“Mediocrity knows nothing higher than itself, but talent instantly recognizes genius”.
Sir Arthur Conan Doyle (1859 - 1930), (Sherlock Holmes) Valley of Fear, 1915
If your acquisition strategy doesn't include adding and retaining talent, then it should do. Acquiring talent via acquisition is already a common theme for savvy software technology companies. Yet, most companies talk about acquiring revenue, technology and customers as almost a ‘given’; far fewer mention making an acquisition to gain talent. Despite this apparent oversight, a variety of studies has examined the reasons behind the success of top technology companies - Almost invariably, it is the talent of their top people that heads up the list.
So, why the disconnect?
Firstly, 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. As they are talented, it will be no surprise that they have other alternatives. These are the very people a company needs to hold onto, yet companies rarely discuss or think about how to retain them.
Failure to Recognise the "Bright Sparks"
There is also a failure to recognise the ‘bright sparks’ within the acquired companies. This could be due to a number of factors: the “not built here” or the “them and us” syndrome tends to create invisible barriers which result in blind spots when assessing the acquired company’s talent. In some instances, there is almost a master/slave attitude from the acquiring company and, as a consequence of this attitude, they fail to spot talent - and lose their most important asset along with much of the value from their acquisition in the process.
Get the Best From Your Acquisition - Nurture Your Talent
The talented people within a company that has just been acquired need reassurances. They often feel that they are being forgotten and neglected. Inevitably, some also feel they have changed jobs and are now working for a different company - yet it all happened without their permission. These are issues that need to be handled sensitively if you want to retain the best people.
Different language, different regions
Differences between company cultures can often create barriers that can be challenging to overcome; consideration of this and significant planning needs to be in place prior to the integration phase of an acquisition. Sometimes, something as simple as a ‘language’ barrier can prevent the company from truly leveraging the acquired talent. This could be two companies from different regions or even companies from different sectors that speak a different technical and sector 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, if you are considering making an acquisition, it is an area of M&A strategy that needs close scrutiny and planning.
