Eight main points in managing mergers and acquisitions companies

Tomio Gees Lennon (Tomio Geron), author of the famous Science and Technology article, wrote an article on Christian Segstral (Kristian Segerstrale) to analyze the aspects of how to maintain the team and the success of the merger and acquisition of the start-up companies. Here is the main content of the article he wrote.

As a founder of the company, Christian Segestedt has two major achievements. As an expert in gaming, Christian created Macrospace, which merged with Sorrent and then renamed Glu Mobile. In addition, he is also co-founder and CEO of Playfish, a social gaming company. However, Playfish in 2009 by the Art Electric company to buy under the 400 million dollar price. Now, Christian has become co-founder of initial capital.

I visited Christian and asked him about how to manage mergers and acquisitions and how to get these start-ups to succeed. Of course, mergers and acquisitions involve a number of factors, but Christian values the individual factors of participation and those that are often overlooked-that is, the way in which corporate teams are effectively prevented from mergers and acquisitions after a business merger.

First of all, if your company merges with other people's companies, it's like you're married to someone else, and it's worth spending a lot of time defending. As Christian said: "Spend as much time with the buyers as possible, especially with the chief executive of the buying business." You should explore the business together, but more importantly, explore values and culture in order to understand the likelihood of a company working together successfully. "Such a large amount of time is worth investing in, even before a business merger."

All in all, the following eight areas need to be noted in order to maintain a good team of buy-out firms and to make these mergers and acquisitions business successful.

1. Focus on the owners of the mergers and acquisitions company

Getting to know all the aspects of mergers and acquisitions will be a very important step. Not just with the executives of these companies, but with all the employees in the company as much as possible. This will help you to keep control of the company after you have acquired the company and help you decide which parts of the company you can work closely with and avoid problems. If necessary, find a way to share the task with the founders of the company so that one of you can run the company and have other founders study how to make the most of the company's employees and resources.

In short, after mergers and acquisitions, the company's founders and employees have been satisfied not only with financial considerations, but also by considering factors such as finding ways to guide the company forward and learn about interest. "For entrepreneurs, there is at least one important point in considering the income generation of mergers and acquisitions, that is, buyers need to have the same approach and long-term goals as the companies that set up the company," says Christian. ”

2. Talent

Christian also points out that talent is a key factor in determining the ultimate outcome in a rapidly changing marketplace, and that fast-changing markets are often where mergers and acquisitions often take place. As the chief executive of a trading party, you should rightly through your important talents. Christian points out that the failure of mergers and acquisitions is often due to the failure of the integrated new management team to involve key talent in the business. "When you're arranging a deal, you don't forget important people like star programmers, artists and architects," says Christian. How can you create everything (financially or otherwise) to keep your star talent as long as possible? How can you make your business life as rich as possible after the merger?

The founders should gain the trust of their employees and provide content that employees trust. Can explain your new goals and why this new goal is exciting, and let your new talent fight for these goals. The Ming-star talent values their autonomy and influence in the start-up business. So finding a way to maintain the feelings of these star talents in the merged company is also very much needed. Also, try to find the best opportunity to maintain the team as much as possible. "The merger business often talks about some empty talk," Christian said. Employees want to look at you and try to figure out if you're still making decisions. Make sure that you are still making decisions and that employees will follow the orders of the CEO of the acquirer so that the information is symmetrical. ”

3. Corporate Culture

In a start-up enterprise that aspires to development, there is no financial reward scheme that can replace or replicate the intrinsic motives of such an enterprise. Sometimes it is difficult to get buyers to endorse these cultural issues of mergers and acquisitions, but it is often as important as accounting issues. It is important to remind the acquirer's chief executive that retaining the corporate culture and "how things are Done" will be a key factor in attracting talent, while also playing a key role in the performance of corporate entities that have been acquired.

"Ultimately, you set up your company to change the world and maybe work with the people you like, in the environment and culture you like," Christian said. Your employees may join your company for the same reasons. Retain these cultures and you will have the best chance to succeed after the business merger. ”

4. Dramatic factors

One way that mergers and acquisitions can make things easier is to integrate the employees, titles and pay systems of two companies. People tend to overlook the low title of some of the employees before the merger, but once the deals are made, people pay attention to their new titles and compare them with their peers.

