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Pivot. The effect of integrating an acquisition upon the staff in the parent company
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If you’re a small or medium sized business and acquire another enterprise, accept that it’s going to affect all of you
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We end with
A QUESTION TO ASK YOURSELF
BEFORE YOU ACQUIRE
DEFINITIONS
Integration:Bringing together two businesses to make one,
after an acquisition
SMBSMB:Small or Medium sized
Business (Enterprise)
Integration
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IN THIS PRESENTATION WE’RE TALKING ABOUT ONE SMB ACQUIRING
ANOTHER SMB
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500
100
100
50
20
Small Business Administration (USA)
Gartner Research (USA)
Industry Canada
European Union
New Zealand
NUMBER OF STAFF
WHAT IS A “SMALL” BUSINESS, EXACTLY?Different Definition on the size of a Small Business
99% of businesses in New Zealand have
less than 50 people
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AND THAT MAKES “MEDIUM” … ?Less defined than “small”
999
500
250
Gartner Research (USA)
Industry Canada
European Union
NUMBER OF STAFF
Different Definitions on the size of a Medium Sized Business
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A small boat moving across the water
It joins up to another, smaller, boat
When they set off together, the 2nd boat is used to going a
slightly different direction, at a slightly different speed
What happens?
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1. Bakery with long term staff, been in business many years
2. Software company in dynamic market
Which can handle the change in direction and instability that
ensues?
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BOTH
But the amount of change that they are
comfortable with probably differs
dramatically
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FOR EXAMPLE…
•A 100 person business acquires a 10
person business
•The 10 are going to incur a lot of change
in their work environment
•But many forget that the 100 will also go
through change
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NOT BUSINESS AS USUAL
•Usually people assume the acquiring
(parent) company is unchanged
•However, to some degree, all of these are
changed
• The paths, speed of forward motion
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WHAT IS A PIVOT?
• Startups talk about pivoting, when a company changes its business model, i.e. the direction in which it is moving
Odeo pivoted away from subscription podcasts when they saw iTunes taking over the market
They moved into micro blogging
And renamed to Twitter
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WHY ACQUIRE?
• Whenever you acquire anything, you wantsomething out of it
• With an SMB acquisition you usually want one or all of these
•Expertise•Market•Technology
• The effect of absorbing these is the pivot
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SO WHAT?
•Unlike large businesses
•SMBs are significantly affected by external
factors and changes in direction
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THE PUNCHLINE
• If you acquire a business
•Can your currentbusiness culture handle
the amountof change that will affect
them?
• If not, then there’s trouble ahead
• Unless you do something to prepare for this
QUESTION FOR THE DAY
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SMALL PIVOT
Delay a product
releaseAdjust tax position
Adjust to new
market share
Increase Customer
Support team
Implement long
awaited IT – now
that the company is
larger
Change invoicing
policy
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BIG PIVOT
Acquired Senior
Management
becomes policy
maker for parent
Redirect sales
towards new market
Use IT from
acquired company
Adopt sales strategy
of acquired
company
Rework marketing
campaign
Adopt acquired
technology as new
platform for parent
company product
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LOOK FORWARD TO FUTURE BLOGS ON BUSINESS CULTURE CHANGE
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We help SMBs through their Special
Projects• Whether it be a phone call or an onsite engagement, we’re here to help you
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P.S.
•The acquired staff will go through more
significant changes
•We haven’t touched that subject at all, here
Helping small and medium
sized businesses with Special [email protected]
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