Your Company Has Been Acquired. Now What?
I have been on both the acquirer and acquired sides, and both are hard work. Both sides can win, but rarely is that the case.
If you are going through an acquisition or the company you own or lead in is being acquired, you must be as prepared as possible as you will be going through huge change and those unprepared can struggle with the shifting environment, reporting into a new set of management (leadership teams are often hit hardest and feel it quickest).
There are many variations of sales; full acquisition vs majority stake vs acqui-hire vs asset sale, I am going to concentrate on full acquisitions, but acqui-hires and majority stake also apply. I have a dedicated section on PE acquisitions towards the end, but the majority of the first section also applies.
Acquired By Another Company
There will be change; in people, in process and in performance.
People: often you will see a number of “OGs” long servers leave your business and if you are honest, it provides Department leaders a chance to hire for the future and often level up.
The processes might change, on three occasions of acquisition teams were told that processes might change slowly, but culture shocks starts in the smallest of things and happen quickly, with small changes impacting most people in a larger way than you could imagine.
Be aware quickly if the company acquiring yours is a company who acquire to grow or diversify, if you are one of many acquisitions, you will be folded into their business, and you will take on their tools, their processes and their way of doing everything; however small or large you think it is, it will be amended. In addition to my experiences, I have spoken to over 25 companies in acquisition processes or been acquired and it's ultimately a formality.
Protect What You Have
Create a pragmatic list of levers you and your local leadership can influence and save your teams pain, look at reporting lines, local brand usage, local decisions and rights, create a must keep list of retained tools and your tech stack for 12-18 months. This seems trivial, but will save you hours of meetings, negotiations and cost savings.
Change Management
Very rarely will you be asked what the acquirer should be learning from your company. You can be proactive and make recommendations, but do not expect a larger business to implement change or make it quickly.
Some acquirers can take on elements of culture from teams (it is super rare). In one company, I was part of the acquisition team, and the one specific company had the best culture I have seen. They treated their colleagues like partners, they ate together, drank tea/coffee at set times and had a togetherness I have not experienced before or since. Dinners were fun and relaxed. There were core elements we borrowed and ensured we learnt from, did we roll out to the same level, no, but it is a lesson I’ve taken forward in each role since.
It’s possible that what your great looks like will only reach their level as “good” as performance is likely purely numerical. You will have to adapt how you think and become accustomed to more and good sometimes isn’t good enough.
Rebrand! There will be synergies that were discussed and a roadmap associated, from experiences this is always influenced more quickly, it includes aggressive cross-selling, branding and co-branding changes, expect a push for co-company growth. Often you will be recommended to take a Sales lead or senior Marketer to join you. All of these changes will change your headcount requirements and prioritise this over other higher-prioritised projects.
Feedback Highs & Lows: Many are surprised by their performance reviews, whether quarterly or annual, there are often surprises - elements that are kept and stored for long periods of time. This is poor management but fairly routine in larger orgs with stretched management.
There will be times where there is no feedback and insights, often 1-2-1 and check-ins are status updates. Remember whatever level you are and whatever title you hold you are a leader within the business and you can reduce the feedback loops down.
Integrations
You will have a roadmap to start integrating technologies. This is often a dedicated workstream and will hinder growth, it will take away devs and ENGG from their agreed roadmap and frequently takes longer and requires a new style of leadership and project management. Expect your leadership team to be consumed by this project way more than you would think.
Act Differently
If you are joining a listed company (on the stock market) you will need to understand what this means, how different this makes your role and how the company will protect the company. You will be kept to this new standard and anything that could be deemed to damage your or their reputation it becomes a very different style of problem.
Learn how listed companies operate, what the rules are within this business you are joining and what the varying salary bands, caps, options and shares mean to you.
If you are a founder or chosen spokesperson you may have to go through their corporate media training programme or get used to being less open and transparent in interviews, this will go against what made you successful - many end up stumbling themselves into a crisis by oversharing.
