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[Edit Notes: Most acquisitions fail. In fact, more than half of them fail. Trouble with different company cultures, issues with integration and many other aspects could throw the companies off track. In this context, it’s nice to hear from someone who is going through the grind. In this post, the author Rohan Bhansali, is the CEO and Co-Founder of Gozoop, a digital marketing agency headquartered in Mumbai shares his experience.]
To enhance our Indian presence and diversify our revenue base, Gozoop acquired Red Digital in July 2013. The acquisition really put us in full gear. Our Indian presence expanded from Mumbai to a 5-city pan India presence. Our team size grew by 25%. Our domestic revenues doubled up. And challenges quadrupled.
It’s been a crazy ride absorbing a company with it’s own culture, processes and revenue model. But it’s been fun. And enriching.
We are 4 months into the acquisition now and have gone through a fair share of situations to share some of our key learning from this experience:
Create a Synergy Team
One of the first things we did is created a Synergy team whose sole responsibility was to make this synergy as smooth as possible. In hindsight this was one of the best decisions we made as it ensured that there was a team proactively thinking of the challenges that could arise and hence were better prepared to face them. The Synergy team met with each client of Red Digital and spent one-on-one quality time with employees in all 5 cities. After getting clarity on the pulse of things, the Synergy team created an effective process that eased in the Red Digital clients, teams and processes into ours.
Also, the Synergy team involved Gozoop team heads and other employees only where needed. This ensured that our current operations and executions were not much affected by the acquisition.
Protect your Culture; it’s a Non-negotiable
Each company has it’s own culture. An acquisition brings with it challenges in consolidating 2 teams. As an acquirer, there can be no compromise in protecting the culture of your company. Protect it like a fortress. It is a non negotiable.
There will be situations when it is easier to compromise on culture or values for short-term solutions. But a business success is a derivative of long-term sustainable solutions. Retain only those people and processes that compliment your culture.
Overtime and through open communication, Gozoop retained only those individuals that complimented its culture. Not that the employees who parted ways were any less competent than the ones who are a part of our team today. When compatibilities and working styles don’t match it is in the interest of both– the company and the individual –to part ways sooner rather than later.
Have Open, Honest & Constant Communications
I can’t overstate how important constant and honest communication is. It is natural for insecurities amongst the 2 teams to crop up. The target team is insecure about being part of a new company under a new management while the acquiring company’s team will be insecure about how their roles and responsibilities will be affected by this acquisition. The key is to control flying insecurities’ through honest and open dialogues.
We had a one-on-one conversation with each employee of Red Digital. We took them through as much detail as we could about our processes, rules, organization structure, etc.
With our own team, we made sure we control insecurities through individual and group conversations. They were made secure about their job and role and yet they were geared to be open to changes. The mature amongst our team absorbed this well.
Looking back, the time we spent on group and individual conversations is perhaps one of the best investments we made, to pull off a successful acquisition.
Leverage the exposure correctly
It is no secret than an acquisition if followed by great public exposure. Post the acquisition, Gozoop featured on various news channels, newspapers, magazines and online portals. These features garnered good attention from Brands, Investors, VCs, Agency Heads, etc. We also received a lot of job applications for digital marketers who wanted to be a part of Gozoop’s growth story. At one point, we were receiving up to 200 applications a day!
We leveraged these touch points to win bigger mandates, build a stronger team and create good relationships with the Investment Community. Admittedly, we weren’t initially prepared for the pace at which these interactions happened, but we adjusted well.
Remind yourself of your mission and vision constantly
Both pre and post acquisition are times of intense decision-making. You are going to be making critical decisions regarding clients, processes, employees, resource allocation, etc. everyday.
We were faced with some challenging questions: Would Delhi, Chennai and Bangalore be satellite offices or execution centers? How should we manage individuals that don’t seem to sync with our culture? How are we bringing in cost efficiencies? Where and how are we investing our cash flows?
The challenge is to take long-term decisions amidst the short-term duress. But it is must be done. Your mission statement is the guiding light that helps make long-term decisions. We constantly reminded ourselves of where we wanted to be in the long run and that gave us courage to make correct decisions in a timely manner.
An acquisition provides a fantastic learning experience. It’ll throw many difficult situations and questions your way but if you stick to your mission and values you will enjoy the rollercoaster and come out a better entrepreneur.