The importance of speed in M&A
Ripping the band-aid off when integrating companies
I listened today to Patrick O’Shaughnessy interview Brad Jacobs, who has built lots of huge businesses through acquiring other companies. It made me reflect on the experience I had helping to integrate the data team of a startup that the company I worked for had acquired. We did lots of things wrong in that process and the acquisition ended up being a waste of a lot of time and money.
Jacobs has lots of advice in this interview and the most important is to move fast to unify the target company's systems and processes with the acquirer’s. Get everything on one CRM tool, one accounting system, have shared metrics and goals and do it quickly. People will complain and it will be painful but it is much better than the alternative, where everything stays messy and confused for months.
Jacobs repeats several times during the interview: “things don’t get better with time” and this rings true to me — the faster problems are addressed the less they can fester and solidify. Jacobs emphasizes speed of action in every part of his business. Blackstone CEO Steve Schwarzman, another highly experienced dealmaker, has a similar catchphrase: “time kills all deals.”
Recently ousted OpenAI CEO Sam Altman also touts speed’s importance: “slowness anywhere justifies slowness everywhere…moving fast compounds so much more than people realize.”
Keeping the tempo set high and moving through problems quickly seems like a good default mode of operating.
Agree that generally there's good value to moving expeditiously. However, you may have a deal model that was used to underwrite the transaction. That model may assume certain synergies in cost or revenues. The achievement of the deal model expectations is what the board will use to judge success. If the CRM integration is in the deal model, fine, prioritize it. If it's not, focus first on the deal model items so you get your required synergies (and maintain the board's confidence for the NEXT deal).