If you speak at conferences, you have a newsletter or podcast (or team members do) there will be times and expectations for these to be cleared, disclaimers and risk warnings added and challenges to your editorial control.
Performance Peaks & Troughs
You likely have one quarter of leeway; it's rare that many get any more.
The performance will seem like a rollercoaster, you will have a set of new bosses, they have demands for growth and you will have to go from challenging each other at the leadership team level (and your connected teams) to being able to challenge yourself to hit a differing set of expectations and the way you explain performance shifts to new leaders will be a inner contest. You have to be clear, show a plan and be confidently cautious or cautiously confident in improvements.
Performance matters most - the company numbers and performance always mattered, but now performance is the only signal; most else is noise.
Become an expert communicator quickly, the demand for efficient comms is critical. Learn to write well, think in exec summaries and teaching your team to condense down updates and use appendixes and supporting documents to speed up feedback and reduce cognitive load for others - the more cognitive load to give the more you are judged. Luckily now you have an array of AI tools that can create summaries, imagery and videos from your content, these will help you greatly. If you struggle to communicate in person or on your feet, now is the time to get much better at verbal comms, create supporting slides and imagery to explain the technical or the complicated.
Hint: Tables win, everyone understands a formatted table, add graphs if you need to demonstrate something, long docs and decks require a lot of time (that most of your new bosses don’t have and won’t make time for).
Be curious of the wider business performance and how they are performing, if listed ask for numbers, reports etc. Listen to the earnings call, learn from the language and direction they present and continuously be curious about how your company makes any sort of impact. Connect with colleagues who can help you here; asking too many questions can be a red flag.
Get into the habit of forecasting and reforecasting, and sign-off periods become longer and more demanding. In most cases, sign-off takes a lot longer than you would expect, and you should plan to be in planning cycles and forecasting for at least two weeks each quarter.
Political Battles
You are about to enter a whole new set of political battles, a new way of political movements and a system you have to learn. You will see a new side to your colleagues, a series of angles people will make, and if you are switched on - you will learn the hard way your peers have a new agenda. Go in eyes open and expect a shift
I have seen firsthand sets of leadership teams on earn-outs act completely differently and point fingers at their leadership team colleagues. As a part of the new leadership, you have new people to impress, you have new targets and performance targets and pressure from above that feels different to when you ultimately reported to the CEO/founder or someone else in the C-Suite.
You will likely enter a new cycle of planning, a replica of the acquirer, most often away for days to weeks, with a new set of goals and outcomes. Most companies send their trainer, and often its the same training everyone gets and rarely ever tailored to your business.
Expect additional budget requests and headcount requests to be reviewed and re-reviewed and often declined. Unless performance is skyrocketing its rare you will pitch a business case and it receives approval.
Protect
There are two core areas of your business you have to keep an eye on and help nurture the teams through; There will be slower Product deployments, especially once integration and compliance are rolled into the roadmap, I was extremely strategic and had to push ridicolously hard in one of the acqusitions I was part of and built out a Growth department as I knew the requirements to build Product features, experiments and bug fix were paramount for Growth and hitting new targets and the Marketing department needed to Market initiation while operational effeceinces were the previous priorities.
The second is the speed in which Marketing can slow, from campaign slow downs to experiments, Marketing can slow as it can be impacted by (i) new set of approved tools, (ii) any large changes may have to be approved (iii) Marketing can be one of the first departments to be rolled into and report into a COE (centre of excellence). Speed of delivery, speed of experimentation and keeping a culture of excellent and agile Marketing is critical and if you don’t feel like you have these, you may just have a new speed limit…
Your Team Managers Hardest Hit
C-Suite -1 (VP’s, Directors, Heads of) are often the hardest hit but don’t feel the impact as much as they should until six to nine months in, they will have to come to terms with being part of a different business, be asked to remove headcount for operational efficiencies and be - your job as their manager is to protect, guide and inform them of what is happening and explain movements you just about understand, often misaligning with the decision.
