mascience.com I'm your host Kisan Patel, CEO and founder of M and A Science and Deal Room. Today I'm here with Jay Detling, CEO of Ancira. As CEO of Ancira, an independent global marketing technology and services firm, Jay is responsible for growing the agency's business, building their client roster, developing and attracting talent, and expanding Ancira's capabilities. With more than 20 years of experience, Jay's areas of expertise include digital marketing, market growth, acceleration, technology, partnerships and client service, and employee advocacy.

Hi Jay Inkisan, thank you very much for having me on your show.

My pleasure. Can we kick things off with telling.

Us a little bit about your M and A background?

Sounds like a great logical place to start. As you mentioned, you did a great job on the intro too. I might might pull you in to help me on some other situations. My M and A background started a couple stops ago. I won't go through every one of those stops, but I had the fortunate pleasure with some of my business partners of growing a digital agency here in North America. Through the later stages of that, we had taken that organization public. It was called Acuity Group and had taken it public. And so that afforded us an opportunity to start looking at other organizations where we could acquire. So really started to cut my teeth. I guess I'll use that phrase on how do you evaluate organizations? And it's not just the revenue and their solution offering, it's all the nuances that you really kind of unpack and from there accelerated my teeth cutting, if you will. I was acquired by Accenture and then integrated the firm I mentioned, Acuity Group into Accenture, and it was part of a very aggressive acquisition spree that Accenture really started before us but really accelerated after us. So that afforded me another experience which was actually working from the inside at a really large, well run organization like Accenture to look at our entities and help guide both the executive team as well as the executive team of the acquisition and folks at Accenture in terms of the merits and pros and cons and how to step through that process, because it is a tricky process. And then from there I had the fortunate pleasure of moving on to Adobe, another high growth organization, and was involved in several acquisitions there. And then that brought me to Ancira, where I am today as you mentioned. And we are currently integrating two acquisitions today. So I'm in an always learning mode and hopefully leveraging some of the learnings from the past to just refine the approach going forward.

I like having immersed on both sides of the table and I think that makes it really unique. And hoping to get some unique lessons out of that too today.

Yeah, hope to share some with your.

Experience of being acquired effectively. How, how do you preserve value while you're being acquired?

It's a great question and there's not a playbook always to share, but there was a gentleman I'll reference actually, Beiju Shah at Accenture. I believe he's head of strategy now for Accenture Interactive. Really bright mind and I had the fortunate pleasure of working with him when I was being acquired. He pulled me aside at one point I was the president of the entity Acuity Group being acquired and he could tell that we were starting to struggle with oh my gosh, how's this going to work and a million micro decisions and how do you do this? And his advice was, you know, you really have to step back and think about what is the ethos of your organization, what is your manifesto and really at the essence of that is what do you stand for, what is really important that you really want to protect and preserve and what are the. Some of the other things that you can sort of let disintegrate, I guess is a better term, because it's really what's challenging. That's the piece of advice. And what's challenging about putting that in practice, especially for founder led organizations or organizations that have been led by people for many years, is you've toiled for so long and through a lot of arduous times to build that entity and there's a lot of pride in that. Everything from end to end and you're proud of that whole thing. And so it's difficult to say which thing you want to die on the Hill for versus another thing. You might be like, I really don't have a big stake in that decision. Going left or right. That was really good advice and I would pass it on to anyone is step back, take a white clean sheet of paper and think about what you really want to protect. And you do have to be prepared to probably relinquish some of those things. But really know what your high priority elements are.

What are the things that are part of your manifesto or ethos at that time?

It was a different time, but I remember being surprised by it. I wouldn't have said it. And this is just a point in time. So I'm not saying this applies to everybody, but I did learn how to separate what I'll call the brand the Office, which is a geographic outpost of people and the community. For most organizations, that's one thing. Especially if you're a single location organization. It's even tighter if you're decentralized, meaning you have a franchise model. A lot of different outposts, they're all the same. But at that particular instance, it was all three of those things were one thing. And we really had to step back and think about what is most important. And what probably goes away pretty quickly is your brand. There's some equity in it, but in most acquisitions it feels like it's 12 months or less. So you should be prepared for that. And then your location gets integrated in some way. You have new people showing up, and some of your people, if you want to call them, your people, are going to other locations. So you kind of lose control of that four boundaries. It's like a parent watching your kids move out of the house. What's most important is that community. I think it's a natural human condition. You want belong to the community. So you have to really think about, okay, if we're changing our community boundaries because they're not bounded by that brand or this geographic location, how do we create that, that community that sticks and that means something.

It's interesting how you describe them and I see how these could fluctuate per deal, per company.

How does this get communicated?

Is the goal to get this alignment on both sides and saying, hey, these are sort of the things that are important for us and what we're trying to preserve and keep a focus on it?

