Acquisitions on the Brain?

Mergers-and-Acquisitions-Insurance-1011Often with acquisitions, some of the most important considerations happen before and after the deal.  To get an inside take from someone who has years of M&A experience, we sat down with Dennis Ensing, CEO of TransGaming and AceTech Ontario CEO member.  Dennis took us through some key aspects of an acquisition process that can either help or hinder the transaction.

Before Negotiation:

Everyone knows there’s two types of acquisitions, there’s the ones you seek, and there’s the opportunistic acquisitions that fall in a CEO’s lap. As great as the latter are, Dennis feels that as a CEO of a growing technology company, you should always be seeking out targets for acquisitions and have a process in place to do so.  With that being said, there’s some considerations to be made once one of those leads takes fruition.  To a large extent, the M&A process is not core to the business you are running, so they can often be a distraction.  So once you’ve got an acquisition on your plate, something else tends to fall off, “if you’ve got one eye on the business and one eye on an acquisition, then what about financing, what about planning for the exit, what about my family at home?”, says Dennis.  To make sure nothing falls through the cracks, many companies will hire an investment bank to be the front end of the transaction process.  For those who don’t, it’s critical to have someone by your side who’s running point on those areas that you know are going to suffer during the acquisition process (except probably for your family!).  “If I’m running the acquisition process and moving forward with a transaction, the core business better not suffer”, says Dennis, “and I need to know that I’ve got a right hand person who’s pushing that forward towards the objectives that we set and achieving the milestones that we need to so that my ‘distraction’ isn’t affecting them.”

Since an acquisition can take 4-6 or even 8 months before completion (after being identified), it is critical that before you start you have a process in place for what those next months are going to look like and who is accountable for what.  If not, it can take on a life of its own and can end up taking 9-12 months, or even 18.  During Dennis’ investment banking days, he became increasingly frustrated that there was no general overview in place of what the process looks like.  As such he created his own.

Click here for Dennis’ acquisition process & timeline.

After the Transaction:

Have you acquired a company? Congratulations! But there’s a couple things to remember once the deal is done, “If you don’t plan for integration before the closing, you can end up with a real mess”, says Dennis.  Acquisitions take a team, and that team can fluctuate through the process, but it’s important that you’re bringing your key business leaders in at the appropriate times so they can plan before closing and take ownership of the integration.  Part of the integration process includes culture.  After the dust settled with TransGaming’s 2012 acquisition of Oberon Media, they started to make integration related changes, and the top of that list was managing the cultural fit between the two businesses, “Culture trumps everything. People can sit there with the spreadsheet and say ‘oh, that’s what the integration will look like’”, explains Dennis, “but if you can’t marry the cultures, it’s never going to work”.

 

Advertisements

How to Keep your Teams Innovative

ping pongEver find that in today’s world, where information is at the tips of your fingers, there is no such thing as a new idea, only adaptations?

Well, if that’s true, how are we supposed to keep our teams innovative and our companies fresh?

As it turns our, keeping a bit of a start up mentality could be the trick.

EventMobi is an event technology platform that helps all varieties of event planners be successful.  Bob & Bijan Vaez, EventMobi’s Co-Founders started the company in 2009 and since then it has grown exponentially and has continued to stay top of it’s game.

Bijan, who is also the CTO of EventMobi and heads the engineering, product and design teams, gave AceTech Ontario a little insight as to how they continue to stay innovative.

One of the key pieces is how you identify responsibilities. “You need to create very loose boundaries where people are comfortable flexing in and out. You do not want to create a rigid box for employees where if they need to step outside of it, they pass the buck and say ‘sorry, this is not my responsibility’,” says Bijan, “but if you create it too soft, they never really know what their job is”. Improperly clarifying responsibilities also becomes a problem for performance discussions when employees do not know what their job functions are day to day.

One way EventMobi enables this, is by setting up a team structure as mini-startups within the department. Each team is setup with the resources of a small start. A dedicated product manager (think mini CEO), designer, tech lead (mini CTO) & 3-5 crossfunctional engineers. The idea behind this is that in start ups, everyone has their expertise, but no one in a start up says “these are my boundaries of what I do and these are the only things I do”. The mission is clear in a small team, they have accountability to each other, they are autonomous and they can choose the best processes for them to move fast & be as innovative as they can be. “We try to create the groups as small as we can so that they can all feel like part of the team and they all know what their mission is,” says Bijan, “they all bring their expertise together and do the work together.  It has given them a lot of experience and exposure outside of what they normally would do day to day and they really thrive in that environment.”