Non-High-Performers will be highlighted in restructures, and even if you believe they are high-potential employees, these two groups will be earmarked to move on or be pushed harder. You will want to remove the demand for numerous or annual 9 box exercises, you will feel this pressure early and often. I highly recommend you proactively manage this situation and work on your communication skills throughout this period. Liaise with HR and ensure the processes are done right. Protect you, your team members and the company.
Your job can become easier, or it can become harder, it's how you are set up to succeed and if you can adjust quickly to the new environment and drive your department's shift to the where the company is going. Few C-Suite leaders thrive in this new world, you have to prepare yourself, your managers and team members for this shift. Your management team will likely need more help and support from you - 1-2-1s are critical in the first year.
Culture shocks will happen and waves of sub-culture shocks will hit and to some it hits hard.
I highly recommend keeping a timeline, you will potentially see change within the first 10 days, then within a quarter and then in six months.
Grief: You will see many struggle with grief (leadership peers struggle with a loss of the company, their identity and their old old), you will see a shift in loyalty especially within team members - often number 2’s become political or try to gain face time with new management (that’s fine but many become politically motivated, keep an eye on your leadership peers).
Something that isn’t talked about enough is “Identity whiplash” - many team members will question their roles, their identity and their place within the new company. You will see one to two team members leave, some of the best team members will look for a new role quickly. Many people I talked to post acquisitions suggest there is an unofficial moment in their career where they have a shock to their system and feel they need to leave. In one of the acquisitions, the leadership team dramatically changed within the first 30 days, which hit their directs and there was a split between those who wanted the leadership role and others who wanted to move on.
A few suggestions suggest what leaders should do in the first 90 days, keep 1-2-1’s have open and transparent conversations (as much as you can), create slots in your calendar for listening tours, offer more office hours, one area I know worked in a handful of businesses were transparent FAQs - this works for the local team, be mindful what you share will be open and seen and potentially judged by acquirers. If your acquirer (acquiring team) is hands-off and there is a significant change, you will want to consider how you introduce the team and explain what they do and when you will see and hear from them. Too often, you will hear from them in bad moments, when something bad has happened or when a leadership team member moves on.
Deliver “Bosses” Decisions:
There will be decisions made that are above you, you have zero input in and are expected to deliver.
Product, Marketing and Tech are often impacted first; Finance teams and Sales teams are the next round who are impacted. You have to voice concerns and play politically; there are only a few fights you can have before you are seen as a potential troublemaker or “not part of the team”
You likely will be told to do things that make no sense in your business; the context is usually not there for new owners, or they have a completely different understanding of your business and your industry. There are numerous examples of when international leads tell you to copy a competitor, to reduce spend, to stop work on roadmaps or move budget when there is little to no understanding of the business.
I struggled in delivering decisions that were made “above me”. It wasn’t how we got to be successful and acquired, I also have been on the other end and quick decisions have to be made, they are doing whats best for the company (that isn’t always felt). If you can think and shape first, second and third order effects and want to challenge you can, however, be careful in the message it can send. Only in three businesses have I seen the C-Suite of an acquired company become important figures, two were down to personality and expertise and one was down to relentlessness and not taking no for an answer which in other places meant they left the business much earlier.
Remember: It’s not your company anymore, it is someone elses, you will hear founders and execs say it’s like your kid going off to uni, for most it’s more like a divorce..
Leadership Hires & Evolution
Expect a new member to join your leadership team, you may be part of the interview process, you might have a thumbs up or thumbs down but most insert “their people” quickly. Expect dynamics to change quickly.
Resume hires happen around you, often resume hires (those with big logos and big names) are hired to change the shape of your leadership team, to give themselves status. Great people will be great additions if they take on the culture and subculture however, they are not incentivised to do so.
Resume hires often do not work out over a year.
Your leadership team/ELT might become a SLT (senior leadership team) and you will likely have to adapt your leadership team to a new way of operating, this is slow but ramps pretty quickly and often there is paranoia from the boss or new set of bosses about how you operate and how you lead your leadership team.