Yeah, I think for astute transactions, because I'll try to compliment both sides for the acquirer and the acquisition if they've been through that, or maybe they have some counsel helping them, if they've been through that before, they will talk about those things up front. What I have found, however, in practice is they're not spoken about enough. There's a lot of focus on the natural things you run to. Okay, what's the revenue, what's the ebitda, what's the pipeline, what's the new capability? What are the case studies? Those are just the four or five things that you run to right away. And the hard part is what are those elements that are really critical for the acquisition candidate? And then if I take the position of an acquirer, how do we feel about that? Is that going to cause ripples? Is that something we work with? Is that going to cause more work, less work? Is that going to be additive? So I think what happens is a lot of those things are actually talked about after the deal is consummated and not enough before. Just in my various practices or experiences.

This should be talked about early in the deal process. In talking about it early, both sides essentially get aligned around it. Does this differ because a lot of people reference value drivers in a deal. This doesn't sound exactly like that. This sounds a little bit more of within the company and the people sort of as an organization, what they value.

Yeah, I'd say it's a little bit more nuanced. Value drivers are the classic management consulting points of synergy or some such thing that are part of a business case and they're super important. You need those. What I'm talking about, maybe our strategic guideposts, they're more nuanced. And I think the other thing that's really interesting about that, if I were to grab an acquisition anywhere in my history or out in the marketplace and acquisition that is about to be required, being acquired or was acquired and you grab four executives from that entity, they might not all agree because it's not something they're walking around with on their piece of paper that they're all high fiving before they go out of the office every day or something like that, like a locker room or something. It's something that, especially when you're building a company and operating it, it's the aura of the company. Sometimes part of it's written down, some of it's written down, some it's kind of the feel. It might be how they approach their customers, it might be how they approach recruits, might be how they deliver their service or product. And sometimes it's very tangible, sometimes it's Intangible. So I think that's the other thing that's really interesting about it and my very strong recommendation for any acquisition leading up to that process. Take a moment with your management team and write those things down. Spend the time kind of rallying and getting that alignment so you feel like you really know what you want to stand for, what you want to fight for. In the discussions beforehand. Afterwards is difficult because you have a lot of things coming at you, including job opportunities for some of the people that were in your inner core and they're moving out of the nest, if you will. So it just. Things get a lot more dynamic, I'd say, after the acquisition happens.

Some of the elements you're talking about really relate to culture, but some of the things are almost a bit outside of that, too. When you gave examples of the brand and things of that sort. So it's interesting how you describe it, and it's a little unique. When I. When the typical interviews I have.

Yeah, I think that's. Kisan. That's a really astute observation, frankly, because it's not just culture. It could be how you operate, how you come together, how you bring multiple disciplines together to deliver, you know, a service for a client. It could be the way you host town halls, something as specific as that. It could be the way your laptops are deployed to your teams, and the kinds of laptops, the kinds of equipment you outfit your people. Well, it could be the way you structure the work week. Do you have periods where there are no meetings and you can't have meetings? So it's creative space for people to think, and it's the whole gamut. And all of those things do play into the culture or what I would say is the ethos of an organization.

Got it. How about integration? How do you create value and integration?

That's a big question. We need a whole podcast for that, a whole second one. But that's what everyone's looking for. It's a cliche phrase, but it really visceral for me. You want one plus one to be three. Know, if you take two organizations and just take their revenue and add them together, that's interesting and that's good. But maybe somebody's trying to make a quarter, so they make an acquisition, but you're really looking for one plus one equals three, or what I would call an accelerant. And I've seen a lot of situations, as you mentioned, been through a few trials and tribulations from multiple sides of the conversation, and I've tested this theory because I'm always trying to prove it wrong, and my experiences haven't proven it wrong. Frankly. I believe when it comes to integration, you want to get and you want value creation. Of course, that's the one plus one equals three that you want to get through the integration phase as fast as you can. Because on the other side of that, it's not always a holy grail, but that's the value creation phase. And put it more succinctly, sometimes acquisitions are made and you'll recognize that, wow, we're going to invoke a lot of change on this acquisition and that's going to disrupt the mojo and momentum they have in the market and the way they deliver. And gosh, if we do that, the business case will be rocked. So let's just let them off the side and let them do their thing and we'll continue to do our thing. What ultimately happens is you confuse a lot of people in both organizations about are we supposed to work together, are we complement, are we talking? Not talking? And that permeates through thousands of decisions every day. You're delaying the value creation. So it's much better, in my opinion, to make some hard decisions and you might bump into some walls, you might break some things, but the sooner you break them, you can move on and fix them and get to the value creation phase. I just think you remove so much ambiguity for both organizations and you get on with it, so to speak, because it's inevitable. Anyway, I'm a big proponent of getting through the integration phase as fast as you can. And fast is, I guess a subjective term. Fast could be 12 months. Fast could be 3 months, fast could be 30 days. So just. But acknowledge that we want to move fast through it and make the best decisions we can with the information that we have today, versus being paralyzed and saying no, too risk averse. In most cases, you want to move fast.

So in your view, integration essentially is this period where you got to combine systems and really do a lot of these tactical tasks to get the entities structured together. And then after that is when teams are essentially focused on more of the value creation activities, which tie in back to the investment thesis of why we bought the company to begin with.