Another way EventMobi feeds their innovation cycle is by letting their employee’s passions be their driving force for work. To avoid keeping people in a box and keeping that start up mentality, EventMobi has established functional groups outside of their normally cross-functional teams, focused around major areas of innovation (i.e. design thinking, devops, javascript architecture, etc), known as “Chapters”.  They are monthly or bi-weekly meetings & workshops attended by at least one person from each team, and led by the most passionate employees in that subject matter. These are individuals that have such deep passion around the subject matter where they will be spending time continuously learning and pursuing this knowledge outside of work hours for their own personal enjoyment. EventMobi nurtures the drive of these employees into innovation by appointing these individuals as Chapter Leads. These completely functional and likely not work related discussions facilitate knowledge sharing, excitement around innovation, and allows for a centralized way to push innovation into many teams. Each team member is able to go back to their team and apply the ideas brought forth in these meetings, and utilize the help of the Chapter Lead if needed to better deploy these ideas & practices. “Even though everyone is working on their day to day”, says Bijan, “Now we are getting a slew of new innovative ideas around new technology, new tools, new way of thinking about things and challenging the status quo continuously. Best of all we’re not trying to force this and using our employees passions to drive that.”

Lastly, we all know start ups have certain cultural traditions. As companies grow, some of the traditions are not kept, but a Ping-Pong or foosball table, for example, usually sticks around unused for symbolic reasons. At EventMobi, a focus is put on the culture of allowing employees to creatively go about their problem solving. You will often find Ping-Pong, lego or video game rooms being used as a way to conduct informal 1-on-1s or as a way for team members to share and talk through ideas. They have found this is a great way for employees to keep their creative juices flowing and work through any roadblocks, “I’ve seen two engineers sit there and chat through a problem while killing zombies,” laughs Bijan.

So, if you are struggling to keep your employees innovative with your technology, try revisiting your start up roots.  It could be the answer you are looking for.

The Fruit Will Come Naturally

JGBlock-RootofSuccessThere are two components to corporate culture; the fruit and the root of a tree.  Travis Dutka, Culture Curator at 360insights, has developed this analogy to help explain and better understand the different aspects of corporate culture.

“The fruit is the part that everybody thinks they want. It’s the expression of culture, it’s the beer kegs, the Ping-Pong table, the popcorn, the after work socials. It’s the events, the shiny things,” explains Travis, “but the real roots of culture are the way things are done, not the things themselves. Often much more intangible things like, ‘what are your communication habits’, ‘do you have high levels of trust’, ‘is there passion and drive, in your teams’ or the sense of accountability”.  They are things that are not as sexy and are much harder to measure and quantify”.

Travis has found that many companies, in an attempt to develop their corporate culture, will add a “party planner” type role to their company.  However, if you do not have the roots to support this, it will not last over a long period of time and will not be able to weather the storms.  “What a lot of companies do when they want to build a great culture or want to fix something that needs a little TLC”, says Travis, “is they try to put fruit on the tree that does not exist there or it isn’t native to that tree, or worse, they have fruit that’s really rotting so they paint it!”

In other words, if you decide to get a beer keg for your team, but no one really drinks beer, they will not appreciate it.  Or if you create a mandatory bowling event when people on your team are not getting along, you will be resented for it. “If you’re only nurturing the fruit, eventually the tree will be top heavy and fall. The fruit won’t taste good and your team will resent it.”, explains Travis, “whereas if you focus on the roots, the fruit comes a lot more naturally and it becomes a lot juicier”. In addition, the fruit will even become employee initiated.

One of the biggest pitfalls however, could be perception.  CEOs wear several different hats; they are often pulled into sales meetings, board meetings, operation meetings, etc.  Then all of a sudden, they find themselves having forgotten to tell their team that they have hired a new VP of Marketing or changed where an entire team sits. There is nothing wrong or bad with the action itself – that’s part of the job of senior leaders, however, the mixed signals happen when the company prides it self on transparency or communication. Those examples erode trust even though there was nothing malicious about the actions themselves.  “A lot of companies, when they have an issue with culture, it is not because they lack intention or desire [on behalf of the leadership], it is because of the perception that is created because of specific actions or inaction”, says Travis.  “This happens all the time; it looks like someone is not living up to the company’s values, but it is actually just the way their communication style is received or genuine oversight. Because of the power of perception, especially in growing teams where there is more and more disconnection from the leadership team, it is so important to be intentional in the planning and delivery of how, what and when things are communicated to the team.

Focusing on building strong roots really helps to avoid the previously mentioned situations and keeps the focus on the important details. Building a great root system (company culture) takes work and pre-planning. “I’ve heard people say the best cultures are organic and they just happen”, says Travis, “and I think that is partially true.  With great cultures, the fruit will happen organically and naturally.  But taking care of the roots of culture is not by accident at all, it takes a lot of intentionality, especially in the tech/start up world because everyone is pulled in a ton of different directions”.

Travis was asked what his advice would be for companies forming their corporate culture. He said “clearly define what you want your culture to be.”  In other words, if you want your culture to be innovative, then the decisions you make should tie into that.  Even if there is an interruption like a paper plane throwing competition, your events should tie into your desired culture.  “Don’t party plan just for the sake of planning events and over scheduling”, says Travis, “a healthy tree will produce the fruit on its own and the farmer should not try to put fruit on the tree.  The farmer is only pruning the tree, cutting off the tree branches that aren’t doing well, picking a couple bad fruits, but for the most part the tree is doing it by itself.”