You have to plan for and expect a big change in leadership, whether that's the CEO or one to two C-Suite leaders who will leave or be manoeuvred out of the business.
Get To Know Your Bosses
Get to know the new boss or bosses you will report to, or have a new series of skip management that will be new, challenging and a big learning curve. Reputation, influence and status is rarely ported over to this new boss and any negative experiences
Promotion Vs Demotions
You ultimately received a demotion (yes, a demotion - you are now a manager in an extended matrix), despite what many believe, you are being moved into a larger organisation and unless they have offered you a new role with a new title and explained your journey, you will be reporting into more people and start from a few steps down the ladder. You have to start looking at what you do as part of a bigger business. There were a couple of times in my career where you are told by people who are more junior than you and have no experience you are doing your job wrong or you need to change to the way of doing it, despite the acquirer spending millions or hundreds of millions on your successful business.
New Company Journey
The company has three stages (i) who you were, (ii) who you are, (iii) who and what you are going to be - almost all employees will work in who you were, they will struggle to get into phase 2 of who you are now and maybe one or two of the leadership team will be onboard and appreciate who and what you are going to be. The hard truth is, even if you are supposed to be left alone and operate independently, you rarely will be given the chance to and there will be constant change.
Leaders Lead
Leaders have to lead, it is rarely called out in acquisitions that your leadership will have to change, you will be guiding the business forward, especially in new hard and challenging times, from the shift in culture, the shift in demands to deliver and lead when you completely disagree with decisions that were made at the executive or partner level and you have to drive the change forward.
Some of the best decisions we made as leadership teams to reduce stress and anxiety were:
Weekly stand-ups with open floor Q&A - some will attend and it worked better in person. Now I would recommend a stand up with async document that you can AI tools like Granola or Google Meet notes to record and help to keep track and a usable knowledge centre.
Regular performance updates (away from reporting cycles - you want to add insights, analysis and character to updates) - Loom recordings will likely be something people are looking for
Leadership stand-ups and sit-downs (end-of-week catch-ups), the local team would check in and check out each week, with updates, temperature checks and honest feedback. This built more trust and something that did drop by the way side the more mature and the more changes happened.
Integration updates - this can sound powerful but if you can condense down and offer real insight and reduce the ripples, it will be something that can feel tangible over time.
PE Acquisitions
PE acquisitions drive similar changes, but there are a number of elements that ramp up
Growth is business critical; get this into the business from day 1
Your brand will be part of bigger collective of brand, not always connected but it's important to understand you will be connected with the PE and within how they communicate
You will need to build relationships with the team members and leadership at the PE - you have to be political.
“Expert” and well-known industry advisors will be made available, they are squeezed on time and often will want to help but are time poor, expect some assistance and top-level recommendations and a handful of bespoke resources
Their partner recommendations will be strongly advised, they often work with the same handful of partners and work across their portfolio, it is your choice if you want to take anything forward, weak CEOs and founders say yes and end up spending tens of thousands that might not help you move forward
Get to unit economics quickly, expect media mix modelling (MMM) to be rolled out
Money & Incentives You Should Research
There are two core areas you will want to research:
For incentives like RSUs, options, roll-overs, grants, vesting cliffs, taxes and bonuses, I recommend you run your own specific research. These are often so specific to your role, tenure, my experience will be very different.
There will likely be variable comp changes, from new bonus schemes, salary bands, SPIFFs and quota setting. Definitely do your own research and watch out for these changes and a change of contract; some enforce an updated contract, others will keep you on a local contract.
Good Luck!
There are probably numerous areas which are more specific to your industry or unique set up of your business that I have missed, it is essential to do your research (you have deep research in AI products that will help you learn alot about your acquirer) and build the bridge from old to new, remember you have to put your own oxygen mask on first and prepare yourself for the new world.
Best of luck in your new situation, and drop me an email (coach@dannydenhard.com) if you’d like to chat.