If I could, I would probably separate maybe back office activities of integration, whether it's finance systems or erp, from things that are more value creation, which is how you go to market together and how you deliver for clients together. Those are the most important things and they're certainly aided by the back office things. But I would figure out those Things first and then let the back office things take the time that they need to. It's a very real point that you raised Kisan because the back office things like for example, in a services business, if you take two organizations and you're trying to staff and you're on two different systems of record as to who's available and who's allocated, that becomes very clumsy. You can say, hey, we're all in one master system and we put the best athlete or the best person on the engagement that's qualified and so forth. But if you have two systems it really slows you down. So you do need the back office to integrate. But I think deciding how you will work come together to deliver for clients is paramount. Otherwise you have teams sometimes competing. I've seen situations where I've been into organizations and we've acquired things and it's like a Venn diagram. There's a slight overlap with that acquisition and if you keep them separate it just creates animosity in the marketplace and oh my gosh, you're on the same team. What are we doing here folks? Becomes one of those moments.

So would you look at the go to market part, combining those sales teams together and part of integration and then still looking at the post activities after that as value creation or is that starting to.

I'd look at both of the things can contribute to value creation for sure. But I just. Integration to me, I guess I was trying to make the distinction. It's not just plugging IT systems together or the finance systems. It's some of those other things that are a little bit more indirect first that aren't really system related in terms of what is our product list, what is our product master, what is our offering, who are our teams, how do we staff, is it all one pool and we're working from the same playbook.

Got it. So I guess if you were to put in your words then separating the two between here's integration activities and then the value creation. I didn't know if there's two distinct stages when you sort of focused on the playbook we created to execute integration activities versus the stuff that's more directed towards actual value creation.

Let me give you an example that maybe I'll bring this to bear. If there's an acquisition scenario and the companies aren't integrated and this is just one scenario, there's probably a thousand permutations of this. But if they're not integrated, what they may have are two different sales reps calling on the same company talking about their product Set in the same, I'll be a little direct here, myopic way that they were before the acquisition. And if you integrate and get to the value creation phase, when you're talking about those two distinct products, it might create a much larger opportunity. Not just one plus one equals two. So instead of two $50,000 opportunities, you have 100. It might actually create a much more grandiose project or unlock something that you couldn't unlock before. So all of a sudden you have a 300,000. 3 million. 300 million, whatever the deal is, opportunity, because you're representing a full suite of capabilities as opposed to two individual silos. And that's a very extreme way to represent it, but that's maybe a framework to think about.

I got it. So essentially, the value creation is the end result of the integration, and that's why you want to get through the integration sooner than later.

Yeah.

You talked about decision making. You got to make hard decisions, you got to make the best decisions. You got to make fast decisions. Talk to me about that. How do you get leaders one? I think probably the challenging part I've heard is you start thinking about decisions from the top level of management. But then as you go through integration, there's additional layers and additional many decisions that need to get made. How do you get alignment around the thinking of making decisions throughout the organization to continue an integration, to keep that momentum going?

Let's cut through it, because there's a lot of different ways of thinking. But I guess two things stand out for me, Kisan, just from experience, first and foremost, and it does sound a little classic, but I think it's important, is understanding when an acquisition is made, what is the business case? And that should inform us as to what are we trying to achieve. Not just the qualitative words, but the financial goals, and how are we measuring those goals? When you come to forks in the road and you're trying to figure out in an ambiguous situation, many times, do we go right or do we go left? Knowing how you're proceeding towards achieving that business case of financial outcomes, and certainly paying attention to some of the qualitative ones as well. But the quantitative ones allow you to make those decisions. That's first and foremost that I found very important in terms of how are we measuring it as opposed to, we know they did this amount of revenue and we expect them to grow because they have an operating plan. What is the business case? Because sometimes you may have to give to get. And what I mean by that is the acquiring company may have gone after an opportunity a certain way, and now that they have this new acquisition, it may make more sense to pull back and let the acquisition lead. And since we know numbers kind of make this real, instead of selling the million dollar deal, maybe start with the acquisition who sells a $250,000 deal because that'll unlock a $2 million deal behind it as an example. You have to have some trust and faith in those kind of scenarios. But knowing that you have a business case you're driving towards helps drive some decisions. The second thing I would say is it's very important to play out some decision cycles and tests before you actually get into the wild. Because I've seen so many situations where there's like a PMO organization that's very methodical about setting things up, getting domain names registered, getting people on email, all those really important things that you sort of take for granted maybe. Unfortunately, in some cases they're really good at that. And I've seen high performance acquiring companies have those PMOs and oftentimes what happens is they get through that and they run away to the next acquisition and the business operators are like, yeah, so now what? Who's doing what authority? Did we lose our authority? Do we have to check? I don't even know what I'm doing. Should I just do what I was doing before? And so what I think is really important is establishing what's the governance cadence, what's the span of control, what's the authority, so that it's predictable. I think one of the elements that also reduces is what we call fud, fear, uncertainty and doubt. When you're an acquisition, there are a lot of times that FUD just enters into your psyche because it's the unknown. And if you're the acquirer, that's the last thing you want to have happen. You see this valuable team, this executive team, this operating team, you want to give them all the gasoline so they can go. So I think it's important to think through the lines of governance and the lines of authority and just pressure test. You're not going to think of everything in advance, but try to think of those decisions and how they would be taken so that people can move fast and they feel very empowered, which I think is another important phrase to think about.