In other words, "Am I in charge or senior officer? Is it level 21 or level 23?" According to Christian, people's attention on these issues often leads them to overlook their concerns about products and customers. So, Christian advises, if possible, to maintain the independence of the employee's e-mail, to keep employees from paying attention to them, or not to integrate the human resources of the merged companies until everything is ready. In the case of turnover of personnel, the less the mind of the talent is dispersed, the greater the likelihood that the enterprise will succeed.

5, too much or too little?

This does not mean that you should not integrate parts of the mergers and acquisitions business. After all, the deal has some business logic – which is why two companies are merging. Sometimes the right answer is to integrate everything on the day of the transaction, but sometimes it's not. "In one of my companies, I've always been very worried about the company being destroyed so that I finally missed out on a lot of opportunities for business development," Christian said. ”

Your level of integration with your mergers and acquisitions needs to be consistent with your goals. For example, one of the reasons you might integrate is to integrate the technology experience of your start-up company with the big brand companies that you buy your business. But, Christian says, this goal requires a degree of integration so that you can follow through on your previous goals. The slow integration process will undermine the performance of the enterprise, of course, the integration process too fast will certainly be problematic. In short, the degree of integration of mergers and acquisitions needs to be appropriate.

6, Exchange

Letting your employees know that the situation will be a major activity throughout the consolidation process. You want to be honest about the rationality of the business merger and the reason for the deal. "Don't pretend that nothing is going to happen tomorrow," Christian said. Be honest and tell your employees that this risk is coming to an end and another risk is about to begin. Celebrate first, then start with the details and don't take everything for granted. Lead them to learn that new things will be exciting and interesting. ”

Employees will look at you, and they'll think, "Will my chief executive stay? What do you do to make a difference?" So you need to make a promise that you can achieve. "The worst thing to do," says Christian, "is to tell employees that things are progressing as they were before, or to make a commitment that you can't achieve." ”

Christian also claims that small things can have big problems. You need to tell the staff that they will still get free fruit in the new company. But then, the CEO of the acquirer may say, you can't. In this case, Christian claims: "If you have to break a promise in front of your employees, you will lose more." If you break a promise on a small fruit issue, what will your words and deeds do in the future in such big issues as corporate strategy?

7. Investment strategy

Christian's focus on talent also applies to its investment business. At the time of the investment company, Christian dug up the talent in the entire workforce. "In the game area, you need to focus more on art leaders and major programmers than CEOs," he says. Once the company is successful, the chief executive will be a bit more important, but before the launch of the product, the CEO's role is to retain relevant important talent. ”

Game start-ups are more likely to succeed, as long as the team works together earlier. Especially for game companies, the product is the soul of the team. "Focusing on a product is like focusing on a team-you have a gut instinct about who they are and what they care about," Christian said. ”

8. Dealing with conflict affairs

Asked about how to deal with the conflict over sales companies, Christian claimed that his company, which recently involved 1.5 billion dollars in supercell and SoftBank, has been supporting the founders. He said: "We unequivocally support what the founders want to do." We tried to help. We will design strategies and consider who is worth communicating with and who is not. But in the end, we are entrepreneurs themselves, so we think of ourselves as advisers or helpers to make decisions. But eventually it was the founder's call. ”

In addition to the above eight aspects, Christian also talked about the following matters, for example, Initial Capital to invest in their own funds, rather than the use of foreign investment. "We are more likely to consider ourselves as the co-founder of the company we invest in, not as a financial investor," Christian said. We don't have any fund issues to worry about because we invest with our own money. We do not have to worry about other financing issues, which will allow us to be completely free. ”

In addition, Christian is still concerned about gaming companies and believes that you are still able to create large-scale business and mention the Supercell case. He also said that the game industry already has a very mature market, and therefore need to focus on the relevant projects. In addition, Christian also said that Initial Capital also invests in more application ecosystems, including the internet of things, consumer health applications.