“Mediocrity knows nothing higher than itself, but talent instantly recognizes genius”.

Sir Arthur Conan Doyle (1859 - 1930), (Sherlock Holmes) Valley of Fear, 1915

Acquiring talent via acquisition is a major driver for many companies. If it isn’t, then it really should be. Companies talk about acquiring revenue, technology and customers as almost a ‘given’. Interestingly, far fewer mention acquiring to gain talent. Yet, when studies have examined what makes the top technology companies perform, it is ultimately the talent of their top people that is number one.

So, why the disconnect?

To start, there is a poor track record for post-acquisition retention of top talent. Studies have shown that, on average, over 50% of the most talented senior management leave within twelve months of an acquisition.  Since they are talented, they will of course have various other options; even during recessionary times. These are the very people a company needs to hold onto, yet I hardly ever hear any discussion or forward thought regarding how to retain key personnel.

There is also a failure to recognise the ‘bright sparks’ within acquired companies. This could be due to a number of reasons: the ‘not built here’ or ‘them and us’ mind-set tends to build barriers, which in turn, almost creates a blindness to spotting talent in the acquired company. In some cases, there is almost a master/slave mentality from the acquiring company and, as a consequence, they fail to spot talent. This results in losing their most important asset; and much of the value from their acquisition.

Talented people within a company that has just been acquired will often feel they are being forgotten and potentially neglected. Some may also feel that they now work for a different company, almost as though they have now changed jobs, but it all happened without their permission. This is sensitive issue that needs to be handled appropriately if you wish to retain the bright sparks.

Different language, different regions

Different company cultures can often create barriers that are difficult to overcome, unless some careful thought and planning is put in place prior to the integration phase of an acquisition.

Sometimes, it can be something as simple as a ‘language’ barrier that can prevent the company from truly leveraging talent. This could be two companies from different regions or even companies from different sectors that speak a different technical and market language. Neither has enough time to get to understand the other - and sometimes the motivation is not there to want to be understood.

Whatever the reason for the loss of talent, it is an area of M&A strategy that must not be overlooked. If you are considering making an acquisition in the ECM, BPM, BPO and associated technology sectors and you would like to avoid this and other pitfalls, then we would be pleased to hear from you.

About Boss Equity

Boss Equity is an International company, specialising in Merger & Acquisition (M&A) services for vendors and service providers.  We focus on Enterprise Content Management (ECM), Business Process Management (BPM), Business Process Outsourcing (BPO) and associated markets.

By working closely with our executives, who are experts within this sector, our client companies’ benefit from increased growth and profitability, coupled with reduced exposure to risk.”