The Three C’s That Make or Break Your Next Acquisition

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.

Clarity of Expectations

Uncertainty can be an enemy to any high-performance team. From the minute you announce the acquisition, people are both sides of the aisle are starting to ask questions: what does this mean for me and will my job change? Who will I report to now, and what’s going to be different? Anxiety and speculation flourish when there are no clear answers to these questions. It doesn’t create patience, it shows people the exit. Your best people are also your most marketable people (you know it, and they know it) and they won’t wait long for clarity before they start exploring their own Plan B.

Communicate those expectations early and often. Be clear. What roles are going to stay, what’s going to change, and what might be eliminated? What do those first 90 days look like, how about that first year? How will we measure success? Face it, these aren’t easy conversations to have but they don’t get any easier by kicking the can down the road.

Candid Conversations

The third C is the one most people avoid at all costs. Having candid conversations requires courage and trust, and they often get postponed in the name of keeping things positive during the transition. But the difficult conversations that you avoid today have a way of becoming much larger problems, six or nine months from now.

So, what are the real concerns that both sides seem to have? Are there redundant roles that need to be addressed and how will we combine the cultural norms of both companies? Another best practice is to focus on assessing whether there are any customers at risk, and who owns those key relationships.

And while it can be difficult, bring these conversations into the open, and make sure you have the right people in the room. You don’t have to have all the answers. What you do need to have is a genuine willingness to engage with everybody in an honest, defenseless, and committed approach. And yes, this stuff is hard.

The financial side of an acquisition will always require your direct attention. But if the Three Cs aren’t on your integration checklist from day one, don’t be surprised when you look up two years later and realize that deal didn’t deliver what you expected.

The math was right. The people part just didn’t get the same level of care and attention. That’s where the real work is.

Mike Philie helps owners and CEOs in the Graphic communications industry validate what’s working, identify what needs to change, and create a practical path forward.

PhilieGroup | mphilie@philiegroup.com | Linkedin

The preceding content was provided by a contributor unaffiliated with Printing Impressions. The views expressed within may not directly reflect the thoughts or opinions of the staff of Printing Impressions. Artificial Intelligence may have been used in part to create or edit this content.