Acquisitions aren’t easy, but they don’t have to be miserable. Here’s a guide for anyone at a company being acquired (most applies to acquirers as well).
Last week James Home and Marcy Swenson hosted a core conversation at SXSW on How to Be Acquired and Stay Happy. Wonderful smart people generously participated, sharing their experiences of what worked and didn’t in both sides of dozens of acquisitions of tech startups. (In a future post, we’ll summarize the unique issues for founders and the executive team leading up to acquisition.) With the market shift in startup exits from IPOs to acquisitions, learning to do it well and happily is important to anyone at a startup.
Interestingly, the entire conversation focused not on business integration or strategy but on human integration. We think the strategy may be less important than the people and how they run with it.
Here are the six keys…
1. If it’s not already obvious, figure out *why* your company has been acquired. A surprising number of people said it was never clear why they were acquired, and that not knowing was a huge drain on the team’s motivation. If you were acquired for your product, how does it fit into the acquiring company’s strategy? How will it be integrated? If you were acquired for talent, how will your team be integrated into the existing workforce? Are you expected to be disruptive? If so, how will you share what you know and make friends, rather than enemies? (Sometimes an acquisition is declared to be the new shiny thing, creating animosity without ever intending to; sometimes the new team is completely ignored.) Knowing how you fit into the acquiring company’s overall strategy is key to understanding what is needed of you and how to contribute.
2. Expect to go through the 5 stages of grief: denial, anger, bargaining, depression, & acceptance. Everyone is affected by an acquisition in their own way, but it’s a process, rather than a moment in time. Your company will not be exactly the same as it was before, and most people are uncomfortable with unexpected change. The announcement of it is just the beginning. Make space for people in your group to talk about how they feel as they go through the process. Many people are afraid of revealing that they have any concerns, lest they “poison” the rest of the team. Talk about what’s going well and what’s challenging for you, but frame it as a normal part of the process, and make it OK for others to talk about their concerns. Pretending it’s all unicorns & rainbows feels creepy, but you also don’t want to complain constantly. Vent from time to time, use the resulting information to solve problems, and then get back to work. The more you allow yourself to have your own experience (and others to have theirs), the sooner you’ll naturally move through to the acceptance that leads to happiness.
3. Resolve mysteries as soon as possible. Every acquisition comes with its fair share of unknowns. People will wonder everything from “who will drive the roadmap for our product” to “will the company still send me to that conference next month” to “will we be still able to have beer at our Friday retrospectives?” The more that everyone can listen for mysteries and resolve them quickly, the more that people begin settle down and feel at ease.
4. Give yourself some elbow room to maneuver. Sudden changes in management often make incredibly competent people shy about making decisions. If you were acquired, it’s because someone thinks you and your company is awesome. There is no reason to suddenly question all of your decisions, assume that things you are doing are fine unless you hear otherwise. By continuing to act with confidence, you show your team that things are OK, and gain the trust of the acquiring team.
5. Clarify how the power structure has changed. Often acquisitions leave things murky about who’s in charge of what. If you’re not sure, ask, even if it feels uncomfortable. If you don’t hear, assume it’s the same for now. Even if it’s not the answer you were hoping for, it’s better to know than to wonder. This question almost ALWAYS goes unasked, and unanswered, at every level, leaving everyone maneuvering in the dark.
5. Seek out opportunities. Folks who jump in early, forge relationships, and find synergies will have an easier time, learn more from the situation, and have more opportunities within the larger organization. Often you’ll gain access to new resources, like training & coaching. Some acquisitions are a horrible match, and if that’s true for yours, it’ll become completely obvious, at which point you can leave. On the other hand, there is no penalty for earnestly trying to make it work; you’ll just have twice as many people to write you great recommendations on LinkedIn. Plus, you just might help make it a success.
6. Focus primarily on what’s working. Neurobiology tells us that our brains evolved such that negative experiences are 5 times more sticky than positive experiences. So if the acquiring company screws something up, everyone will be far more likely to focus on the screw-up than on what they did right. It’s fine to notice what isn’t working (especially if you have the ability to help fix it), but even more valuable is to orient yourself toward noticing good experiences. Focusing on what feels good is a habit of mind that happy people have mastered, and it dramatically increases your chances of success in business and in life. So focus on what you do have control over and what you can contribute. Notice what others are doing well. (For more information about extremely happy people, check out How to Be Happy and Awakening Joy, both terrific books at the leading edge of the positive psychology movement.) One great tactic I’ve been putting into practice lately: when I notice something feels good, I spend 30 seconds basking in the positive experience, noticing how it feels in my body. It rewires your brain to orient toward what feels good, and creates a virtuous cycle. Anyone who’s been acquired will have a more pleasant experience by practicing the same.