Leading Post-Acquisition

Problem

I was at a company that acquired over 20 companies where I was the lead on acquiring 5 different, smaller companies that were all integrated within my Payments Engineering org. In addition, at a small startup years ago, I led another strategic acquisition. Learning from my own experience -- doing things both right and wrong -- I am happy to share what it takes to make a successful acquisition of engineering orgs.

Actions taken

Partnership

To start, I like to think of acquisition, not as integration but partnership. To build a partnership, you have to build a relationship and strong empathy with people. That requires spending time with the team -- founders, technical co-founders, ICs -- and strengthening the relationship through formal and informal bonding. The process should be initiated months before the acquisition occurs because it takes time to build rapport with the team.

However, building a partnership goes beyond leaders and co-founders, and it should include every person on the team. You should look at every single person who would be acquired and learn who they are and what their strengths and areas of improvement are. Exchanging notes with their leaders to better understand their skill set and aspirations could also be helpful.

The same approach of building empathy and understanding should be applied to the systems and architecture. You should go deep looking at how they built the system, what their product development lifecycle looks like, what is their strategy and roadmap, etc. As you move forward integrating them, you want to be sure that you understand and can integrate seamlessly the product(s) they have been building.

Alignment

After profoundly understanding the system, people, and processes, you should be able to achieve an alignment on both strategic and tactical levels. The next step would be to put that partnership into a reality. For example, how do you allocate the acquired company to your own strategy and your own teams, how do you leverage the strength of their team members, how do you cross-pollinate their team with your organization, etc.

Unfortunately, most unsuccessful acquisitions follow a common scenario. A new organization is brought in, siloed and isolated, operating the same way as before the acquisition and often having its own culture that continues to flourish independently. Instead, you have to embed the new organization within your organization and across your teams. For example, if multiple leaders and ICs are coming in, you should distribute them mindfully rather than retain the exact composition of the incoming company -- there needs to be a strong allocation strategy. You can give senior leaders ownership of large, complex areas based on their strengths and affinities and make them well-situated within the new company. In a nutshell, take the company for who they are and what they built but position them for new ownership. That not only creates a great onboarding experience but helps empower the acquired team(s) for outsized impact. The outcome is truly achieving 1 + 1 = 3.

Lessons learned

• The acquisition is a partnership, not merely an integration.
• Every acquisition is different since every acquired company is different. Don’t use a cookie-cutter approach. Instead, brainstorm different options, bring those options to the leaders of the acquired company, and make that be a subject of discussion. The partnership should be founded on an open conversation about different approaches and strategies.
• Don’t create siloes or isolate new teams or a company. The critical value of any acquisition is to complement strengths.