15 Things I Learned When I Sold My Business—Part 3

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This post is the final installment in a three-part article begun with 15 Things I Learned When I Sold My Business and continued in Part 2. In each, I recap insights I shared in a 2006 presentation to McMurry staff after selling my firm, Redspring Communications. Part 1 focused on building a business and readying it for sale. Part 2 looked at how we found a qualified buyer and navigated the first phases of acquisition and integration. In this final installment, I look at later stages of integration, adding some overall perspective on doing deals and, well, life.

11: You can’t force a merger  of cultures

No matter how hard company leadership tries to manage the process, organizational culture develops organically. Mission statements, core values, and human resources practices can certainly guide cultural development, but as an ultimately human concept, culture arises and derives its characteristics from the humans inhabiting it. In Part 1, I referred to the importance of hiring good people and trusting them. When you attempt to integrate businesses, you will be reliant to a large extent on the willingness of those people to adapt to the changes you and the buyer envision.

That said, there’s a great deal that can be done to encourage a seamless integration of cultures. In our integration, McMurry had a large office in Phoenix, AZ, and Redspring had a smaller office in Saratoga Springs, NY. Recognizing we had both office-specific distinctions to work through as well as different geographic personalities, we initiated robust communication programs to keep the two offices in touch—including an employee intranet, videoconferencing, quarterly and annual in-person leadership and team meetings, and a weekly email newsletter. On top of that, we instituted an exchange program that sent two employees from each office—as a reward for excellent work—to visit the sister office each quarter. The visits, while intended as goodwill gestures, were also cross-training opportunities. Upon their return from the trips, staff gave presentations to their peers on what they learned. The program was enormously successful and worth the investment.

Additionally, we took pains to explain how our two core ideologies lined up, and then went about promoting our core values on the intranet, office signage, and even through our employee review process. Before long, Redspring employees bought into the McMurry core values entirely—not because they were forced to, but because they were invited to, and the communications around the integration effort were conceived of and driven by their peers.

Perhaps the best indication of our success in integrating cultures came when we asked Redspring staff if they wanted to retain their old brand for a year or rebrand under the McMurry name. Unanimously they voted to roll up under McMurry—to become, as they described it, part of the family.

The lesson here isn’t shocking at all: People and communities operate at their own pace and according to their own rules. That’s a good thing and a healthy thing. Don’t fight it. Work with it. Harness the energy of your best people and help them lead their peers into the new, combined culture.

12. Vive Le Différence

Now, in all our efforts to integrate culture, we also recognized there were certain insurmountable differences between employees from the northeast and those from Phoenix. We recognized that achieving a common vision for the company and its culture didn’t necessitate homogenizing our offices. From a human resources perspective, we immediately aligned our hiring practices to ensure we hired the best people available, but we acknowledged that the two offices might continue to have tonal differences between them. And that was okay, so long as everyone was true to the core values, performed at the expected level of excellence, and embraced our differences as a source of strength. When, shortly after the Redspring deal, McMurry acquired a small Scottsdale-based web development firm, that acceptance of cultural differences became only more important. In my integration talks to our team, I referred to the three offices as different flavors of the same, unified culture. Employees seemed to welcome that distinction.

At the new McMurry, we wanted our people, our teams, our offices, to share a common mission and set of values. Beyond that, individuality and difference were celebrated for the same reasons that E Pluribus Unum is the motto of the United States. Difference brings a variety of perspectives. It challenges the status quo. It encourages lively debate. Ironically, I found the more we allowed people to celebrate their differences, the more they were emboldened to embrace the unified organization as theirs. Redspring staff didn’t waste energy clinging to old systems or traditions because change was introduced conscientiously and they were given a say in how that change took place.

That’s not to say, of course, that we made integration optional. There was a lot of important work to be done after the deal was consummated, not the least of which was an overhaul in our printer relationships and a large-scale redesign of our workflow. We had targets to achieve and synergies to realize. But we found that allowing for small differences in our cultures actually made achieving our goals easier because people invested their energies in integration work rather than griping about top-down changes to local culture.