Clear governments and a business case that can be referenced for doing the deal. The FUD stuff is real. That's probably one of the biggest things to overcome. Is there an approach around that?

Yeah, let's see. It's a great question. You know, the approach I would Go with. I was just trying to reflect upon a couple situations. They're so bespoke. But what you have to develop are two things. You have to develop trust at levels in the organization because that helps break down fud. And then you have to attack it with a lot of communication. And I don't think I've run into from any perspective. I've had the fortunate experience of having. I don't think I've ever seen a situation where somebody or I've said, you know, there's just too much communication. Wow, I wish they'd slow it down sometimes as a team trying to formulate the communication. It's a lot of work and it's a thankless role sometimes. But you can't have enough communication. You cannot have enough. I would say that is very important.

It sounds like the best approach is essentially to try to over communicate.

Yeah. Again, there are situations for the acquirer, probably taking the perspective of the acquisition in a lot of the answers that I've given you. But as an acquiring entity, that doesn't give you omniscient status where you have all the answers either. And sometimes I found people reticent to communicate because they just don't know. I think when you don't know, give your best answer or say you don't know, being vulnerable is not a bad thing either. And it does ingratiate you with the acquisition in many ways. Yeah. I'll tell you a funny story. It sort of triggered this story for me. I was fortunate to sit with a few acquisitions in one of these stops and we were doing some onboarding together with the acquiring leadership team and we were talking about what's going, what's not going well. And I just remember having just a hearty belly laugh to the situation because the acquiring entity couldn't have been more gracious and hands on and thoughtful and full of empathy and really caring for the people. And there are people involved in this. And then what was the dichotomy of the situation was then you'd get these draconian emails that had no caring and no sensitivity and things like your time report is late and you didn't even know what the deadline was. And it was like felt like you were going to get fired in five minutes. And it was complete 180 from the feel that you had from the people side. And so that happens sometimes and that's over communicating. But that happens and you fall into as the acquirer, you have to be wary of these unintended consequences or unintended scenarios that it's funny to laugh at now, but you never would have thought of that. Things like that could set up a whole team to be like turned off. Wait, we were acquired by these guys and they don't really get us. And look at this email. It couldn't have been more draconian and robotic and less lacking empathy and so on and so forth. But just like we, when we're working with our clients, whether you're a technology company or a services based company, you're always thinking about customer interaction from a360 perspective. The same thing when you're an acquirer acquiring an acquisition, it's important to think about how does our finance team face off, how does our hr, how do our salespeople treat these folks? Let's be realistic. You're not going to get harmonization across all those things because they're all driving different outcomes. But if you at least think about it in advance, you can prepare the acquiring or the acquisition. I should say for some of those, I was going to say deltas, but deltas between those entities because you might have some stark differences. Another one again, since my background is very technology based technology organizations, product organizations or services organizations, these will make sense. But sometimes when you're acquired, you'll. You're coming from. So I'm taking the acquisition sort of mindset. Now you're thinking, oh, we're an end to end business. We have our own marketing team or sales team and my finance team and we have our executive team that does their thing and I'm part of the product or service team. And when you walk into an acquisition environment and sometimes when you're working with their sales team, you're just another delivery resource. You could fall into this situation where they don't really care about all the other stuff, all that other ethos that you might have had. What are you going to do for them in their account today or yesterday actually. So with that sense of urgency and so I think for the acquiring company, really want to have your eyes wide open too and think about what's that experience going to be like because it can be jolting at first and going back to something we've talked about already, that communication and acknowledgement of those things, even if you can't solve them, I think takes down the anxiety level that your people sometimes feel.

What about like stakeholder alignment? When you get these friction points for either people don't agree or this group's not communicating with this other group because some of these whatever sentiments that are around, do you get involved with that, is there a way to help overcome some of those challenges?

Yeah, I'm trying to think of some sort of succinct ways to address that, because they have a way of perpetuating if you can't stamp them out. What I have found is wherever you get those kind of elements, you might get flyby comments. And as an executive, you're always faced with, okay, I appreciate that I want to be in listen mode. I have a weak weakness. I want to be more in action mode. And I have to guide myself to be in listen mode sometimes more than I am. But I think it's important then, rather than say, oh, we're going to run a fire drill, because I heard this one thing today, I'm going to call five people into a meeting and disrupt their day. I think what you have to try to do is be proactive to those things. And certainly you can't always be proactive. You have to react to the situation. But when I mean proactive, it's nice if you have the business case and some of the things you're driving towards, financial and qualitative, but sometimes you'll have to step back and say, you know what? We have these five or six issues that kind of seem to be cropping up. We might need, I'll call it a set of strategic guideposts. And let's get in a room where we're going to stack hands. And there's a phrase, I think it's borrow it, or at least I'll credit it to Jeff Bezos and Amazon, where you disagree and commit. I think that's the phrase.

