Short of going public, the goal of many companies is being acquired by a deep-pocketed, larger company with a complementary set of products. The price tag may have lots of zeros and commas in it. But the chances of product team members getting a life-changing windfall are pretty slim. It’s far more likely you’ll receive a “retention bonus” and be forced to stick around for a year or two before you see the first dime of your stock options payout.
In the meantime, your life is totally turned upside down. Your old goal of improving the product to increase growth and usage now has a new friend riding shotgun—integrating with your new corporate overlords. Oh, and you get to do all this while navigating a completely new corporate culture and learning the names and quirks of hundreds of new coworkers.
In practice, most products face one of three post-acquisition fates:
- Merging with an existing product offered by your acquirer because they want to join functionality forces for a superior combined offering.
- Continuing to exist as a separate product because it has a distinctive brand or market, or it simply makes more sense to maintain as a standalone offering.
- Sunsetting your product because the acquirers were far more interested in acquiring talent, technology and/or customers than the product you manage.
Regardless of which scenario unfolds, it is a tumultuous time for product teams, who must now tap into an entire new skillset and state of mind when they start punching in at NewCo after the deal closes. Not only is the work environment new, but you may find yourself auditioning to keep your job as “redundancies” are identified and organizations get “optimized.”
Surviving an acquisition: 9 tips for product managers
With new players, new challenges, and new priorities, product teams might feel overwhelmed in the face of so much sudden change and diminished job security. Here are some pointers on how to survive the transition and put your best foot forward when you receive your new marching orders.
1. Do your homework
Learn about the company doing the acquiring, their product portfolio, their customer base, and the individual members of the company you’ll be dealing with. You’ll be better prepared once you start meeting with them in person (or on conference calls and email threads).
Although they will tell you about themselves, it’s always good to seek out third-party sources to see what the “real deal” is on these folks. Tap your network, do a little LinkedIn research or use Glassdoor to find out as much as you can about the culture to see how you will (or may not) fit in.
2. Communicate early and often
Assumptions are out the window post-acquisition. You can’t count on anyone being knowledgeable about your particular product’s features, limitations, customers or roadmap. Sync up with your counterparts in the acquiring company as soon as possible to try and shape the conversation and raise concerns early on.
“They need to hear from you about the relevance of the company it just acquired so they embrace you and tell your story,” says Jeff Erramouspe of Spanning. “They won’t do it without awareness or understanding of the bigger picture.”
3. Sync up on roadmaps
Before your two CEOs shook hands on this deal, both companies had existing plans for their products and technologies. Huddle up with your new colleagues and compare notes on where you were planning to take things. You should each be conversant in the other’s plans and start collaborating on how and where to join forces and find commonalities that could create more efficient and speedier paths to market.
4. Defend the honor of products and features designated for sunsetting
It’s quite possible that decisions to cancel certain products or features were made at high levels by executives who didn’t possess all the facts when making those calls. Make sure the decision makers understand the value proposition of the things they’re planning to kill off.
In particular, if there are features or products used frequently and highly-valued by key customers, you may be able to secure a stay of execution. And if you don’t already know what’s most prized by users, you better work fast to find out.
5. Prepare for conflict
There’s no way around it. No matter how many “synergies” exist, turf battles, power grabs, incompatible personalities, and damaged egos will become a common occurrence during the transition period. To mentally prepare, have your facts straight and evidence to back it up. Think about what’s worth the fight versus letting slide.
6. Prepare for the worst
When management breaks the news that your company is being sold, they’ll typically accompany the announcement with plenty of assurances that it will be a net positive for everyone. But words of encouragement about the fate of your product, your team’s autonomy and the security of your career path may not pan out once the dust begins to settle.
Instead of getting your hopes up, prepare yourself for disappointment and having to make some tough personal decisions: Is the promise of future dollars worth it? Are there less obvious opportunities to turn some bad news into good fortune? How can I make the most of my time to position myself better for the next gig?
“Perform a skills gap assessment on yourself,” says Monica C. Hayes of Viant Medical. “Are there any areas in your skill set that could be strengthened? Now is the time to close that gap. Every company has pain points. Demonstrating your value through your unique skill set to alleviate those pain points will put you at an advantage for the opportunities a merger may give rise to.”
Of course, the best way to avoid an eventual negative outcome is to knock the socks off the new management team by doing an outstanding job.
“Don’t let the shifting sands environment of an acquisition be an excuse not to be a stellar performer,” says Sarah E. Brown of BuildingConnected. “You need to put in extra effort during this period because upon staying or leaving, you will have new people to impress either at the acquiring company or a new role very soon.”
7. Build important relationships
New roles and shifting power dynamics might mean new teammates or a new manager. Invest in making these new relationships work and strengthen your bonds with fellow survivors that have moved into key roles. You’ll find new allies and confidants in the changing organization. And if you’re looking to turn this opportunity in a promotion, this might be your lucky day.
“If you are looking for more responsibility, now is the time to mention it,” says Rich Casselberry of Liberty Mutual. “Give your manager your elevator pitch and present him or her with your plans for how you would structure the new organization and save the combined company money.”
8. Choose your battles
While you don’t want to be seen as a brittle stick in the mud that is wholly resistant to change, you also don’t want to get steamrolled. Decide what matters most and make those items sticking points while being flexible regarding less critical matters. Things will change, whether you want them to or not, so focus on the most important areas where you need to stand your ground.
9. Break bad news quickly
When the bigwigs put this deal together, they assumed everything would go swimmingly and the combined companies would be able to quickly take on the world with their combined offerings. But once each team pops the hood and gets a look at the other company’s goodies, there are bound to be some unpleasant surprises.
“[The CEO] expected this product to become completely integrated into our product relatively soon after the sale closed—and that integration was key to her acquisition strategy’s success. Someone told her it was a relatively easy process to integrate the acquired functionality into our product, and she didn’t want the customers to have to keep using the two products separately,” says David Radzialowski of Third and 10 Product Consulting. “I now had expectations to manage—I needed to educate the CEO on exactly what needed to be done to integrate the two products, which wasn’t news that she wanted to hear.”
When these unexpected hitches arise, escalate quickly to get maximum awareness and visibility of the issue ASAP so expectations can be reset and resources appropriately allocated.
An acquisition is no time for modesty
It might be instinctual for some to keep their head down and hope they can just survive an acquisition. But the folks who typically come out on top are the people positively asserting themselves during the transition period, when things are still malleable and up for grabs.
“Don’t worry about bragging. This is not a time to be humble about something glowing in your track record,” says author Vicky Oliver. “It’s the time to make sure a new manager knows the value you bring to the organization.”
An acquisition can be a scary and uncertain time, but it is for nearly everyone involved on both sides of the transaction. Since many things will be out of your control, focus on where you can add value and have influence to show all parties that you’re a keeper and destined for great things.