Truly Human Acquisition
The prevailing research shows that between 70-90% of acquisitions fail. Barry-Wehmiller has acquired over 110 companies without selling one. So what is different? The first difference is the first meeting.
The guest blog post below is written by Luke Jernagan, an Episcopal minister having served most recently as rector of St. Peter’s Church in Ladue, Missouri. His account details not just the play-by-play of a CEO’s first interaction with the acquisition, but importantly, the language and resulting feelings of the people.
Imagine being an employee of the recently purchased company. The new CEO approaches. You hang on their every word. And the words you hear are not the words you expect. And that sets the tone for all future work together.
If you are a leader taking on a new team or department, or going through a merger or acquisition, read below as an example of how to humanize the process and increase your chances of success and buy-in from the most important part of any business deal: the people.
I had the opportunity to travel with Bob Chapman on his tour across Europe as he shared the message of Truly Human Leadership. Bob doesn’t just do speaking events to share advice on how to grow a company; Bob’s drive is like a religious calling. He is driven to change the world by transforming the way business leaders lead their people. He envisions a world where every person loves their job because they feel cared for, valued, and appreciated by their employer. He envisions a world where “managers” who manage are transformed into “leaders” who lead their teams, keeping in mind that every team member is someone’s beloved child.
Bob calls this philosophy and way of leading, Truly Human Leadership. As he proclaimed this message and shared the story of Barry-Wehmiller (BW) to hundreds of CEOs, HR directors, and business students across Europe, someone in each audience would ask this question without fail, “Is this guy the real deal?”
After four days of speaking in Edinburgh, Madrid, and Barcelona, we took a detour to Serbia to visit STAX Technologies, a growing tissue products manufacturing company that BW acquired four months earlier. I had never been to Serbia and seeing a manufacturing company in rural Serbia sounded interesting. After hearing so many speeches about Truly Human Leadership, I also wanted to know, “Is this guy the real deal? Is BW really as good as it sounds?” The founder of STAX Mladen Starcevic picked us up from the hotel with three members of his senior leadership team, and we drove an hour and a half to the factory in the most tricked-out Mercedes van I’ve ever seen.
Knowing I was just tagging along, Bob and Mladen told me the story of STAX. It began 18 years earlier when Mladen began manufacturing packaging machines in his garage because he believed he could make a better product than existing manufacturers. He was right. STAX has grown to a team of 200+ who work in a beautiful factory that would make any engineer drool. As STAX expanded their product line and grew their market share, they also created a family. It was clear from the first moment of our visit that these folks really care about each other. If a team member gets married, everyone shows up. They spend time together outside of work. They have a departmental soccer tournament every six months. They care about each other, believe in each other, and they are proud of their company.
As STAX expanded, Mladen realized that he needed to find a partner in order to scale. With interest from multiple companies, STAX believed the BW culture of Truly Human Leadership best aligned with STAX’s family-like culture. But STAX had to take a chance. Was BW the real deal?
The van pulled up to the facility, and they rolled out the red carpet. It felt like a rock star had just arrived for a concert. Bob took time to greet every person. He shook each person’s hand, smiled and simply said, “Hi, I’m Bob.” After a short reception, Mladen took us for a tour of the facilities. Bob went into each office, each meeting room, even the cafeteria, and greeted every employee. The leadership team and I followed on the tour, and I spent a lot of time with the HR leader, also named Mladen. (In case you are wondering, they were the only two people named Mladen).
“HR Mladen” as I will call him, is a thoughtful, intelligent guy. He grew up in Cacak and later made his way to Boston with Johnson & Johnson. STAX gave him the chance to return home. I asked him how he thought this visit was going. Mladen said, “When we were talking with companies about buying us, I learned about Bob. I watched his TED talk and read his book. I wondered, ‘Is this guy the real deal?’ None of us expected this kind of visit. I had no idea he would talk to every person.” After a long pause, he continued, “This is special.”
Finally, Bob gathered with the entire leadership team for a formal meeting. During the earlier car ride, Mladen had explained to Bob that they are running at full capacity. He is eager to grow but wants advice on the best path forward. Build new facilities, expand the product line, enter new markets? At that same time, I imagine they were wondering how much pressure their new owner would put on them to grow. They were eager and anxious to hear know. What would Bob say?
Bob began by celebrating their success. He congratulated them on getting to where they are, and he welcomed them to the family. “Every time we acquire a company, it is like an adoption. Welcome to the family.” He identified new challenges in the market and assured them there would be no secrets between BW and STAX. He then said something that surprised them all. “You all have grown a lot, but as we continue, I want us to grow thoughtfully. We have no objective except to do something great together. Remember, customers do not order a product; they put their trust in you. I do not want you to go home to your families stressed out every day and every weekend. There is no reason to stress ourselves out to grow. Let’s take our time and grow only as fast as we can confidently build a quality product.”
As he said this there was a sense of shock and relief in the room as this team realized their hope in BW was grounded. Yes, they would grow, but they would grow together with their newly expanded BW family.
The next day we were in St. Gallen, Switzerland, as Bob gave his final round of talks. Having heard his speech for what seemed like 8,600 times in the last five days, I took the morning off and ended up in a coffee shop sitting next to a couple from Oklahoma. They both work for manufacturing companies and were there on business. I was telling them about Bob and BW, explaining why I was there that day. I began to explain the concept of Truly Human Leadership. The husband asked, “That sounds great but is there really a company out there that operates like that?” I said, “Let me tell you about STAX.”