Hopefully I got it right.

And that's a very good phrase to bring into this concept. I'm talking about where alignment is so important. Even if we disagree, we have alignment as opposed to festering and bouncing around and creating more anxiety. I think from a principal standpoint, when you're combining organizations, because you said it actually cultures are combining. You want to reduce anxiety as much as possible. So having that strategic set of guideposts that you didn't think you needed right this month, we could be operating fines 30 days from now. We've had four or five run ins on something, hey, let's get in a room and let's stamp that out and stack hands. And it might take a couple executives above the teams that are having friction to drive that. But I think you have to be ready to do that.

I know these strategic guideposts vary company to company. You had some examples. I'm just trying to think if there's other examples of what would be included in that.

For example, I've been in situations where we've decided to retain a brand much longer than otherwise would have been thought of. And that's a very critical one. Another example might be this entity doesn't have distributed delivery, which means global delivery capabilities. It's just using North American resources. Today a strategic guidepost is everybody's going to have that. Oh, okay. That creates a decision that we don't have to make that decision. We know that's the outcome we're driving towards.

We're going to.

Okay, those are two really good examples because I've run into those multiple times. In fact, the brand one is a very ping pongy one. Sometimes people are kind of like, we'll figure it out as we go and we have to see if it's creating more value for us. People want to preserve flexibility, the acquirers. So they won't want to come in unless it's a direct competitor. You won't want to crush the brand because if it has equity, you want that to run as long as you can. And it's not always clear when to stop or end. But anyway, the brand one is a volatile one and you know how we're going to deliver. Methodology where people are located is usually a pretty big one too. So that's why I picked those examples.

Whether you're going to be remote or in the office for next year, things of that nature.

Yep, exactly.

You mentioned you're doing a couple integrations now. Can you tell me about them?

Yeah. So at insurer we were fortunate to acquire a great ESP email service provider organization out of Atlanta called Brightwave. And we were already doing some of that work within Ancira. So we acquired that entity in 2019 and had operated together and then fully integrated in August of last year. And so that is proceeding successfully. Every so often we have some things where you have to step back and say, oh, there's a decision point. How do we optimize this decision point? And then a second one. We acquired a really capable, highly capable digital marketing technology element out of CDK Global called CDK Digital Marketing. And we've rebranded that Synchronized. And so that integration is happening and it's mostly done really. We have a few last stages with some back office technology that we're working on. That is the second integration where we have really come together as a team. I'm really proud of this because we really had a core which was Ancira, then we had Brightwave, then we had this element, CDK digital marketing. We stepped back and said it's a really good time for us to think about our purpose, our vision, our mission and our values. And rather than us being the acquirer, if you will figure that out, we created a cross functional team from all three cohorts and we defined that. So it created some muscle fiber that really helped glue us together. And just doing that isn't the only thing that you need to do. But it was certainly really important because we learned more about each other through that process too, which I think is really important.

Can you walk me through that?

Yeah. So basically, when you're going through the definition of the purpose, the vision and the mission that requires you to do some soul searching, like what are you all about and what are your points of differentiation and how do we want to represent that? So it's compelling for customers when we talk about it, so it's compelling for our employees. So without kind of reciting those things, I know some of it by memory, some of it I'd have to refer to a PowerPoint, but we went through some workshops together and we agreed and we disagreed on certain things. And then we created a core team that then went back to other teams for input in those three different cohorts that I mentioned. And then we came back together and agreed on what those things should be. And now we use those. Here's where it probably is put into practice the most most. We have quarterly all hands and we recognize our employees around how they demonstrate those values, how are they living those values. So that's a really unique thing because now we can look at across the company and it's us applying those values in a consistent way, but yet unique and different in each situation. So it becomes actually really enjoyable. Employee recognition is a great thing to do anyway, but it creates a framework. Instead of having three different frameworks and going, why do we do it three different ways? That's not value add.

So you're working together with the target entity on that.

I'd be, of course, yeah, that was a point when I said three different cores. We're all working together on that. I think what's really important with something like that, it's not just a team that came together and produced an output. And that's a nice PowerPoint that we showed once. The idea of resurfacing the values and stepping back and thinking about those, because those are really part of our ethos now at ncira, as we propagate that, as we talk about that, as we recognize our employees for living those values and exemplifying those values kind of cements that even further because becomes something we're all a part of, not something they joined or something that was imposed on some entity or something like that. And we had the luxury of doing that. I've been part of larger organizations where the phrase I would use, Kisan is you're grafted in. And it's because it's metaphors. Sometimes I get them wrong, sometimes I think I nail them. I don't know. That's a subjective sort of opinion. But sometimes grafted is a graceful way of saying it. Steamroller is another way of saying it. But been part of a really large, you know, when I talk about companies like Adobe or Accenture, just really large global organizations, they have that stuff well oiled and they're really good at it. And a small entity is probably not going to come in and re establish the values of a large organization like that. They're going to assimilate those things and figure out how do they make them their own. But it's a different situation when you have different sizes coming together.

