While change is generally viewed as a good thing, it can also feel nerve-racking and scary, especially if it’s out of your control.
Over the last 5 years, we’ve acquired 40 companies, and worked with over 65 founders and 850 employees to communicate the news of an acquisition to a company’s customers and employees.
We sat down with Brad Bieber, VP of Sales at Homebot, and Melissa Seymour, VP of Customer Experience at Foothold Technology (now a part of Radicle Health) to talk about some of the common myths and misconceptions they faced going through the acquisition process.
Myth #1: The company will lose its identity.
Melissa: ASG went out of its way to understand our culture and to help us formalize and commit to how we were operating and wanted to continue to operate. While we had a sense of what we cared about and how we brought that to our work, none of that was actually codified. Now we have clear, concrete vision and value statements to guide all aspects of our operations, and we’ve rallied even further around key things that matter most to us.
Brad: “Do no harm.” At Homebot during the acquisition, we heard this phrase over and over again, and it was reinforced by the people at ASG through the roles they played during the transition. It’s awesome to see how ASG invests in certain roles that are designed to alleviate the “boogie-man” syndrome that comes with an acquisition. Most young folks at Homebot had never been through an acquisition, and the many that have, said it wasn’t a good experience. Having gone through an acquisition multiple times in my career, I can honestly say, this was the smoothest experience and onboarding process so far.
Myth #2: My role will completely change, and the dynamic with my team(s) will be negatively affected.
Melissa: From the start, ASG encouraged employee feedback and engagement in a way we’d never had before. Sure, we’d been free to bring up suggestions or concerns, but utilizing tools such as quarterly CultureAmp surveys were formalizing the feedback process in powerful ways, and making an impact at both the company and team levels. For example, as a manager, I now have more insights into how my team members feel about their work – where they are experiencing challenges and what they are celebrating – that I couldn’t get from 1:1 conversations or team meetings alone. It allows team leaders and executives to answer staff concerns and make positive changes to address them more meaningfully so that team members now feel heard in an entirely new way.
Brad Bieber: My role was only positively impacted. Some of the things most notable was that I was given an amazing business partner in Charlie Pratt, our CRO, I now had a voice into our C-suite, I had access to coaches and a community like the Growth Advisors that truly wanted to help. I didn’t see that anyone’s roles or responsibilities changed due to the acquisition of Homebot. In short, we were truly allowed to keep crushing it.
Myth #3: Everything will be about the bottom line & purse strings will become super tight.
Melissa: At the end of the day, dollars and cents do matter, just as they likely did to each company before an acquisition, but we’ve found that we’ve actually been able to make significant investments into the company since becoming a part of ASG – whether it’s in the form of adopting new tools to help us work more efficiently and effectively, or hiring new team members to improve our game more quickly than before. (The pace of play has vastly improved across the board!) We’ve also been able to expand via a tuck-in acquisition of our own, so we’re now a two-product company impacting the lives of a large number of users.
Brad: Private Equity (PE), VC and other investment firms exist to make money for their investors, that’s just a fact. However, what has been impressive to me about the ASG approach has been trying to strike the right balance between profit and revenue, versus the understanding that companies need to invest in R&D, hire the right talent and invest in retaining that talent. Homebot has seen significant investment in its product and its talent pool since the acquisition, and ASG has helped reinforce the importance of that continued investment. These actions have only encouraged us to continue doing what we have been doing: growing, winning, and being an awesome place to work.
Myth #4: The buyer will only see the value of the products/company, and not the value of the people.
Melissa: Our first real interactions with ASG were through the introduction of its PeopleFirst concepts, so this myth was squashed for us pretty quickly. If anything, we were required to come to the table with a much more open mind than we might otherwise have had because ASG’s approach (with things like “Passion and Purpose”) were so far out of the realm of how we’d done things before, so the “touchy-feely” nature of it was a bit disconcerting at first!
Another way the opposite of this showed up for us is that all of a sudden we started getting a lot more insight into the financials and behind-the-scenes of the business than we’d EVER gotten before. ASG encouraged a framework of involvement, engagement and information sharing that was new to us, and ultimately helped us as individuals to feel more connected to the day to day operations and decision-making.
Brad Bieber: This is an interesting myth. Most acquisitions are for the product, the customer base or simply a strategic move to out-muscle the competition. ASG spent time, effort and money on coming to see us, speak with us and become a part of the Homebot family. These actions went a long way for us at Homebot. We had only lost one employee after the acquisition, and that was because he got a once-in-a-lifetime job offer (and interestingly enough, he has come back to work for us recently). ASG’s approach and philosophy with Homebot and its people was a main driver in retaining all of us. “Retention bonuses” only go so far, people want to believe in the future, and ASG showed us that.
Myth #5: The relationships with the customers can take a negative turn
Melissa: At the end of the day, customers want to know that the same great quality of product(s) and service(s) they’ve come to expect will continue being provided. Just like trust has to be earned with employees, it also has to be earned with customers and that just takes time! Interestingly, we found that the customer buy-in time was less than the time with our team! As we continued to make changes and improvements after the acquisition, we made sure to communicate to our customers so that we could bring them along in our journey, give them the context to feel confident that things were going to move along smoothly if not better than before and provide communication around improvements that they could be excited about.
Brad: When our customers started to hear about the acquisition, there was the occasional, and expected, grumble of being acquired and backed. In my experience, our customers saw no impact to their experience, and continued to receive outsized value from Homebot and its employees. They continued to receive the industry-leading support we are known for, and I suspect ASG’s approach was a contributor to not only keep-up, but accelerate our track-record.
Anything else you’d like to share?
Melissa: In almost every case we found that post-acquisition life was the opposite of the things we feared. We found that ASG operated with a “first, do no harm” mentality. They definitely helped identify things we could be doing better to help us grow and evolve, but they didn’t change things for the sake of change and brought the team along for the ride. In other words, there was always context and education along the way so by the time changes were made, we understood the importance of them and were supportive, rather than feeling we were being left out and ordered around.
If there was one thing I’d suggest emphasizing as a takeaway (besides the fears being greater than the reality), it would be about the importance of communication – the open and honest sharing of information from the leadership side, while asking thoughtful questions from the team side rather than connecting dots on your own (which more often than not leads to an inaccurate picture). And this carries into the customer myths as well!