Managing your salesforce through acquisition. The wedding is the start!
After a long period of slow down in acquisitions, we are noticing more of a flurry of interest in acquisitions. Thomson Reuters said that Worldwide M&A during the first nine months of 2014, was up by 59% compared with 2013 levels and this was the strongest first nine months for worldwide deal making since 2007. Allen and Overy an international legal practice have said that in Western Europe acquisitions in 2014 were ‘a whisker’ away from 2008 levels.
Increasingly companies are looking to acquire in order to accelerate growth, acquire capability, or expand proposition sets.
A great deal of planning always goes into the pre-acquisition period. One side usually put huge efforts into due diligence. The other works hard to prove they are worthy of being purchased. In our experience nothing like as much attention is put into what will happen after the acquisition is completed.
This is like couples who put all their attention on the wedding, only to find that actually this is the start of the story in making a good marriage, not the end! After the debris of the wedding party is cleared away…. or in this case, the celebration and relief of an acquisition deal well-made is over, then the real challenges begin. The potential benefits of an acquisition are just that …. ‘potential’ …. whether they become reality will depend on the actions taken in the first 6-12 months after the contract is signed.
Nowhere in the company is this more important than in the sales team.
Clearly any acquisition or merger ‘partnership’ wants to get up to full productivity as soon as possible, take advantage of whatever the combined companies bring to the party, reduce costs through realising economies of scale, retain the best talent, and present a seamless, consistent and integrated solution to the customer right from the start. The slower and the more ineffective the transition – the more the negative impact on sales productivity. The business case for an effective transition is very compelling!
It is not possible to put the company into ‘dry dock’ while you work out how the teams will be merged. Changes need to happen while sales team is still functioning, often with increased performance expectations. This is a tough job for any sales leadership team.
What are some of the areas in our experience you may need to consider….
- Leadership and management – Who are the best managers across the two sales forces? How can their talents be best used? This is not just about product knowledge but management style. The reality is often that managers are given inflated expectations in order to smooth the way for the acquisition, and there can be a lot of disappointment and politics which can create ‘inertia’ in reaching full productivity.
- Sales team structure – How quickly will you integrate the sales teams? Will you stick with product silos, or move towards verticals? How will geography play a part? Do you want to separate new business and account management? Making decisions wisely and speedily is vital here, all of which takes forward planning.
- Cross-selling opportunities – How can you encourage sales people to bring their colleagues into their accounts? There are certain logical things to think through….How will remuneration work for sales made jointly? How do the propositions fit together? How will you provide the necessary pre-sales support? Often more of a challenge are the cultural issues like building teamwork, trust and cooperation. Helping individuals see that the advantages outweigh any perceived risks. We’ve found that joint account planning can be a powerful way of getting the ‘rubber to hit the road’ and look for ways to introduce the new combined offering.
- Customer retention – How will you keep clients informed and retain them? In acquiring a company you are buying a body of goodwill –which can all too easily be lost if the transition isn’t managed well.
- Rationalising proposition set and collateral – Does the acquisition just add a few more bullet points onto your list of solutions … or can you take this as an opportunity to reposition how you are seen by your clients, engage higher up and offer a true business orientated solution? As part of this you will need to work with your delivery leaders will want to review key partners and suppliers who can add to your offering.
- Assessing and building skills – How quickly can you gain a good understanding of who are the most capable sales people, who can develop to sell the full proposition set, and who do you definitely need to retain? The most committed people can also become the most disillusioned if they are not handled well. We’ve found that development programmes with mixed groups across the joint sales team can have a massively positive effect in building skills and teamwork
- Consistency of sales process – How will you pick the best sales process from each operation and roll it out? It is crucial to have consistency of crucial processes like CRM, forecasting, territory management, and account planning across the combined sales force. It will enable effective cross selling if people understand each other and can ‘fall into step’ alongside each other easily. Orbit have easy to use check-lists that can help in this ‘audit’ process.
- Communication and engagement – Understandably an acquisition and subsequent restructure involves a lot of areas which are confidential and sensitive. However good communication is vital to retaining the best people and keeping morale high during the transition. How will you keep the channels open for two-way communication between management and the sales team?
- Account allocation – How quickly can you audit the combined customer bases and discover areas of overlap, areas for potential cross selling, and penetration in key vertical sectors? Where is the white space? Which are your major accounts, which have potential for development, which should be dropped? Who will own the customer in the new structure, given the client history, geography and skill-sets? Making sure this is clear as soon as possible has a massive effect on client retention.
- Accountabilities and objectives, linked to incentives and remuneration. In the end this is one of the key drivers of long term behaviour. How can you create consistency across the teams in a way which is perceived as equitable?
- Integrating cultures – This can be the most challenging part. Sales teams can have really different cultures, with some being highly technical, product orientated with a fast-paced price-oriented sales process and low order size…. Others can be more business-orientated, with a more consultative, slower sales process, potentially leading to a higher contract size. Differences can lead to conflict and mistrust, which can quickly become obvious to the client, inhibit cross-selling and reduce client satisfaction.
These are just some of the key issues to be thought through in post – acquisition planning…. And they can make all the difference in realising the potential value of the companies being merged.
Managing an acquisition is a huge job for the sales leadership . They need to be ready long in advance and not just wait for it to happen. Crucial to this preparation is often up-skilling and empowering your next layer of managers so they can effectively take care of the current operation while the senior team put their attention on integrating the newly acquired company.
With an issue as important and potentially emotive as this one, it can be useful to have a second opinion to sense-check your plans.
So where are you in the acquisition process? We suggest you ask yourself…
How well are you managing your current acquisition?
How ready are you for your next one?
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