Where in the deal life cycle do you do that workshop exercise?

In this particular example, very unique. This was after the deal, so the deal was consummated and probably the later stages in this particular example, the later stages of integration, in fact. And I think that was just specific to what we were doing. We were recognizing that both of these entities have a really big part to play in the future of our organization. So let's pull them in, let's get them at the table. It's going to serve us all well to deliver upon that business case. For example, the reason I'm saying it was a very bespoke and unique situation. If we're fortunate to make another acquisition, I don't think we're going to crack open the, the editing board and say, all right, this is up for debate again, let's talk about it. We'll have to look at is that an inflection point in our company and what would trigger that? We're about 1700 people globally. I'm just throwing a what if. If we were to acquire something that was 2000 people or 1500 and had a unique perspective or something that was wildly different than what we're doing. Those are moments I'd probably step back and say, hey, we should reexamine some things. If we acquire a 25 person firm, you're probably going to graft in and assimilate in a different way. Different way. And those aren't black and white thresholds, but they're extreme on purpose so that it seems very clear what we would do.

And that might shift when you would actually do that.

Yeah, it could absolutely shift. It could absolutely shift. Yeah.

If you do another acquisition, what would you do different? What are the recent lesson learned?

If I did another acquisition. Geez. I'm just trying to figure out because that implies like something didn't go well and Kisan, everything's always going well.

We learned something from every deal. That's the one thing I learned.

Yeah, no, for sure.

This is your moment to be vulnerable right here.

Yeah, no, that's okay. I think what I would. If I could, and it sounds a little bit like retread, because we've talked about this before, I would do the integration faster. And I've always felt like there's a set of moments where we're talking about what might be or what should be for too long as opposed to just getting on with it. Because the sooner. Let me be very clear, the sooner you do that, you're talking about your product or your client or your service and not talking about should we have half days on Friday or should we have full days on Friday? Super important stuff. But I would garner to say your clients and your product and your service is probably more important in terms of the viability of your business. And that's a dangerous thing, maybe the way I said that. But the other things are very important to your culture and the ethos. So you want to get them right. But I think debate them too long. Just moving forward and fast on those kinds of things. Because even if you make a decision and I just picked, neither one of the entities had the half day, Friday thing. So I just picked something I've run into before. Before. But even if you pick the wrong one, you can, two months later you can say, you know what, we've reconsidered. We've had some new information come to light or whatever the situation may be and say no, we really think that's a good practice. We're going to do that. Okay, great. You didn't abate it for six months. You made a decision and you re. You change course if you need it, but move on. I just like to move fast. It would be the thing.

So stay prioritized and push fast.

Yeah.

Communication. I know we talked about some of this stuff, but important points around communication when doing these deals.

I've been in situations, I'm fortunate to be on both sides of the deal structures where you still enable the Acquisition to have communications unique to it. Meaning as a former leader of a company acquired that was acquired, I was able to have town halls with my team and talk about the health of our business, how the acquisition is going, and I didn't have a whole panel of other people that were from the mothership, so to speak. And same thing when I was acquired entities. We've enabled that and I think that's important for developing trust. And do you want to do that perpetually? Probably not, depending on your integration phase and what you're trying to do as you bring a community into a larger community. And I'm using those words purposely, you have to be thoughtful about what are you doing to let a community dissolve because it's attaching to a bigger thing or perpetuate, if that's your strategy. And I just think having the authenticity of, of the acquisition, being able to communicate to itself, helps build trust and actually creates a stronger bond in many cases. And you have to be thoughtful about that too because you want to make sure it doesn't evolve to an us, them sort of situation. But more of a, hey, how's everyone doing? We're moving along the path and here's where we're going, here's what's not going so well and we're talking through that, we're working through that, but here are our next steps. That comes across much differently than maybe draconian like now you must do or something like that if, if an acquirer were to take that approach. So that's something that has stood out for me is enabling that talk with the target company.

Not at them.

Yeah. But also enable them to talk amongst themselves and not feel like they have informants dropping in and listening for how they say things and trying to redirect. I mean, over time you have to change that. But it all depends on the boundaries of the communities that you're trying to foster.

Do you encourage that then specifically? And how do you do that?

Yeah, I think it's important. Step back and you think about change. Change at any level. It requires communication and requires two way communication too. It's not just talk ad it's creating forms for people to express opinions and share their thoughts and views. And I think it's important to facilitate that and enable that. And maybe there's an acquisition that's not doing that. I would absolutely ask them to do that if they weren't doing it. But the key that I was keen on is most people try to stop it and I would say, no, let it happen. You're going to develop trust. And I think trust is so important because you reduce that FUD factor when you have trust.

