Acquisitions are often celebrated with pomp and circumstance, but the truth is, about 80% of them fail to meet their intended goals. Despite the risks and challenges involved, businesses continue to spend over $2 trillion on acquisitions every year. Why? Because in today’s fast-paced market, it can be difficult for a company to develop all the necessary resources quickly enough to stay competitive. Acquisitions offer a way to rapidly expand a business’s ecosystem, tapping into new relationships, distribution channels, products, and innovations.
As the leader of an entertainment technology company that has undergone 15 acquisitions in the past decade, I have learned valuable lessons about the importance of people in the success of an acquisition. It’s not just about acquiring technology or products; it’s about gaining knowledge and thought leaders who can drive your business forward.
The Human Element in Acquisitions
One of the most critical aspects of a successful acquisition is often overlooked: the people. The individuals involved in an acquisition can make a significant difference both before and after the deal is closed. Pre-deal due diligence should not only focus on profits and risks but also on identifying leaders who can contribute to your company’s growth.
People are key to the success of an acquisition. For example, one of our early acquisitions had technology that became outdated, but the CEO proved to be an invaluable asset to our leadership team. By recognizing the value of people and developing a solid integration plan, we were able to successfully leverage the acquired company’s resources and talent.
Culture and Integration
When companies come together through an acquisition, it’s not just about combining products and operations—it’s also an opportunity to create a new culture. By blending the best practices and values from both companies, you can establish a new norm that reflects the evolving mission and culture of the combined entity.
Creating a culture that aligns with the new company’s goals requires transparency and openness. Communicating with employees and addressing their concerns promptly can help alleviate anxiety and uncertainty. It’s important to move quickly and transparently during the integration process to retain valuable employees and knowledge.
Measuring Success
Success in an acquisition can be measured in various ways, from financial goals to market expansion. However, true success goes beyond numbers—it’s about creating a team that is motivated and prepared to deliver exceptional experiences to customers. By recognizing the importance of people in the acquisition process, we have been able to build a team that is dedicated to achieving our goals and driving innovation in our industry.