Staying True to Culture in M&A

Foreign.

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Foreign.

Hi, I'm Kisan Patel, CEO and founder of M and A Science. Joining me today is Trish Moscone, Executive Vice President and Chief Strategy Officer in Corporate Development at Synchrony. Today we're going to talk about what cultural differences to look out for when executing M and A and how to to preserve a deal in the face of those differences. How are you doing today Trish?

I'm doing amazing. Kisan, how are you doing today?

Pretty good. Off to a good start. Can we kick things off by telling us a little bit about your background?

Sure. I spent more than 20 years in strategy consulting, so spent a good part of my career at McKinsey based out of the New York office, Moved on to BCG. My predominant focus through my 20 years in management consulting was financial services and fintech. Moved on to Blackrock where I was one of the leaders in the Financial Markets Advisory Group and stood up their strategic consulting capabilities. And then just a little over three years ago, moved over to Synchrony where as you shared, I lead strategy, I lead Corp Dev, I lead our ventures team and I lead our strategic partnerships, which has just been an amazing journey.

So you're never bored with nothing to do?

Exactly. Always new and different things, which I think been the sort of mantra throughout my career.

So let's talk about culture. Why is culture important?

To me, culture is just a critical part of an organization's identity. It's how people perceive an organization, it's how the employees perceive the organization. And to me it's ultimately going to determine how we are able to achieve growth. It creates a sense of belonging. It's to me just a critical part of the DNA in a company. And I think why I feel like Synchrony is the perfect fit for me is because it's a company that just focuses on culture as a differentiator. It's a core part of our identity. DEI is a huge component of our culture. In fact, it's a business imperative, one of 10 strategic business imperatives overall for our business. And we live that value every day. And I've integrated it into exactly our approach to M and A and our perspective and how we view the market and the different opportunities in the market to make sure that the companies were looking at share these goals, share similar cultures and would be a great fit should they be part of the Synchrony family.

Have you worked at a company where culture wasn't the focus at all?

I think different companies view it differently. What's important is it got to fit you. Personally, I'm an extrovert, I'm a big people person. I like getting to know people, I like getting to know my teams. It's not all about the business to me. And Synchrony as a family, it's very collaborative. It brings people together about people's families. You met people's families. We go to each other's kids, graduations where we used to prior to Covid and now hopefully that's all coming back. So finding companies that fit you individually and how you relate to culture is extraordinarily critical. That's why I think it can mean different things for different companies at Synchrony. To me it's a very distinct one and it's one that matches very much my personality and what gets me excited to go to work every day.

That's a good way to look at it is looking and identifying with yourself and how you match or fit with that unique culture of each company. Let's talk about hr. How early do you bring in your HR folks in your deal?

So for us, our teams are cross functional. I have a very small M and A team and so if we're looking at a deal, we're bringing in quite honestly folks across the entire company, HR and critical to that. So they'll be part of the discussions almost from day one. Obviously many of our opportunities are around either a business perspective or a product or capability perspective. So we'll have sponsorship at the leadership level, either representing that particular business or representing the product or growth area. But then the cross functional teams come into play. Technology's at the table, HR is at the table. And because we're bank regulated, risk is at the table. And so we're taking a look at all those aspects, but they're a core partner in our diligence process. The people, the talent. More often than not, in financial services and Fintech, you're buying people. And for us, HR being a critical component of that, to actually understand the fit, understand the desires, understand where that talent wants to go and how they're thinking about growing and scaling the company as they become part of a larger corporation are just critical to the excess of that integration. And so in my mind, you can't bring folks in early enough to really take part and collaborate and actually own the integration and the success of that venture. Across all of synchrony.

What are some of their views that they contribute to when they start assessing people?

When we bring senior executives into synchrony, irrespective of whether it be through normal hiring process or an acquisition, you actually go through a bit of a people fit assessment. Are you going to fit the culture? And so we'll use some of those same conversational questions as we talk to the leadership teams across different organizations that we'd actually go into diligence with. And then we're also very much looking for what they're looking to achieve out of their careers. You've got once again, very different perspectives. Right. For us, if it's a brand new capability that we don't have, it's going to be extraordinarily important to us to retain the senior leadership team to actually grow and scale that company. And so understanding what they're looking for, are they looking for quick exit or are they looking to help grow and scale that company and be part of the synchrony family? And understanding that and understanding what we're actually buying and what of those two we might need are going to be critical to really understand. So you have to communicate, you have to ask the questions and be willing to have the conversation so you get a good understanding of how folks are thinking about the future and what they think their role in that future would be and what their expectations are around both that role and broader roles within the organization and how they want to see themselves fit and what their career expectations are. So folks are fully aligned coming into it. There's no surprises 6, 9, 10 months post acquisition as to how you're each thinking about the opportunities for both the business and the individuals that you're bringing over, particularly the senior team.