Makes a lot of sense. Any other tips around communication?

The other one that stands out is as an acquiring entity, pay careful attention to the acquisition and provide some interpretation of the communications. And what do I mean by that? So as an individual that's been a part of really some large organizations, global organizations that I mentioned, you get a whole bevy of communications and you learn what you have to really pay attention to versus what you can kind of let roll off your back, that guidance. Some things are really important and some things you laugh at and some things you don't even acknowledge. And I think providing that perspective to the acquisition is helpful, especially if you're a smaller entity folding into a larger one. You may not know. And that creates anxiety in terms of what's important, what's not important relative to that. The other thing that comes to mind too is having been in this space, it's a constantly evolving space, the digital space, whether it's technology or marketing, flavored and product or service, definitely evolving space. And there are irreverent factions. Sometimes people are looking for that because they're looking for innovation, and ideas come in all shapes and sizes and creativity comes from all places. You have to be comfortable enabling that space for that acquisition to still be a little bit of who it is. I'm just thinking back to my experience. A couple of the acquisitions have been, maybe I'm probably saying this gently, a lot more irreverent than the acquiring company, but that's kind of part of the ethos of what they were acquiring. And I bring it up relative to communications because that plays out in how that entity communicated amongst itself. And so you have to think about that going back to the start of our conversation. That's one of their ethos. Hey, a Friday email that has some real edgy ways of looking at what happened this week and client opportunities. You wouldn't want to stamp that out because that's part of their culture and that's how they feel connected. And I just use that as a really specific example that I think is important to consider.

That's a common thing, startup culture and making sure you don't destroy the innovative machine. Yeah, these are all really good points. And I know you had some good thoughts earlier about the guideposts and making sure that. And is that something that's really transparent, that here's something that anybody can access, or it's pretty clear, or is it up to leadership to really reference it in how they're making decisions.

Yeah, there are. Sometimes it's important to share with the broader team so they feel like there's a consideration for those things as opposed to management seem seeming tone deaf. So sometimes it's important to definitely communicate it. There are other times where it's probably more of an lt, a leadership team set of guideposts that could sort of be the roadmap for how we interact that maybe isn't meant to be distributed because it could be misconstrued. So there's really two flavors I've found.

Hey, so one thought was how do you manage the governance and I guess authority when it comes to this whole transition period and making that clear and frictionless.

Building on my experience, what you typically want to have is executive sponsor a core project team and then extended project team that's contributing to that integration process. And an executive sponsor oversees the integration and the acquired entity. So they're usually in some ways the buck stops, the decision stops with that person. So it's very clear and they're from the acquiring entity. That kind of structure works really well. They're empowered to make decisions and then the acquisition clearly knows who they roll up to and it's not amorphous. That's how I'd address that. I think that's really important. And it has to be somebody who also is well respected at the acquiring entity and knows how to work well across different functions. Because any acquisition is going to touch. It's a horizontal thing typically. It's going to touch so many parts of the business that it's melding into, if you will. It's really important that you have an executive that has clout and cache with amongst its peers, but also with areas of the business maybe that person doesn't work with.

Got it. So make sure there's an executive leader there that things can roll up to.

Absolutely. And be the champion too. They have to be a champion of. Because there's so many pressures. As I was mentioning before, what I've thought about in my past is sometimes you get very overzealous salespeople that are ready to sell that new product, ready to sell that new service that the acquisition brought to the table. And they could sometimes create rules out in the wild. That's how it happens. And you need an executive who the acquiring entity feels like, oh, they have my back, otherwise you acquired me, I guess I have to do what you said, sort of becomes the governing body. And that's not a really healthy way to operate.

Getting acquired is often a one time life event for CEO, founders, executives and it's interesting because it's hard to be prepared for that lifetime event. You sort of put a lot of emphasis on the front end of the deal, getting the terms, is there an earn out attached to this and all that nuanced stuff. Then the real activities comes after the close with integration that we spend most of this interview talking about. What's your advice to CEOs that are going through that first time getting acquired? It's interesting because I've talked to people like yeah, you should just go through it to get the experience so that you got that track record of building and exiting. But I'd love to hear from that because there's not a lot of reference points out there for those CEOs that are going through that.

