This series is inspired by all of the terrible mergers and acquisitions of consulting partners I have seen over the course of my association with Salesforce, both as an employee and a business consultant and advisor to Salesforce partner executives. You can read all about mistakes on the sales side of mergers and acquisitions in this earlier post. I am sharing these insights because it pains me to see good companies have their resources squandered and the balance of what they built destroyed post-acquisition. Also because it makes absolutely no sense to buy a partner, and then see the whole investment you’ve made unravel. And, also, because it continues to blow my mind that this happens. ALL. THE. TIME.
Here are the top integration mistakes I see that can starve, kill off, or generally screw up a services merger or acquisition:
Integration mistake #1 - Buying the wrong practice
I’m not talking about culture fit, I’m talking about the kind of customers you service. If you service the SMB market, don’t buy a practice built on servicing larger accounts. If you work with large enterprise customers, don’t think that a practice that does their best work in the mid-market will be able to service your accounts. The skill sets, processes, and types of consultants needed are just not the same.
Pro Tip: If you are considering a merger or acquisition, take the time to understand your current customers AND the skillsets of the potential acquisition. What services would complement your existing offerings and customer base? If you want to expand into new markets, what companies could you acquire that would be a complementary fit to your current target audience?
Integration mistake #2 - Underinvesting
Hurray, you bought a technology services practice! Now what? It’s time to invest in the practice to ensure you make something of it. I have seen many practices laid out to pasture – no investment in the practice, the people, or the customers. It’s like all they did was check the box that says “Yes, we have a Salesforce practice.”
Pro Tip: My first question, and one you should consider is, why did you buy it? How did you envision it pairing with your existing business model? What milestones do you want this business segment to achieve – and how much budget/resources/training will it take to get there?
Integration mistake #3 - Having no strategy post-acquisition
Many companies will buy a Salesforce, Snowflake, AWS or other technology services practice because they feel like they are missing out on revenue with existing customers. Perhaps the Salesforce consulting services business in many of your accounts is owned by another firm, or even a competitor. So you think, “Let’s buy a practice,” and think along the lines of, “If we build it, they will come.” This never happens!
Pro Tip: Success requires an integration plan and strategies that demonstrate to potential clients that you actually “do Snowflake,” “understand data technologies,” or “do cloud.”
Integration Mistake #4 - Thinking your way is the only way
Acquisitions should be a two-way street. Sure, if you’re buying a smaller firm there are many processes and improvements you’ll make that will streamline their business. But, I always see that as a one-way assumption. I know a few Consulting Partner firms with incredible operating models that are transferable to larger firms.
Pro Tip: Evaluate both your processes AND those of the newly merged/acquired company. Take time to consider whether your way, their way, or a blend of the two will be the most beneficial improvement for doing business moving forward.
Integration mistake # 5 - Keeping teams siloed
Being involved in an acquisition means you’re likely obtaining business opportunities and clients, but don’t forget you’ve added talented people to your team. Growth opportunities and the option to expand into new areas are the best ways to keep these new-to-you folks around. Sure, there will be attrition around the M&A event - that’s pretty normal. But if you make it difficult for these new team members to grow in your organization they will leave when it’s convenient for them.
Pro Tip: At the onset, begin to integrate your team with the new team. Create opportunities for everyone to share expertise, debrief each other on the needs of every client, and collaborate on ways to make current projects a success, or identify new opportunities to cross-sell and upsell customers. Throwing in a team-building exercise is a great way to get everyone acquainted and build the foundation for a cohesive team where everyone feels involved, appreciated, and valued.
Are you an MSP, digital agency or other services firm thinking about buying a technology practice or purchased one already? Let’s connect. I can help you work through the above pitfalls and optimize your integration efforts so you have a greater chance of success with an Executive Advisory package.