So there's a mix of understanding the cultural fit of the organization, looking at, as you mentioned, career goals, but essentially letting that get into retention and identifying flight risk as well.

And as well as how they plan on contributing to the growth of the company. The success. As with any acquisition, we're laying forth an expectation around certain synergies and certain sets of opportunities, growth opportunities. If we're looking to grow our distribution capabilities or product capabilities. And so you want full alignment that both sides see that upside as a way of moving together as part of the opportunity ahead. People, success, combined success, you're sharing that success.

So the reason I want to do this interview was your views around culture. Talked to a number of executives and it vastly varies from one extreme to the other where our culture is identified by the way we rally around our financial goals and that when we bring two companies together, as long as we're rallying around those financial goals, things will be fine and we'll become one culture versus on the other end. There's very much considerations around what's important in the definition of these organization cultures and really seeing how they'll come together to make sure that there's an alignment and commonalities and so forth. Like to hear from you in terms of one, you've actually walked away from deals because you've looked at it and said, hey, there's not culture fit. So maybe we can start with that of actually saying, hey, we're not going to go through this. It looks good on paper, but there's reasons. And let's talk about that.

Really interesting question and to your point, definitely one that hits home. Because I'm the Chief Strategy Officer, I have to admit I lead with the strategic fit and whether or not a particular opportunity for us is going to provide the right strategic growth for the company. The numbers are a piece of it for us and obviously the numbers need to make sense. But the longer term opportunities around growth are what's really critical. And so as we were looking at a particular part of our business, we had determined that there was adjacent business that could be very important to our overall growth strategy. So it wasn't in a space where we directly played, but we thought the combination of what this adjacency could bring and what we could do would be extraordinarily important. And so we went out and did a scan of the market. We identified top 10 players and based on ownership and markets they served and were predominantly focused in the US the focus area, geographically, we called it down to potentially three targets and started our reach out. First on our list was a particular company that we just thought was the perfect size, perfect location, had enough of a foundation that we could build upon because it was going to be a new business for us, but had a lot of upside potential. And we went off to meet that company. So we went to them quietly, but we went to them to kind of meet with them, sit down with the leadership team. It was obvious looking back that they were probably looking to overly impress, perhaps in the way they chose to conduct themselves in the meeting. But the CEO pulls up in an extraordinarily fancy car, extraordinarily, I'll just stress, extraordinarily fancy, which is very unsynchrony like. And proceeded to run the meeting in a very commanding control. He would determine who was going to be addressed at that meeting, who he was speaking to, to whom he would answer questions that were being addressed to him, or from whom he would answer the questions. He had made a decision that one individual in the room, and it wasn't me, was in. And I can tell you, we walked out of that meeting about an hour and a half, two hours later, and myself and the head of that particular business area looked at each other and said, this is just not synchrony. It's just not going to work. They might be viewed as the best candidate on paper for us as we look to push forward with our strategy. They were in our price range from what we could gather. The location was exactly what we needed. The number of subsidiaries underneath it made sense. So everything to your point earlier made sense on paper, but the fit was just not right. We walked away, communicated back to the rest of the leadership and the board that this company was not going to work for us, and subsequently found a perfect fit. We had to go through more than one company to actually find that, but we found it. And I was only with Synchrony probably about six or seven months at that point. And it just so resonated with me and made me so excited about the decision I had made to join Synchrony that quickly. Two executives could look at each other walking out of the room and say, not right for us. No questions of each other's judgment. We knew it in our guts. And everyone supported that decision back home, even though they had expected that we were going to come away starting to negotiate a deal for the company overall. So, yes, you do walk away.

It's a vastly different management approach that essentially was the big cultural difference.

Vastly different. And you didn't see a way to bring those two together.