Yeah, Kisan, I think you're right. I wish I would have had like a. It's good to hear that because I having gone through that in that role, I was, as I mentioned, I was president of an entity and most of my executive team moved on after the transaction moment. My CEO did and so I was still driving forward with a couple of their fellow executives. But as the president a lot of decisions just came to me and they were first time decisions, they were atypical, they were unusual because you knew that was a point in time. Not something that's going to be something we run into a lot that was fun but also scary and also challenging and daunting. All those things wrapped up together. What I tried to do, it just came to me. Maybe I had some advice. I just can't remember who provided it. Either way, it was my operating model was first and foremost, don't worry about myself because there's fear and uncertainty and doubt all up and down through the organization. Don't worry about myself, worry about the team and just worry about that. For the first 12 months, make sure that we've landed, kind of plane landing, which sounds like a quick AI event versus a 12 month event. But just make sure we're landing in a comfortable way with a Runway where people can be successful. I use a phrase, sometimes I can open the door for you. You, you have to walk through it. So that kind of mindset, let's set the stage so that our teams can be successful. What they do in this wonderful environment because usually it just provided a bevy of new opportunities almost to the point of overwhelming. Let me land the team and be focused on that for the first 12 months. So that's kind of point. One, what quickly should be apparent day one is that you're really no longer needed as the president or CEO or whatever even. Lt so it's not singular to a person. You really no longer need it as a governance function. Over time. I think it's important as the individual or individuals that are running an acquisition, they really have to understand, okay, after the first year, I probably need to make sure I'm figuring out what is my career path here. Because it's not captain of the ship anymore, whatever the ship is. That's an interesting thing because you also spend a lot of time building something, then putting it up for sale, getting it sold. And then quite frankly, you're taking it apart because you're integrating it in the first thing sounds very selfless. Let me be about the people. And that's great. I think most people would subscribe to that. But the next two things are really hard because your ego, if you're in that role, you probably have some level of an ego, let's be honest. And you're very used to calling the shots. And all of a sudden you have to let go of that to a degree. And then the pride of authorship, being the narrator, being the architect of that business and watching it be dismantled, not in a negative way usually like I said, a really great way for the employees to have even better opportunity. I remember for me there was one area of the business. I'll just keep some of the specifics benign. But we built a really strong capability in the creative space. We were acquired and a smaller entity acquired next to us. And we were forced with a decision. Should we allow our creative team to join them so that they could become an even larger force in this organization or do we keep it to ourselves? For me it was very important to give our creative team the opportunity to run and be part of something that was going to be even bigger, bigger than the stage they were on today. But that required pulling something apart that was really important to us. Those are the three things. It's like thinking about the people and how do you land them very in an opportunistic great way. And then two, work yourself out of a job. And then three, dismantle the business that you've built. Those are three kind of inflection points or initiatives you have to work through.

Yeah, that takes a lot. That serving leader mindset, open minded, a lot of good leadership skills to get through that.

Yeah, it takes. You have to figure out your relaxation method and your keep your feet on the ground method of choice. But these kind of Discussions make it sound really easy and it's fun to reflect, quite frankly. But I do remember a lot of moments where they're probably pretty lonely for those leaders. You're not really sure who you should be vulnerable to without talking about yourself, which sounds like you're full of yourself. There's not many people you can talk to about what is this like and what guidance might you have. So it is an interesting period that.

You go through working on an integration therapy service.

Yeah, there you go. I see a side business starting for you.

Yeah. Well, we'll talk later about it. Jay, last question. What's the craziest thing you've seen in M and A?

I kind of have two answers. One that's very. Jay, you can do better than that. So I'll lead with that one and I'll get to the better one. It's not really crazy, but it really struck me as a surprise in the moment as we were being integrated through one of my periods. I never would have thought this came up, but one of the biggest snags that we had, the technology footprint, that is laptop that we had deployed to our teams, we were a smaller entity, was way better than the mothership we were being acquired by. And that became a big flare up of all of a sudden we were taking things away from our people that were so important. And I was thinking, goodness, of all the challenge points I was going to run into, I didn't think a laptop standard was going to be one of them. And it does sound basic now when I tell you the story. But it came out of nowhere and it came fast and furious and then became an intergalactic huddle that we had to have. And ultimately we made the right decision, which was give the people what they need, great technology, get them aligned, and have them build awesome things for our clients. So that was one the more crazy story is under the auspice of be prepared for anything. And we were making a management change in a acquisition. We just weren't sure what to expect. This particular acquisition had a lot of what are call it, it was bugged, you know, so it had a lot of technology in the office space and it was bugged. And we didn't know where things were. And we also didn't know if the management team that we were delivering some hard news to was going to take it the right way. So we had to have security escorts with us and be prepared for anything. And I know that sounds really extreme, but maybe some of the information we were getting was highly volatile. What happened in the end was very anticlimactic. But I remember going into the office thinking this is not what I signed up for. I had no idea. We had like weeks of planning for this moment and then it ended up being anticlimactic, but it just kind of step away. You sort of think about, wow, I would have never thought that we might run into an altercation, per se, or it might flare up. Yeah. So it was pretty intense and then it ended up not being intense, thankfully. But that to me was one of the craziest things that I've experienced and hope to not experience that again.

That's insane.

Yeah, totally insane. And I left a little color out of it on purpose just so you couldn't trace it back to the situation. But anyway, wow.

M and A in all shapes, size, forms and situations. Jay, thank you so much for your time today and sharing your experience.

Kisan, thank you very much. It's been my pleasure and great questions as always and I hope it provided some value to you and your listeners.

Thank you Jay and here's to the deal.

All right, here's to it.

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