When Worlds Collide – Surviving M&A and Thriving

Arising and even resulting from the GFC, has been the rapid growth of dynamic small and medium sized research agencies. Most have innovative approaches and distinctive cultures, offering exciting workplaces to their staff who repay with high commitment. Yet this very success makes them prime M&A targets and many will, in the next few years, be bought out. Is this bad for their workforce, and how should these loyal employees react when acquisitions happen? A recent article from Asia-Pacific focused of the plight of researchers whose companies were sold on by management. In essence, the hapless researchers were portrayed as helpless victims whose utopian world was dissolved by forces of evil, represented by the faceless conglomerate. However, it’s our belief that the acquired usually survive and thrive in the face of such events. Let’s be realistic, M&A’s are a fact of life and only the naïve would think it would never happen to them. The onus is not just on the acquirer to accommodate the needs of the acquired, if the latter are as good as they think they are, it’s up to them to prove it and in doing so more easily keep their ‘independence.’

Buyers always use internal criteria and values to judge the acquired. Those ‘bought’ must understand that and prepare to explain or position themselves on those criteria and promote what else their team possesses that adds to the new owner’s business.

In 1994, Dun & Bradstreet purchased Asia-Pacific’s Survey Research Group (SRG) essentially, it was felt, for their Retail and Media Measurement Services in Greater China and SE Asia. D&B also picked up SRG’s significant Custom Research business. Initially, this was of lesser interest, custom research does not generally have the margins of the big syndicated services nor does it have the reassuring long term contracts.

There was even talk of the divestiture of the CR assets and staff morale needed attention. To pro-actively address this, CR was positioned in terms a publicly-traded acquirer would understand. It was pointed out that, due to needing less capital investment, custom research often had a higher ROI. Also, D&B could not expect their syndicated services to be market-dominant forever, so CR units were valuable to enhance and protect as the competition grew. Thirdly, an additional revenue stream meant overheads were spread over a larger base. And finally, with a major contract loss in CR, you are out next day prospecting for a replacement; not waiting 2 years for another bite at the contract.

So, wherever you work, someday the owners are likely to sell up, which means change. Acquirers need a plan to help the people in the purchased company adjust over and above the usual rationalisation. This should be more of an ‘invitation’ to the new employees to explore the potential and demonstrate how they can add value.  The acquired staff need, above all, to realise that the obligations are not entirely on the new owners to prove themselves. It’s better to be open-minded, detach yourself from emotions, and evaluate what benefits you and your team bring to the new situation. Then, express and exploit those benefits. If you’re still not happy, fair enough, maybe it’s time to move on. However, generally, you can carry on and thrive as you’ve actually had to think about and execute the value you’re creating which is a big part of your professional skill as a researcher.

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