And then that's what I wanted to get into is where you look at deals, and I want to know you understand where that tipping point is, because obviously you're not going to come across two identical cultures. I'm curious if there's things or areas where, hey, we may look past certain things where we see it as being different. And I don't know if you even have examples of that. But I'm curious if there's something where it's distinguished. Like, obviously, this is not a fit and it's going to be difficult to grow together versus, hey, there's some differences, but they're acceptable differences. I don't know how you would differentiate that.

No, and I think you do. And I think you know it in your gut. Synchrony, One of our core six values is caring. It's a caring culture. And on the walls of synchrony is actually the word caring. And we use it as we define so many aspects of what we do. It's grounded in inclusion and collaboration and respect of others. The lack of those things will not be tolerated. And so what happened in that boardroom that day was a total lack of respect for senior individuals who had come down to meet that company to potentially bring them as part of that company. And that lack of willingness to collaborate or respect that each of us had a reason for being there and a value that we were bringing. And not including the folks around the table was a non starter.

That's where you identify the incompatibility.

But I would say other aspects. Right. We've met with other companies that you see those aspects, but perhaps their growth trajectories weren't what we had expected, or their target markets weren't what we thought, or their product mix wasn't exactly a perfect fit. But there are other aspects that potentially through collaboration and discussion and communication, you could see a path to a different future when you're fundamentally in different places. From a cultural standpoint, I don't think you can change individuals based on those characteristics, whereas you can realign your business goals and your business objectives and potentially your R and D and how you're thinking about the growth for the future, you can come to terms on that and make necessary changes. As long as you have fundamental respect and inclusion and caring characteristics that are so core to the culture at synchrony.

Very true. Reminded me of a sales book I'm reading now where one of the lines was, if mom and dad couldn't change them before they turned 20, you can't.

It's very true. It's very true. How much is nature over nurture? I would say as a mother of twins, I can tell you it's nature over nurture.

There's a whole conversation to have. Because I wonder, even with twins, if you identify a variance of it between each individual. I feel like that fluctuates.

It does. It fluctuates over the years as well.

There you go. So there's a lot of variables there. What is your core culture in your company? I know you mentioned carrying, but what else is core to your culture?

It is an extraordinarily inclusive culture. You're going to bring a team together to have discussions around potential decisions and everyone's voice is heard. Everyone's voice doesn't always play out in the end, but your voice is heard. We obviously defer to folks who either have the expertise or the business area that would actually be pushing a certain idea forward. But it's a culture where we're going to talk about things, we're going to be transparent about things, and we're going to get input from others. You're not always expected to integrate everything fully, but you are expected to listen and take things into account and ensure that we're making the best decisions for synchrony overall and not a particular business area or division or product area, but that it's providing the right set of opportunities overall. We work together rather than being asked to exceed at each other's expense.

Inclusive transparency and a lot of mutual.

Respect for the talents that each of us bring to the organization, which are different depending on backgrounds or areas of expertise.

You touched on diversity earlier. How do you think diversity helps the growth of companies?

Oh, my gosh. As a woman business executive, obviously I have quite strong feelings, or maybe it's not obvious, but I have quite strong feelings. To me, it's hugely critical. It helps with retention of our employee base. It helps with innovation. To me, diversity of thought, which usually comes through diverse backgrounds and ethnicities and genders coming together. You just get more creative ideas. You do, you have different dialogues. You get bolder about trying new and different things as to how you're going to move ahead as a business. And to me, it makes us better business partners. The majority of our business is B2B2C. We have very large partners and merchants as our customers, and they're all very different across retail channels, across digital channels, small business, large businesses. If you're not bringing diverse thought to those and responding to where each of they are coming from, we're not doing our best by our partners and our customers. So it's extraordinarily important, I think, to bring forward diversity every day and now in particular, when to me, the whole talent pool has changed. The whole dynamic has changed through Covid. We're work from home permanently if folks would choose to do so. We are not asking our employees to come back to work at all if they are much more comfortable and choose to work from home, which actually opens up just a whole different level of talent opportunities for us. And to me, allowing a diverse workplace to be part of the synchrony family is just going to strengthen us in everything we're trying to do from a growth perspective for the future. I think it's critical. It's critical.

Do you think a remote model will actually enable or make it easier to recruit with diverse talent?

