Congratulations. You’ve run all the numbers a dozen ways and negotiated a fair price and structured the deal that works for both sides. You’ve done the heavy lifting on this deal, and the attorneys have already been looking for their fees. So, what’s missing, and why do so many acquisitions risk falling apart after the ink dries.
My experience has been that there’s a vast amount of time spent on getting the deal to the table, and not nearly enough time on what happens the day after the checks have been written.
In the printing industry, growth by acquisition has always been an attractive option. Especially these days when organic growth can feel like pushing a rope. But getting the deal done and integrating two companies are two vastly different disciplines. The financial mechanics of the transaction get a great deal of attention. The human mechanics of it, not so much. And from what I’ve seen, that’s where the deals quietly fall apart.
After advising printing company owners about the strategic fit on a number of transactions, I keep coming back to the same three things that separate successful integrations from disappointing ones. I call them the Three C’s: Culture, Clarity of expectations, and Candid conversations.
Culture
Because it doesn’t appear on the balance sheet, culture gets little attention during the due diligence phase. But from what I see, it might be the single most important factor in determining whether the people you just acquired will stay, be engaged, and perform – or quietly disengage and eventually continue their careers elsewhere.
Face it, every company has a culture. Whether you’ve intentionally built it, or it simply evolved over time, it’s present. I hear leaders talk all the time about the strength of their people being a major competitive advantage in all that they do. That’s great. Well, when you acquire a business, you’re not just buying equipment, customers and revenue, you’re acquiring the habits, values, norms and unwritten rules that govern how people work every day. The question isn’t whether your culture and theirs are different, face it, they are. The bigger question is whether you’re willing to acknowledge that and actually do something to better align and improve the situation.
Read this full article on Printing Impressions, a publication of PRINTING United Alliance, ASI’s strategic partner.
