You acquired a new company -- now what?
6 February, 2019
If your company gets big enough, there are times when it decides to acquire complementary companies to continue its expansion. An organization I worked with went through 4 large acquisitions while I was there throughout my 7 year tenure.
As soon as the ink dries on the acquisition, the real work begins for the engineering leadership. Most acquisitions require founders and key employees to stay on for 18-24 months and the clock starts ticking right away. Here are a couple of things I did to manage the process effectively:
- Get an executive commitment on what success means for this acquisition. Getting agreement on how the organization and technology stack will look like in two years is important. Will the technology be integrated into your core platform? Will it operate with it's own P & L? What sort of requirements are needed for the two products to interact (e.g. one universal login, payments/billing platform)
- Immediately start building trust with the founders. No founder wants his/her baby to die at the hands of an acquirer but many don't want to remain past their lockup period. Have frank conversations, understand what concerns they currently have, who are their critical talent, and what their current roadmap looks like. Usually, that first few months there is flurry of activity and building trust and a good partnership helps. I would rather know 6 months or longer before they leave and that requires a lot of trust
- Spend a lot of time with the acquired team to get to know them over the first few months. Before changing their processes to match your own, see how they operate and what is working and what is not. Get to know the people there, who's critical, who has potential to grow, and who might be underperforming. Learn their tech stack and their development process before radical changes.
- Within a few months, start developing new leadership talent to have a plan for when the founders leave. Encourage someone from your team to move or have someone on their team be part of your core leadership group.
- Visit frequently and have a flexible schedule. Most acquired companies feel like they've been conquered and that they are an adopted step-child. Get to know the people there and make them feel part of the greater whole.
- Encourage cross team communication. If appropriate, have some engineers from the acquired company join other teams or vice versa. Encourage people to work across the divide even if it's hackathons, tech talks, or other social actions. Be inclusive in organizational meetings and make them feel part of the broader team. If they are in a different geo or office, find ways for the org to interact
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