13: Welcome to Graduate School

Managing through an acquisition is like earning a Master’s Degree in change leadership. If, as I said earlier, everything changes after a deal is consummated, then, from the manager’s standpoint, everything you manage changes as well. It’s an exhilarating and bewildering experience. While you’re going through your own set of individual changes, you’re leading your staff through significant turbulence—and it’s all new to everyone. You can expect to work harder, think harder, miss more nights of sleep, and have more confusion-induced headaches than ever before. You’ll be managing under the most challenging and demanding conditions, with staff looking to you for answers you may not be able to provide: When will integration end? How much more change should we expect? Will the org chart change? Will there be any staff reductions? From rank-and-file staff you’ll get questions that generally boil down to one concern: What does this all mean for me?

Layered on top of leading your team is working with new peers at the acquiring company. You may find yourself answering to a boss when you haven’t for years. Or you may have colleagues whose style doesn’t sit well with you. Managing laterally and up the ladder can add a new kind of emotional labor you hadn’t anticipated. The whole thing can feel overwhelming at times.

So it is like graduate school—rigorous thought done for a sustained period of time in an unfamiliar context. The business challenges are proportionately more complex and the stakes are proportionately higher. At its best, it’s a hell of a ride. At its worse, well, let’s not go there. Whatever your caffeine-source of choice, have lots on hand for the first year of integration.

14: Never forget the business objectives of your deal

Speaking of graduate school, I personally learned a lot about business from Chris McMurry whose ability to focus on getting results was truly remarkable. From the beginning of our negotiations through integration and beyond, Chris was laser focused on making the Redspring acquisition a financial success. He kept the goals simple and memorable and never lost sight of them:

  • Reduce direct costs related to printing and mailing
  • Absorb Redspring’s excess capacity
  • Accelerate the growth rate of the combined business
  • Keep staff and clients happy

Working tirelessly with his management team in Phoenix and Saratoga Springs, he put the mechanisms in place to monitor those goals—weekly, monthly, quarterly—and keep them foremost in everyone’s minds. Company messaging on our integration goals was so consistent and so pervasive that you could ask anyone in the two offices what needed to be done and they could tell you. It was a textbook integration from many perspectives, but particularly in the communication and reporting strategy related to operational goals. Execution, while complicated in its own right, became not something we did on top of our regular work, but part and parcel of our roles as leaders.

I once talked about business integration to a friend of mine at Goldman Sachs. He laughed knowingly and remarked, “It’s amazing how tired you are when, after negotiations and due diligence, you get the purchase agreement signed. But that’s when the real work begins!” That’s the truth of doing deals—and for the seller who stays on board to work on integration I advise knowing your post-deal goals as intimately as your purchase agreement. Otherwise all those lovely pro forma growth projections are no more than toner on paper.

15: Life is Short

I believe we’re all accountable for the decisions we make and that, except in cases of true misfortune or blind luck, the direction our lives take is a result of our decisions. For my part, I find the people with whom I work have a huge impact on my happiness. The older I get, the more this has been the case. I don’t want to spend time with excuse-makers or negative, complaining, ineffectual people. I want to be surrounded with people who are smarter, faster, funnier, and kinder than I am. People like that inspire us to up our games—to be better in everything we do.

When I sold my business, I planned to consult with McMurry for six months and then move on. It never occurred to me—or probably to Chris McMurry or Fred Petrovsky (McMurry’s president at the time)—that perhaps I should stay after the deal was consummated. After a couple of weeks, though, Chris and Fred asked me to remain indefinitely and I, sensing the opportunity to work with a first-class group of executives and a dynamic new team in Phoenix, said yes. My decision was based on the opportunity to have fun at work, to learn new business skills, to build something even bigger and better.

It’s been 13 years since I signed the purchase agreement with McMurry. It’s hard to believe that much time has passed—or that we at McMurry went on consummate two more deals—merging with TMG in 2012 and then with Manifest shortly after that. As I wrote in one of my earlier posts, Redspring has largely disappeared into the successor organizations. I have few regrets about any of it, though, due entirely to the quality of people with whom I worked and the friendships that remain in place to this day.

Life is way too short to spend your time any other way.

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