I think so, without a doubt, because we had a handful of locations across the US and you were a present organization, you were in the office. It was very much part of who we were. And as a result you were only really had access to folks in certain geographic areas. And I know I passed on some great talent because it wasn't mere one of our key offices as I was looking to build out my team. And it's amazing how 16 months of all of this Zoom meetings have opened our minds to just where people can reside and how they can operate differently. It's now no longer a barrier. I don't have a geographical location on my open job rights anymore.

You're not forcing your team to come back to the office?

No. It used to say New York Metro for M and A and it used to say San Fran based for ventures. And it doesn't say that anymore.

All your M and E roles are remote.

And now we will choose to come back at certain points for meetings and probably just coming together for strategy sessions. And quite honestly, connectivity. We're all craving it right now. But we will not be mandating that anyone is back in the office at all. I never thought we'd do a deal via Zoom, but we closed a deal in early January and never met the target line, which I would have told you April of 2020 was an impossibility, would never happen.

I want to go back to reading Culture in the Remote Environment. I remember interviewing an executive who's done a number of acquisitions. I was so impressed with the consistency of the culture within all these 30 some odd acquisitions that he compiled together in his consulting business. And he told me the number one thing he did was walk around the office, that if I walked around the office, I knew immediately if there was going to be a culture fit or not. So now to contrast that with the last deal that you did. Completely remote, where he did walk around the office. How do you Go through that.

It's a great question, Kisan, and I'm not sure we've nailed it. I'd say in this particular case there was experience between the two companies before. So per chance, maybe one could characterize it not as a totally remote relationship. But that being said, we spent a lot of time on zoom calls, both individually with different parts of the organization collectively. And so you do your best. I agree. There's a certain, I call it tummy rumbles. There are certain vibes you get. There's certain feelings you get when you have the opportunity to walk the halls and get a sense and talk folks in a more casual way, I'm confident it's doable. I think if it, if you're talking a merger of equals or you're talking something that's quite substantial, I think your probably friends expertise might prove to be a necessary component. This particular acquisition was of a size that I think we felt comfortable moving that direction. And so I think you have to be respectful of just where it fits and how much you do know and about the company. Probably prior to the two to three month diligence period that you're going through.

Do you think there's other areas that you end up expanding diligence, given that, hey, I'm not going to office and I'm not doing the tummy rumble test or really finding that is there sort of, hey, we're starting to really emphasize these glassdoor reviews and reading into them. Is there other things that sort of get amplified in conjunction?

You are right in that I think references and other touch points across that organization that you might share definitely come into play. I think you have to tap all your resources to ensure you're making some of the right decisions. And I think it also probably includes maybe even broadening who we bring to the table on our side. Because you get a lot of different leads and I think you're going to center in on it. If you've done enough of these and had enough of the conversations, you start to center in on, does this sound right or does it feel like it's a performance for a couple of zoom sessions?

That's a good point too. You can have more people on those calls. I like the other point around, was there any preexisting partnership relationships? And I, I feel like with this going on, there's more opportunities to do that. Can we test our relationship first and see how it goes on a small scale before committing to something really big?

We're even pursuing that a bit. We've now taken A bit of a broader approach in that companies that we're interested in just in what their business model is. We've actually reached out to folks. I don't know if they're a partnership opportunity or quite honestly an acquisition opportunity. But we've actually started building more direct relationships. So kind of take the bankers out with companies that were interested in getting to know just to see if they're there. So we had a really interesting conversation last week with a frenemy. Essentially someone that could play in my space. Doesn't exactly play in my space. Somewhat of an adjacency and it was a leadership to leadership conversation. That said I have a lot of respect for you guys. They have a lot of respect for us. We should talk. We should just see if there's something out there for us as part of the future. We're taking more creative ways to build relationships and learn a little bit more about companies than when things kind of come through a process where you've got a lot of third parties in between the two.

Yeah, you're eliminating the artificial urgency and.

Building the relationships and getting to know the culture. It would start to come through those conversations rather than third party discussions where they like to over manage the two parties on either side.

They keep it a little more natural.

And the culture comes through.

I got a question here. What's your go to model to assess culture in the acquired organization since there is so much due diligence before deciding on the deal With Synchrony's focus on culture fit, you mostly leave the culture of the acquired company untouched.

