Covid-19 slowed M&A activity, but there were still many large deals and IPOs last year.
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At the start of 2020, some experts predicted that M&A activity would be weaker than in 2019. Then, Covid-19 slowed M&A expectations even more. However, we saw plenty of massive deals and IPOs last year, and I expect that to continue as businesses and the economy alike enter the post-Covid recovery phase.
The cybersecurity market saw more than $6.3 billion invested throughout 2020 in the U.S alone with laser focus on growth and the consolidation of functionality. This May will mark one year since my company acquired Octarine to expand our expertise in container security and Kubernetes environments, and to say we’ve learned a lot is an understatement. I’ve previously highlighted challenges, learnings, and humbling moments that came with completing an M&A amid the pandemic, and now I’m taking a look back at the past year and offering some advice for other entrepreneurs in similar situations.
Trust your new team to make important decisions
While it was remarkable to complete an M&A remotely between my company in the U.S. and Octarine in Tel Aviv, it was even more of an accomplishment to onboard, align and work remotely so closely over the past year. Add in the pressure of an unfortunate industry standard that most M&As perform under expectations, and we had a tall order in front of us.
Building trust among the new and existing team members was absolutely critical to our success from the minute the deal was signed. As a business leader and someone who has been on the other side of an acquisition many times, I knew early on that I didn’t want to suffocate the new team. As Steve Jobs once said, “Don’t hire smart people and then tell them what to do.” This couldn’t have been more true when it came to combining our teams. I made sure that our new teammates had a voice and felt comfortable sharing their points of view.
Related: 7 Virtual Team-Building Ideas to Keep Your Staff Connected
Ensure alignment toward the joint vision and goal
The two Octarine co-founders that joined our team fundamentally understood that they were transitioning their company to be a part of something bigger. They were on board with a vision that was different than their initial one when founding Octarine. They knew that this acquisition allowed for accelerating the adoption of Octarine technology — putting Octarine tech in more customers’ hands, faster.
As a joint team, we agreed early on to fully transition the Octarine product into our existing security platform. This was painful at first. After all, the Octarine team had to go back and re-tool work they’d already poured their energy into. But by making that decision — and getting genuine and heartfelt alignment — we were able to complete the transition and get to market in six months, which is a remarkably short period and much faster than typical.
I’m the first to admit that, as a senior technical person, I’m opinionated and hate to lose. However, we agreed from the onset that we shared the same common goal of delivering great products to our customers and would agree on our path to achieving it. In the case of this M&A, we had a larger security strategy to strive toward, and Octarine filled one piece of that. In order to deliver on our aggressive product roadmap promises six months after the deal closed, we made sure that we kept the larger strategy at the forefront of our efforts the whole time.
Related: Six Ways to Manage Global Teams Remotely and Create a Culture of Trust, Productivity
Don’t be afraid to be decisive
In video meetings full of experienced and opinionated technical leaders, it’s no surprise that we unearthed conflicts. There were hard calls to make along the path to delivery. When there was an issue, we escalated it quickly and then we were decisive and made a call. Both teams had to agree because, in the end, we were one team.
I had a similar experience when my company, Carbon Black, was acquired for the first of two times in 2014. We were a small, very technical startup. We were acquired by a bigger player, which of course was exciting — we finally had paying customers! It’s because of this experience earlier in my career that I empathize with wanting to see something through. It’s critical as a leader of both the acquired and the acquiring company that you let strong teammates continue to have a voice, a clear path for growth, and to be challenged. But, at the end of the day as a leader, it’s your job to be decisive and make hard decisions.
As human beings, we don’t crave conflict. It’s not easy. To prepare for some of these expected growing pains after an acquisition, it’s critical that a leader is defined, and that the roles and responsibilities of the team are crystal clear. The only way to solve conflict is with a leader who isn’t afraid to make the final call and keep the team aligned. Another critical element here is to take any emotion or ego out of the situation. You can’t let someone needing recognition be the cause for a slow path to success. Lead by example and leave the ego at the door (or off of video meetings). In the end, winning solves everything, and in this case, it’s winning as one united team that matters most.
Related: Don't Even Think 'Merger' Without Taking These 5 Steps First
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June 08, 2021 at 07:00PM
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Trust, Alignment, Leadership: One CTO's Tips for a Smooth Transition During a Remote M&A - Entrepreneur
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