Buying the company is the easy part. How to step into the owner's shoes and keep a manufacturer running through the transition.
Buying a company is the easy part. Once it’s in your hands, what do you do with it? How do you ensure its continued success as you step into the owner’s shoes? This acquisition transition doesn’t happen overnight and can even take a few years. There is no “right” way to integrate new leadership into the company, but below are some tips to help ensure a smoother acquisition transition.
Enter With a Game Plan
Throughout your research and acquisition of the company, you should be formulating a plan for how the company will operate under its new ownership. Will there be any major changes in operations or pricing? Will there be layoffs? Consider any of the questions your new employees and business partners may ask you. Create a list of achievable goals that contribute to the big picture and be ready to share them. Keep in mind that this plan must be highly flexible and adaptable as you experience the company's day-to-day operations. You will want this initial plan prepared before you meet the employees so you can enter the company with a confident strategy for a bright future.
Introduce Yourself Promptly and Charismatically
The first business day after closing may be the most crucial in establishing a strong introductory relationship. Putting off meeting your new team will only increase anxiety and doubts, so help them put a face to your name as soon as possible by hosting a company-wide meeting. Make your initial introduction to the entire staff at once—not only will this save you from saying the same thing twice, but it will also build a mutual trust that everyone is starting on the same page. Remember that “strategy for a bright future” from step one? Present it here to show that you have been learning about the company and have a vested interest in its success. Gaining the trust and confidence of your employees with a strong first impression will have an enormous impact on a positive acquisition transition, so be transparent and straightforward. In many manufacturing companies, the staff is quite small and close-knit. Consider meeting with employees one-on-one to make a more personal connection and to learn their honest thoughts and fears about the company.
It is equally as important to make your presence known to key suppliers and customers as soon as possible. Especially in companies with high customer concentration, you will want to ensure that your leadership will have a positive effect, if any, on the current relationship. As with your employees, remain transparent and straightforward about any expected changes in the business relationship.
Learn About the Company
Everything you’ve learned from the previous owners and through due diligence is important and necessary for formulating your business plan. However, reading an instructional book about riding a bike doesn’t mean you’ll be a professional cyclist the first time your feet touch the pedals! You’ve already spent weeks learning what the company does, and now it’s time to see it in action. Spend plenty of time early in the process actually present at the facility. Circulate, take note of any inefficiencies, and learn from the staff. Often, the workers know the company's and customer's needs better than you do! This is also a time to strengthen the relationship with your employees. Ask for their advice, respect their opinions, and do not overstep the chain of command when making changes to the workflow.
Find Your Balance In Leadership
You are now the owner of this company and therefore the captain of the ship. However, you will want to avoid undermining the leadership of the already established chain of command. Use your management team to initiate lower-level changes—it’s their job! Take notes during your observations and discuss with your management team before making any changes or delegating responsibilities. Trust them to get the job done according to your recommendations, rather than stepping in on someone’s responsibilities and creating resentment. This may be difficult to do when obvious problems arise, but maintaining respect for the chain of command will ultimately be appreciated by employees and allow for smooth management of the company.
You should also maintain a good relationship with the previous owner, and ask questions when needed. The previous owner wants to see you succeed as much as you do, so do not be afraid to use them as a resource! However, you should be careful not to rely too heavily on their input, as they may resist change due to emotional attachment. An acquisition transition is more than just the transfer of assets and operations; it is also a shift in the company's culture. As you grow comfortable with the company, you should rely less on the owner as a crutch until you are fully confident making management decisions on your own.
Revise Your Goals and Implement Change
After you have spent some time with the company, you will come to realize the realities of the business as opposed to your initial perceptions from the outside. At this point, you should work to revise your “strategy for a bright future.” Now that you know the day-to-day workings, you can more clearly identify areas for improvement and change as well as the direction you want the company to take. Include any major issues that you observed while visiting the facility. Create a new list of attainable goals and get cracking on attaining them! With the confidence and strong relationships you have established with your staff over the past few months, this should be a natural process. The company is yours now, and you will decide its success. Cheers to a smooth acquisition transition!