I don't think I characterize it as untouched. There's usually enough similarity that the assimilation is much more natural is what I think we've found. We will not touch business processes that are running great, particularly in businesses we don't do. But the culture piece and the connectivity and fitting those companies into important management discussions, how we integrate through a lot of our senior leadership meetings and those types of things would all still take place.

How about when we think about culture considerations? When you start factoring different industries or business types, do you have any views around how that may vary? I think with your business there's a lot of growth to happen post close. We're looking to really create a significant amount of value which is big emphasis on people working together where maybe some other industries thinking manufacturing and things of. Of that sort. It may not have those kind of factors. And I'm curious just to be a little bit open minded about the variance of culture considerations when thinking about different Types of businesses and industries.

I would say it's going to differ for different companies. Synchronies. We're not that large a company. We're only 17,000 employees, only 3,500 exempt employees. For us, we're going to be less apt to have something totally stand on its own own because we're just. It's just not who we are. I think if you're talking a large multi business corporation, I think if you're talking about large manufacturing organizations that have multi sites and you're adding different sites, allowing those to run independently or somewhat removed might be perfectly suitable to achieving the objectives. But given we're essentially a monoline business, we're consumer credit, we're credit cards and we're installment payments and that's it. Our bank is majority deposit based. We don't have checking products, we don't have retail banking branches. And so I think just given the nature that we are very much focused on one particular area within consumer finance, it would be a little harder for us to allow that standalone as part of our business model.

That makes a lot of sense. That's very true too. If you're running independent business lines, then they can stand on their own and look at very different.

That was the GE model we IPO'd from GE, right? It was former GE credit business business IPO'd six years ago. That was the GE M&A model buying very different standalone businesses that continued to stand alone and be hugely profitable in their own right. So it's something that the organization itself was familiar with, but not necessarily applicable to our business model, given our focus.

You also do venture deals. Can we contrast a little bit the difference between your approach with M and A versus Venture?

So I'm not sure the approach is all that different. We stood up the ventures team about 3 1/2 years ago, proud to say 12 investments today 6 are with diverse founders. And we just announced to the marketplace a $15 million investment into diverse funds. So I've never invested in funds before. I always did direct investments into companies. As we looked at DEI as it relate to the venture community, which is very homogeneous, we felt that the best way to support that ecosystem from a diverse standpoint was to target diverse general partners who were committed to building funds that would invest in diverse founders. And so that's been our target. We're really excited. We're investing in four funds, three of which have been announced. Fourth will be announced shortly and very excited to move into the investment stage as three of them are closing their first Round their first capital raises and they'll start to move into investments. For us it's been great capabilities. Two of our 12 investments unicorns been like an unbelievable ride. We do not invest for financial reasons. We are not a financial investor, we're a strategic investor. So for us it's looking around corners and what's going on in the fintech community and consumer finance community of which there is so much going on and so much activity. But it's very similar values and we've just gotten tremendous results from those relationships and we've got quite a few that are very strong commercial relationships because there's such synergies in what they do and what we as a company need to do. And so the partnership play from investing and then looking to partner with these companies has played out very well and two of them did result in acquisitions. So there's a whole life cycle less.

About direct financial returns, but more about more around access to emerging technologies.

Yes. Two of our investments, very strong in fraud identification authentication of individuals and so are critical to our underwriting processes both in and of themselves in different ways are critical capabilities to us and that we definitely have benefited tremendously from small startups that have brought tremendous value to us. As we look to respond to an ever changing environment within consumer finance and digital overall has really changed the game in consumer finance in the last four to five years.

How have you changed the M and a strategy of synchrony to keep pace with companies external environment?

Our focus is very much on probably less traditional companies and much more within the fintech space. When I first arrived we were looking at companies that were much more akin to what we were doing. So more consolidation plays. I think what you see us moving towards are much more adjacencies and capability plays. Although I can tell you sometimes the multiples give us heartburn and what those companies have an expectation from a price earnings ratio compared to where synchrony trades. So I've got some navigation I have to do there.

Sometimes that's tough and there's a lot of factors to blame for that too.

A lot of factors, yeah.

What's the most difficult part of integration?

To me the most difficult part is as you start to look at over time, there's always initially bringing everything together. We're really good at the technology piece and the HR piece and we get accolades for bringing people onto our systems very quickly and everyone gets paid immediately and all those things are great. I think the important pieces that you've got to always work at are the people part of it to make sure the folks are being integrated into the organization in the right way and feeling part of the family and contributing to the family. It's important to stay true to the synergies that you are looking to originally do this deal and to hold all of ourselves accountable around that and being laser focused around achieving those and pivoting where you have to. Because it doesn't always play out how you thought it was going to play out during the diligence process or even soon after the close. Markets change, distribution networks differ, product capabilities take longer from an integration standpoint than you anticipated. And so you've got to be flexible and agile to build in the changes you need to do because you couldn't predict everything and you didn't see all aspects of it. Irrespective of how greater diligence might have been performed during the traditional process. To me there's the continued flexibility to make sure one year out, two years out, three years out, which is about as far out as we go at this point, given how young we are as a company, that you're continuing to achieve the growth objectives that you had set out to achieve as part of the original transaction.

One of the big challenges I hear with integration is stakeholder alignment and I'm just curious if you've got any secret sauce and how to make that work smoother.

We're big on communication and discussion, so there is never a deal being contemplated that the entire leadership team is not aware of. It doesn't matter how small it is. And quite honestly, there's nothing actually that our board's not aware of. Just that kind of transparency and communication across the organization. And what you find is people buy in because they're a part of it. So you end up creating ownership across the organization for the success of the opportunity because people felt like they had a seat at the table and were able to give their input and were able to ask questions and were able to question like why this deal and not that deal and why do you have these expectations and why can't we do this without this company and do we really need to make an acquisition to achieve what we're saying we'll achieve through this? When you open it up like that and that's the way the company operates, you just have a lot more buy in and ownership across the organization for the success of the opportunity and actually achieving the objectives you set out to do in our culture, that's very important and it's the way we're all incented to behave. And so the success Overall of synchrony is how rewarded as an organization as well. Once again kind of all pointing us toward the same set of objectives and how we're looking to achieve success and growth for the company.

With this increased transparency do you end up with more people needed for consensus? Let's make a hypothetical thing that we have a conflict around a decision for go to market. And I like the idea of keeping obviously 90% of company problems is related to communication. So we really keep this open communication. I'm just curious if that ends up adding more stakeholders and that just does it gets you a consensus faster or does it end up making the decision more complex? Or is there another approach you look at when it comes to a framework around decision making?

Decision making as it relates to the investment or the acquisition itself is a greater consensus level. So our management team are 12 execs plus our CEO awareness pre acquisition or agreeing to that deal that happens at the management committee level. We don't need 100% management to say yes but we need a majority to actually move forward with that acquisition. Post that the management team that's in charge of that integration and or in charge of that business or in charge of that product, they own decision rights. And so what I was describing Kissan was more leading up to that to say okay, we want this business, we want this product, we want this capability to be part of synchrony. That's where you've got the broader discussion deliberation agreement. Once we agree to take it on, if it's a particular product, it goes to the head of product. If it's in a particular business area, it goes to the head of that business. And so just like they're running other parts of their business, they would be running that business. As to the expectations around growth and investments and those types of things, it.

Goes back to the here's the synergy goals that we laid out for this deal as part of our deal thesis. Make the right decision to make sure that happens. When you mentioned agility, I think that's the big thing that companies are striving for. Anything that you found really works well.

Any techniques or approaches we totally restructured through Covid. So we were a heavy in person culture and we were a heavy meeting culture. Like multi hours of meetings.

Sounds familiar.

Over the course of a week and we've moved to a much more an agile operating structure where the management team gets together twice a week for 45 minutes and we do a round robin. And so if I'm contemplating a deal, if I'm in conversations with a deal, if there's interesting things that popped up about other people doing deals, that's the round robin that happens twice a week. And so we've moved to a much more agile and informative. You need to know these two things. I'm not asking for a decision. And so we also clearly articulate. This is just to inform. This is just to keep you guys posted on something happening. Versus I need you to discuss because I need your input in these various areas. Versus I need you to decide. And now we've cascaded that down to our teams. I do quick touch bases with my directs twice a week as well. And it's similar. These are the three things you guys need to know. These are things that are actually pending that we're going to actually have to decide and do things differently or now I need a call to action. Right. I need you actually to act on these. We've become much shorter, so you can't even make an hour meeting any longer on our calendar. So we've had. You're forced into 45 minute or 25 minute increments and they're much more decision oriented. Less pages, less PowerPoint with a reason for coming together. Or quick round robin and then we hang up. Like you don't. We don't have meetings for the sake of meetings. And so we've totally changed our decisioning to be a much more agile environment. And so it's also creating much more transparency because if I see something interesting in the market or we're pursuing a few things, it's like, hey guys, just want to make you aware there's these two opportunities or this partnership discussion that was an acquisition maybe in our minds at some point. Hey, we just reached out to the management team. We're having direct conversations. We'll let you know where it leads. Could lead to a partnership, could lead to an acquisition, could lead to just meeting some other great folks in our industry that we should be aware of. We're keeping each other much more informed on a much more informal basis.

Shorter purposeful meetings and almost like the standup style status updates.

It is. Yeah, exactly.

I got a couple of questions here. We'll try to get in before we wrap things up. How to keep the culture when we're a part of the acquired entity instead acquirer. In this case, it's really hard to raise the hand and just suggest some integration culture to avoid bad environment. And most part of the entity is just waiting for new rules instead of show proposal attitude. What do you recommend to acquired people in their culture.

I'd stress the communication. In our culture, you got to get out there and meet people and start to understand what makes the acquirer's organization tick. To me, meeting folks across the organization, getting involved even in ways that are maybe less business oriented. We're big on diversity, so we've got nine diversity networks. Everything from I lead our Native American network, women's network, veterans network, Just getting involved in different aspects, I think of the equipment acquirer's business, maybe non business related, will help you to at least understand and assimilate a bit. Understanding what they're about, knowing that you're also looking to keep certain things intact which made your own culture so special. And that was the reason the company was very interested in bringing you into their family. But I would put some onus on the acquired company to get to understand a little bit more about their acquirer which they probably wouldn't have had the opportunity to do through the process because I think it probably is more heavily skewed towards the acquirer understanding what they're buying, perhaps more so than the acquired company getting a full sense of the broader company that's doing the inquiry.

That's a really good perspective for the acquiring to understand the acquirer's culture better but then in turns allows them to understand their uniqueness as well and gets that good communication circling.

Right.

Have you had to deal with an early stage product acquisition from a very resource constrained company? Consider their product having few customers and weak compliance to be a market? If so, were you able to keep the product going and mature the product for primetime?

We're in the process of one of those now we purchase a company with multi products, one of which is very similar to what we do today. And so from a compliance standpoint and risk and regulatory standpoint, we know we're on track and comfortable with bringing that to market. A very interesting product area which was a large driver and a reason for the acquisition because we didn't think we could build this product. We are in test and learn mode to understand what processes we need in case from a bank regulatory standpoint. And so that will be a test and learn. And I think we always acknowledged it would be test and learn as we ensure we've got the right processes in place, that we've got the right distribution channels and those types of things. And so I think what we've chosen to do is we've kept them, they're on different paces, right. To actually achieve and quite honestly the synergy estimates that we laid out or projections we laid out actually reflected different timings across those products. So hopefully folks would think about it that way and not expect simultaneous growth projections across all if their organization wasn't ready from a regulatory risk standpoint to assume full growth on all products.

Well take a lot of notes so we can do another interview. A whole story of its own Trish, what's the craziest thing you've seen in M and A?

I'd say what's gone on this past year or even the last few months from the whole SPAC standpoint has taken us a little aback. There were quite a few things on our list going into Covid, some of which now have been very interested in pursuing spacious SPAC opportunities. And the valuations, I just have to tell you, some valuations on these things are like I can't write that check. Even though we might have the we might have the wherewithal to write that check. I just can't write that check. I just can't. The expectations of multiples against numbers in the future. It's a hard thing for someone who has an accounting finance degree, MBA in finance, to get their heads wrapped around. Maybe I'm dating myself, but I do think just the SPAC phenomenon, just some of the multiples that are going on out there are just going to have to find have to calm down a bit before we're fully ready to jump all into that.

The conventional valuation principles are all at the window. You better factor in some crypto economics.

I'm a little unsure what to do with all that, so we will sit and watch.

Hey Trish, thank you so much for your time. I enjoyed this interview and the lessons learned.

Thank you Kisana. I appreciated the invite and it was a lot of fun to be here.

So here's to the deal.

Thank you. Here's to the deal.

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